Gains in member traffic drove BJ’s Wholesale Club's strong Q1 results, for the 13 weeks ended April 30, 2022.
The warehouse club retailer’s operating income increased to $150.3 million, or 3.3% of total revenues, in the first quarter of fiscal 2022 compared to $126.3 million, or 3.3% of total revenues, in the first quarter of fiscal 2021.
The warehouse club retailer also reported that membership fee income increased by 11.9% to $96.6 million year-over-year and digitally-enabled sales growth was 26%.
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Earnings per diluted share were $.82, which the company said reflects a 39% year-over-year increase. Adjusted earnings per diluted share of $.87 reflect a 20.8% year-over-year increase. Adjusted EBITDA increased 9.1% to $220.8 million in the first quarter of fiscal 2022 compared to $202.4 million in the same period of fiscal 2021, the company said.
“Our performance in the first quarter was strong, as gains in member traffic underscored the value we provide. Our business model remains more relevant than ever in the current inflationary environment,” said Bob Eddy, president and CEO, BJ’s Wholesale Club.
BJ’s total comparable club sales increased by 14.4% in the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021. Excluding the impact of gasoline sales, comparable club sales increased by 4.1% in the first quarter of fiscal 2022 compared to the first quarter of fiscal 2021.
“Our membership has never been stronger. We reached 6.5 million members in the first quarter, which serves as a testament to the value that we consistently deliver to our members. Our digital business remains a key competitive advantage. We’re quickly expanding our footprint and we recently closed the acquisition of our perishable distribution network, which will support our future growth efforts and drive long-term shareholder value,” Eddy said.
Gross profit increased to $790.6 million in the first quarter of fiscal 2022 from $726.7 million in the first quarter of fiscal 2021. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 30 basis points over the first quarter of fiscal 2021. Merchandise margins were impacted by increased freight costs and tactical investments in inflationary categories, the company said.
The company also reported its selling, general and administrative expenses increased to $635.4 million in the first quarter of fiscal 2022, compared to $599.9 million in the first quarter of fiscal 2021. The increase was primarily driven by increased labor costs as a result of last year’s wage investments, occupancy costs as a result of new club openings and acquisition and integration expenses related to the acquisition of assets from Burris Logistics, the company said.
Lastly, BJ's said that on May 2, 2022, it completed its acquisition of four distribution centers and related private transportation fleet from Burris Logistics, bringing its end-to-end perishable supply chain in-house.
“We are pleased with our performance in the first quarter and remain optimistic that the strength of our core business will continue to drive long-term growth,” said Laura Felice, executive vice president, chief financial officer of BJ's Wholesale. “Our fiscal year 2022 EPS outlook of flat year-over-year remains unchanged.”