BJ’s Wholesale Club achieved more double-digit net and comparable sales gains in the second quarter of fiscal 2022, driven in part by higher fuel prices and inflation compared to a year ago.
In the end, BJ’s also beat Wall Street’s consensus earnings-per-share estimate by more than a quarter and topped analysts’ high forecasts.
For the second quarter ended July 30, net sales climbed 22.4% to $5.01 billion, from $4.09 billion in the fiscal 2021 quarter, when revenue rose 5.6%, Westborough, Mass.-based BJ’s said Thursday. Dues revenue rose 11.3% to $98.8 million, giving the retailer total quarterly revenue of $5.1 billion, up 22.2%.
Comparable club sales jumped 19.8% year-on-year, but were up 7.6% excluding fuel, compared to an overall rise of 4% and a decline of 3.4% excluding gasoline in during the period of the previous year. BJ’s noted that scale model sales grew 21.2% over a two-year stack, with 20.8% growth excluding fuel.
The second quarter results build on a strong first quarter performance, which led to growth of 16.3% in net sales, 14.4% in model sales (4.1% excluding fuel) and 26 % of online sales.
“Our strong second quarter results were led by traffic and market share gains as we continue to deliver tremendous value in virtually every aspect of our business,” said BJ President and CEO. , Bob Eddy, in a press release.
Digital sales jumped 47% from a year ago, when the warehouse club chain posted big gains the previous year thanks to the pandemic. In the 2021 quarter, e-commerce sales had increased by 4%.
“Our consistent focus on investing in our long-term initiatives has allowed us to capitalize on current trends and deliver this strong performance. Our membership base is growing in quality and size. We are improving our merchandising to provide more value. We are growing our digital business, providing more convenience and options for our members. We are successfully expanding our footprint into new and existing markets,” Eddy explained.
BJ’s is also benefiting as consumers battle high prices for food, groceries and other essentials and seek retailers like warehouse clubs that offer more for their money, he noted. .
“Our business model is designed to work well in today’s value-driven consumer environment,” Eddy said, “and we believe we’re well positioned for growth by doing what we do best – delivering great value to our members.”
On the earnings side, net income was $141 million, or $1.03 per diluted share, compared with $111 million, or 80 cents per diluted share, a year ago. Adjusted net income was $144.3 million, or $1.06 per diluted share, compared to $113.3 million, or 82 cents per diluted share, in the 2021 quarter.
Analysts, on average, had forecast adjusted EPS of 80 cents, with estimates ranging from a low of 68 cents to a high of 96 cents, according to Refinitiv.
BJ’s said that during the second quarter, the company completed the acquisition of four perishable food distribution centers and their transportation fleets from longtime partner Burris Logistics, a deal announced in January. The transaction total was $375.6 million, including inventory.
The expansion remains on track for fiscal 2022, with 11 new club openings expected, BJ’s said. In mid-June, the company announced four upcoming clubs, including Indianapolis suburb Noblesville and New Albany, Ohio; Wayne, New Jersey; and Midlothian, Virginia. Most recently, BJ’s opened a new club with a gas station in Lady Lake, Fla. — its 229th location and 159th fuel center — on May 13. The latest stores will bring the company’s total number of clubs to 233.
“Our outlook for the business is strong, given the continued strength of our grocery business and our market share gains,” said Laura Felice, executive vice president and chief financial officer. “We expect FY2022 same-store club sales growth, excluding the impact of gasoline sales, to be between 4% and 5%, up from our initial low-single-digit guidance. While we expect continued pressure on commodity margin rates, we also expect FY2022 EPS to be between $3.50 and $3.60, up from our initial guidance of around $3.25. We remain confident that the strength of our core business and our intense focus on value creation will continue to drive long-term growth. »
Prior to Q2 results reported by BJ, Wall Street’s FY2022 adjusted EPS consensus estimate for the company was $3.33, with a range of $3.25 to $3.51, according to Refinitiv. .
BJ’s closed the second quarter with 229 warehouse clubs and 160 BJ’s gas stations in 17 states, up from 222 clubs and 151 gas stations a year earlier.
“Second quarter results demonstrate the strength of value in the current environment as Components (non-Fuel) of +7.6% and Adjusted EPS of $1.06 were well above consensus of +4.2 % and 80 cents,” Jefferies analyst Corey Tarlowe wrote in a research. note Thursday.
“BJ’s is a defensive name by nature, given that it sells a high mix of foods as a percentage of sales. Combining this with a membership model that generates predictable sales and earnings and an attractive value orientation, we believe BJ’s is well positioned for future equity gains,” explained Tarlowe. “In addition, the company has a long track record of unit growth in new and existing markets, as demonstrated by management’s target of 4% to 5% unit growth per year, and should benefit from continued margins thanks to increasing private label penetration (new target of 30% of sales vs. 25%).”