BJ’s Wholesale Club Holdings, Inc. reported that second-quarter total revenues rose 4.9 percent year-over-year (y/y) to $5.51 billion, with net sales growing 4.8 percent y/y to $5.09 billion and Membership Fees increasing 9.1 percent to $113.1 million for the 13-week period ended August 3.

Total comparable club sales increased by 3.1 percent y/y in the second quarter. Excluding the impact of gas sales, comparable club sales increased by 2.4 percent in the second quarter compared to the fiscal 2023 Q2 period.

Gross profit increased to $956.6 million in Q2 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 ten basis points versus Q2 2023, said to be primarily driven by “improved inventory cost management.”

Selling, general, and administrative expenses (SG&A) increased to $750.3 million in the second quarter, compared to $695.0 million in the second quarter of fiscal 2023. The increase was said to be primarily driven by increased labor and occupancy costs resulting from new club and gas station openings, in addition to other investments to drive strategic priorities, such as the restructuring of certain corporate functions.

Income from continuing operations before income taxes increased to $190.9 million in the second quarter, compared to $184.0 million in the second quarter of fiscal 2023.

Income tax expense decreased to $45.9 million in Q2, compared to $52.7 million in the 2023 Q2 period. The decrease was said to be primarily driven by higher tax benefits from stock-based compensation.

Net income increased y/y to $145.0 million in the second quarter, compared to $131.3 million in the second quarter of fiscal 2023.

Adjusted EBITDA increased by 4.9 percent y/y to $281.3 million in Q2 2024, compared to $268.1 million in Q2 2023.

Under its existing share repurchase program, the company repurchased 451,982 shares of common stock, totaling $40.4 million, including associated costs, in the second quarter of fiscal 2024, and $118.7 million remained available to purchase.

Outlook
“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, EVP/CFO of BJ’s Wholesale Club. “With respect to our outlook, we continue to expect fiscal 2024 comparable club sales, excluding the impact of gasoline sales, to increase 1 percent to 2 percent 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.”

Image courtesy BJ’s Wholesale Club Holdings, Inc.