BJ’s Wholesale Club reports strong Q3

Strong third quarter earnings led by membership growth, traffic and margin improvement contributed to BJ’s Wholesale Club's strong third quarter results. 

In releasing its results on Friday, for the 13 weeks and 39 weeks ended Oct. 28, 2023, Bob Eddy, chairman and CEO of BJ's Wholesale Club said, "Our advantaged model and strong value proposition continue to resonate with our members. During the third quarter, we posted accelerating membership growth, robust traffic gains and continued increases in market share. These gains continue to reinforce the underlying strength of our business and we remain confident in the long-term growth prospects of our company. I am proud of our team members for their continued dedication to our members during these dynamic times.”

BJ’s total comparable club sales increased by .3% in the third quarter of fiscal 2023 compared to the prior year period. Excluding the impact of gasoline sales, comparable club sales remained approximately flat, with a decrease of .1% in the third quarter of fiscal 2023 compared to the same period in fiscal 2022. 

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Total comparable club sales decreased by 1.2% in the first nine months of fiscal 2023 compared to the prior year period. Excluding the impact of gasoline sales, comparable club sales increased by 2.1% in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022.

The big box retailer’s gross profit increased to $902.5 million in the quarter from $877.1 million in the prior year period. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 30 basis points over the same quarter of fiscal 2022. 

BJ’s gross profit increased to $2.7 billion million in the first nine months of fiscal 2023 from $2.5 billion in the first nine months of fiscal 2022. Merchandise gross margin rate increased by 70 basis points in the first nine months of fiscal 2023. Merchandise margins were positively impacted by moderated supply chain costs and improved inventory management for both comparative periods, the company said.

BJ’s income from continuing operations before income taxes increased to $181.4 million in the third quarter of fiscal 2023 compared to $179.5 million in the same period of fiscal 2022. Income from continuing operations before income taxes increased to $537.4 million in the first nine months of fiscal 2023 compared to $514.0 million in the prior year period.

The company’s net income increased to $130.5 million in the third quarter of fiscal 2023 compared to $129.9 million in the third quarter of fiscal 2022. Net income decreased to $377.9 million in the first nine months of fiscal 2023 compared to $383.4 million in the first nine months of fiscal 2022.

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

BJ’s also reported that digitally enabled comparable sales growth was 16% year-over-year.

BJ’s membership fee income increased by 6.6% year-over-year to $106.1 million.

The retailer reported earnings per diluted share of 97 cents and adjusted earnings per diluted share of 98 cents.

BJ’s adjusted EBITDA increased by 1% to $274.9 million in the third quarter of fiscal 2023 compared to $272.3 million in the prior year period. Adjusted EBITDA increased by 4.4% to $800.7 million in the first nine months of fiscal 2023 compared to $766.8 million in the first nine months of fiscal 2022.

“As we look ahead to the rest of the year, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value. We also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our sales outlook for the rest of the year,” said Laura Felice, executive vice president, chief financial officer of BJ's Wholesale Club. 

Felice continued, “We expect our comparable club sales, excluding the impact of gasoline sales, to range from a 2% decrease to 1% increase year-over-year in the fourth quarter fiscal 2023, and to increase by 1% to 1.8% year-over-year for the full year fiscal 2023. Our outlook on fiscal 2023 GAAP and adjusted EPS remains unchanged in the $3.80 to $3.92 range.”