BJ’s Wholesale Club reports strong Q2, fiscal year results
Traffic growth, healthy membership and strong digital growth contributed to a strong second quarter for BJ's Wholesale Club.
In reporting financial results for the 13 weeks and 26 weeks ended Aug. 3, 2024, the company reported digitally enabled comparable sales growth was 22% year-over-year. The retailer's membership fee income increased by 9.1% year-over-year to $113.1 million. BJ's also reported earnings per diluted share of $1.08 and adjusted earnings per diluted share of $1.09.
“Our second quarter was marked by robust membership, accelerating traffic and unit growth, and a fast-tracking digital business, which led to strong performance in the quarter. This was our tenth consecutive quarter of traffic growth. We are driving healthy membership expansion across both existing and new clubs. Our compelling value proposition is resonating with our members and we believe our results demonstrate the meaningful progress we are making on our long term strategic initiatives,” said Bob Eddy, chairman and CEO of BJ’s Wholesale Club.
Eddy added, “I am proud of our team members for their continued dedication to our purpose of ‘taking care of the families who depend on us’. We will continue to invest in the long term success of our Company and we remain excited about our future.”
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The big box retailer's total comparable club sales increased by 3.1% and 2.4% in the second quarter and first six months of fiscal 2024, respectively, compared to the same periods in fiscal 2023. Excluding the impact of gasoline sales, comparable club sales increased by 2.4% and 1.5% in the second quarter and first six months of fiscal 2024, respectively, compared to the same periods in fiscal 2023.
The company's gross profit increased to $956.6 million in the second quarter of fiscal 2024 from $896.8 million in the second quarter of fiscal 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 10 basis points over the same quarter of fiscal 2023, primarily driven by improved inventory cost management. Gross profit increased to $1.84 billion in the first six months of fiscal 2024 from $1.78 billion in the first six months of fiscal 2023. Merchandise gross margin rate decreased by 20 basis points in the first six months of fiscal 2024, primarily driven by lower ancillary income.
BJ's net income increased to $145 million in the second quarter of fiscal 2024 compared to $131.3 million in the second quarter of fiscal 2023. Net income increased to $256 million in the first six months of fiscal 2024 compared to $247.4 million in the first six months of fiscal 2023.
The retailer's adjusted EBITDA increased by 4.9% to $281.3 million in the second quarter of fiscal 2024 compared to $268.1 million in the second quarter of fiscal 2023. Adjusted EBITDA decreased by 0.4% to $517.7 million in the first six months of fiscal 2024 compared to $519.6 million in the first six months of fiscal 2023.
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"As we look ahead, we remain confident in our ability to drive long-term growth and shareholder value led by our continued focus on executing our strategic priorities and delivering significant value to our members,” said Laura Felice, executive vice president, chief financial officer at BJ's Wholesale Club.
Felice continued, “With respect to our outlook, we continue to expect fiscal 2024 comparable club sales, excluding the impact of gasoline sales, to increase 1% to 2% year-over-year, with traffic and unit growth as well as a strong perishables business likely driving us to the higher end of the range. Our business model and long-term strategies have allowed us to invest in our value proposition to help our members stretch their dollar. As we do what’s right for our members, we expect our fiscal 2024 merchandise gross margins to remain approximately flat year-over-year. Finally, we continue to expect our fiscal 2024 adjusted EPS to range from $3.75 to $4.00, with our investments for the long term potentially driving us toward the low end of the range.”