BJ’s Wholesale Club posts Q2, first half fiscal 2023 results

In reporting financial results for the 13 weeks and 26 weeks ended July 29, 2023, Bob Eddy, chairman and CEO of BJ's Wholesale Club noted that the company's strong performance in the second quarter reflected its continued gains in membership, traffic and market share, "driven by the great value that we provide our members every day.”

Eddy added, “We continue to balance gross margins with investments in value and in growing the size and quality of our membership with an eye toward the future. I’m proud of the team’s execution in the quarter and believe that we are well-positioned for continued growth.”

Among the company’s second quarter highlights:

• BJ’s comparable club sales, excluding gasoline sales, increased by 1.1% year-over-year;
• The company’s digitally enabled comparable sales growth was 15% year-over-year;
• BJ’s membership fee income increased by 5% year-over-year to $103.7 million;
• The company’s merchandise gross margin rate increased by 90 basis points year-over-year;
• BJ’s earnings per diluted share and adjusted earnings per diluted share was 97 cents;
• Income from continuing operations was $131.3 million; and
• The company’s adjusted EBITDA was $268.8 million.

BJ’s also reported that its total comparable club sales decreased by 5.3% in the second quarter of fiscal 2023 compared to the same period in the prior year. Excluding the impact of gasoline sales, comparable club sales increased by 1.1% in the second quarter of fiscal 2023 compared to the same period in fiscal 2022.

Total comparable club sales decreased by 1.9% in the first half of fiscal 2023 compared to the first half of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales increased by 3.3% in the first half of fiscal 2023 compared to the first half of fiscal 2022.

[Read more: BJ’s Wholesale Club sets opening date for latest New York club]

BJs reported that its gross profit increased to $896.8 million in the second quarter of fiscal 2023 from $860 million in the second quarter of fiscal 2022. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 90 basis points over the same quarter of fiscal 2022.

The company's gross profit increased to $1.8 billion in the first half of fiscal 2023 from $1.7 billion in the first half of fiscal 2022. Merchandise gross margin rate increased by 100 basis points in the first half of fiscal 2023. Merchandise margins were positively impacted by disinflation, moderated supply chain costs and improved inventory management for both comparative periods, the company said.

The company’s net income decreased to $131.3 million in the second quarter of fiscal 2023 compared to $141 million in the second quarter of fiscal 2022. Net income decreased to $247.4 million in the first half of fiscal 2023 compared to $253.5 million in the first half of fiscal 2022.

BJ’s adjusted EBITDA decreased by 1.8% to $268.8 million in the second quarter of fiscal 2023 compared to $273.7 million in the second quarter of fiscal 2022. Adjusted EBITDA increased by 6.3% to $525.7 million in the first half of fiscal 2023 compared to $494.5 million in the first half of fiscal 2022.

[Read more: BJ's Wholesale Club reports strong Q2, first half fiscal 2022 results, raises guidance]

“As we look ahead, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value. However, we also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our outlook for the rest of the fiscal year,” said Laura Felice, executive vice president, chief financial officer at BJ's Wholesale Club. “For fiscal 2023, we expect our comparable club sales, excluding the impact of gasoline sales, to increase approximately 2% year-over-year. We expect our fiscal 2023 membership fee income to increase approximately 5% year-over-year and merchandise gross margins to improve by approximately 50 basis points year-over-year. Finally, we expect fiscal 2023 GAAP and adjusted EPS to be in the $3.80 to $3.92 range.”