BJ's Wholesale Club reports strong Q2, first half fiscal 2022 results, raises guidance
Gains in traffic and market share helped to deliver strong results for BJ's Wholesale Club for the second quarter and first half of fiscal 2022, as it reported results for the 13 weeks and 26 weeks ended July 30, 2022.
The warehouse club retailer said that its total comparable club sales increased by 19.8% in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021. Excluding the impact of gasoline sales, comparable club sales increased by 7.6% in the second quarter of fiscal 2022 compared to the second quarter of fiscal 2021. Total comparable club sales increased by 17.2% in the first half of fiscal 2022 compared to the first half of fiscal 2021. Excluding the impact of gasoline sales, comparable club sales increased by 5.9% in the first half of fiscal 2022 compared to the first half of fiscal 2021.
BJ's gross profit increased to $860 million in the second quarter of fiscal 2022 from $763.5 million in the second quarter of fiscal 2021. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 50 basis points over the second quarter of fiscal 2021. Merchandise margins were impacted by increased freight costs as well as investments in inflationary categories and markdowns in general merchandise inventory.
Gross profit increased to $1.6 million in the first half of fiscal 2022 from $1.5 million in the first half of fiscal 2021. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 40 basis points in the first half of fiscal 2022. Merchandise margins were impacted by increased freight costs as well as investments in inflationary categories, the company said.
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BJ’s operating income increased to $202.9 million, or 4% of total revenues, in the second quarter of fiscal 2022 compared to $163.8 million, or 3.9% of total revenues, in the second quarter of fiscal 2021. Operating income increased to $353.2 million, or 3.7% of total revenues, in the first half of fiscal 2022 compared to $290 million, or 3.6% of total revenues, in the first half of fiscal 2021.
BJ's also reported that its selling, general and administrative expenses increased to $651.2 million in the second quarter of fiscal 2022 compared to $598.1 million in the second quarter of fiscal 2021. SG&A increased to $1.3 billion in the first half of fiscal 2022 compared to $1.2 billion in the first half of fiscal 2021. The increase in both comparative periods was primarily driven by increased labor costs as a result of last year’s wage investments as well as the acquisition, integration and operating expenses related to the acquisition of assets from Burris Logistics.
“Our strong results in the second quarter were led by gains in traffic and market share as we continued to deliver tremendous value across virtually every aspect of our business,” said Bob Eddy, president and CEO of BJ’s Wholesale Club. “Our relentless focus on investing in our long-term initiatives has put us in a place to capitalize on current trends and deliver this strong performance. Our member base is growing in both quality and size. We are improving our merchandising to offer more value. We are growing our digital business, offering more convenience and optionality for our members. We are expanding our footprint into new and existing markets with success. Our business model is designed to work well in the current consumer environment where value is king and we believe we are well-positioned for growth by doing what we do best — delivering great value to our members.”
Adjusted EBITDA increased 24.3% to $273.7 million in the second quarter of fiscal 2022 compared to $220.1 million in the second quarter of fiscal 2021. Adjusted EBITDA increased 17% to $494.5 million in the first half of fiscal 2022 compared to $422.5 million in the first half of fiscal 2021.
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“Our outlook on the business is strong given the sustained strength in our grocery business and our gains in market share,” said Laura Felice, executive vice president, chief financial officer of BJ's Wholesale Club. “We expect fiscal year 2022 comparable club sales growth, excluding the impact of gasoline sales, to be in the 4%-5% range, up from our original guidance of low single digit. While we expect continued merchandise margin rate pressure, we also expect fiscal year 2022 EPS to be in the $3.50 to $3.60 range, up from our original guidance of approximately $3.25. We remain confident that the strength of our core business and our intense focus on delivering value will continue to drive long-term growth.”