Company Performance - BJ's Wholesale Club reported quarterly earnings of $1.14 per share, exceeding the Zacks Consensus Estimate of $1.1 per share, and showing an increase from $1.09 per share a year ago, resulting in an earnings surprise of +3.64% [1] - The company posted revenues of $5.38 billion for the quarter ended July 2025, which was 1.51% below the Zacks Consensus Estimate, but an increase from $5.21 billion year-over-year [2] - Over the last four quarters, BJ's has surpassed consensus EPS estimates four times, but has not beaten consensus revenue estimates during the same period [2] Stock Performance - BJ's shares have increased approximately 18.8% since the beginning of the year, outperforming the S&P 500's gain of 8.3% [3] - The current consensus EPS estimate for the upcoming quarter is $1.11 on revenues of $5.4 billion, and for the current fiscal year, it is $4.29 on revenues of $21.61 billion [7] Industry Outlook - The Consumer Products - Staples industry, to which BJ's belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - The performance of BJ's stock may be influenced by the overall outlook for the industry, as research indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - BJ's Wholesale Club reported net sales of $5.3 billion in Q2 FY25, a 3.2% increase compared to Q2 FY24 [7] - Comparable club sales, excluding gasoline impact, increased by 2.3% compared to Q2 FY24 [7] - Adjusted EPS reached $1.14 in Q2 FY25, a 4.6% increase compared to Q2 FY24 [7] - Adjusted EBITDA was $303.9 million in Q2 FY25, an 8.0% increase compared to Q2 FY24 [7] - Adjusted free cash flow was $87.3 million [7] - The company returned $167.7 million to shareholders via share repurchases in the last twelve months (LTM Q2 FY25) [7] Membership and Digital Growth - The company has 8 million members [7] - Membership Fee Income (MFI) increased by 9.0% to $123.3 million compared to Q2 FY24 [7] - The tenured renewal rate is 90% [7] - Digitally-enabled comparable sales growth was +34% [7]

[Q2 2025 Financial Performance Overview](index=1&type=section&id=Q2%202025%20Financial%20Performance%20Overview) BJ's Wholesale Club delivered strong Q2 FY2025 financial performance, marked by revenue and profit growth, a record 8 million members, and robust digital sales [Key Financial Results](index=1&type=section&id=Key%20Financial%20Results) BJ's Wholesale Club reported strong Q2 FY2025 financial results, achieving growth in revenues, operating income, and EPS, with a record 8 million members and robust digitally enabled sales Q2 & YTD Fiscal 2025 Key Financial Metrics (vs. Prior Year, in millions) | Metric | Q2 2025 | Q2 2024 | % Growth | YTD 2025 | YTD 2024 | % Growth | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $5,380.2 million | $5,205.4 million | 3.4% | $10,533.7 million | $10,123.9 million | 4.0% | | **Operating Income** | $216.5 million | $203.7 million | 6.3% | $420.2 million | $364.4 million | 15.3% | | **Net Income** | $150.7 million | $145.0 million | 3.9% | $300.5 million | $256.0 million | 17.4% | | **Diluted EPS** | $1.14 | $1.08 | 5.6% | $2.27 | $1.91 | 18.8% | | **Adjusted EPS** | $1.14 | $1.09 | 4.6% | $2.28 | $1.94 | 17.5% | | **Adjusted EBITDA** | $303.9 million | $281.3 million | 8.0% | $589.7 million | $517.7 million | 13.9% | - The company reached a significant milestone, growing its member count to a record **8 million members**[1](index=1&type=chunk)[6](index=6&type=chunk) - Comparable club sales decreased by **0.3%** year-over-year, primarily due to declining retail fuel prices[6](index=6&type=chunk)[7](index=7&type=chunk) - Excluding gasoline sales, comparable club sales increased by **2.3%** year-over-year, led by traffic growth[6](index=6&type=chunk)[7](index=7&type=chunk) - Digitally enabled comparable sales demonstrated strong performance with **34% growth**, contributing to a two-year stacked comparable growth of **56%**[6](index=6&type=chunk) [Detailed Financial Analysis](index=2&type=section&id=Detailed%20Financial%20Analysis) A detailed analysis reveals Q2 comparable sales growth excluding gasoline, strong membership fee income, improved profitability despite higher SG&A, and continued capital returns through share repurchases [Revenue and Membership Analysis](index=2&type=section&id=Revenue%20and%20Membership%20Analysis) Q2 saw a 2.3% comparable club sales growth excluding gasoline, with membership fee income rising 9.0% due to strong acquisition and retention Comparable Club Sales Growth (YoY) | Period | Total Comp Sales | Comp Sales (Ex-Gasoline) | | :--- | :--- | :--- | | **Q2 Fiscal 2025** | -0.3% | +2.3% | | **YTD Fiscal 2025** | +0.6% | +3.1% | Membership Fee Income (MFI, in millions) | Period | MFI | % Growth (YoY) | | :--- | :--- | :--- | | **Q2 Fiscal 2025** | $123.3 million | 9.0% | | **YTD Fiscal 2025** | $243.7 million | 8.6% | - The increase in membership fee income was primarily driven by strength in membership acquisition, retention, higher tier membership penetration, and the annual membership fee increase effective January 2025[7](index=7&type=chunk) [Profitability and Expense Analysis](index=2&type=section&id=Profitability%20and%20Expense%20Analysis) Q2 profitability improved with gross margin expansion, despite higher SG&A from new club openings, leading to increased operating and net income - Gross profit increased to **$1.01 billion** in Q2 2025 from $956.6 million in Q2 2024[7](index=7&type=chunk) - Merchandise gross margin rate (excluding gasoline and MFI) increased by **10 basis points** year-over-year[7](index=7&type=chunk) - SG&A expenses increased primarily due to higher labor and occupancy costs resulting from new club and gas station openings, as well as increased depreciation from a larger number of owned clubs[7](index=7&type=chunk) Q2 2025 Profitability Growth (YoY, in millions) | Metric | Q2 2025 | % Growth | | :--- | :--- | :--- | | **Operating Income** | $216.5 million | 6.3% | | **Net Income** | $150.7 million | 3.9% | | **Adjusted EBITDA** | $303.9 million | 8.0% | [Capital Management](index=2&type=section&id=Capital%20Management) The company repurchased 375,000 shares for $41.2 million in Q2, with $952.6 million remaining under its share repurchase authorization - **Q2 2025:** Repurchased **375,000 shares** for **$41.2 million**[7](index=7&type=chunk) - **YTD 2025:** Repurchased **430,000 shares** for **$47.4 million**[7](index=7&type=chunk) - **Remaining Authorization:** **$952.6 million** available for future repurchases[7](index=7&type=chunk) [Fiscal 2025 Outlook](index=3&type=section&id=Fiscal%202025%20Outlook) BJ's Wholesale Club updated its FY2025 guidance, raising adjusted EPS expectations while maintaining its comparable club sales and capital expenditure outlook [Updated Full-Year Guidance](index=3&type=section&id=Updated%20Full-Year%20Guidance) BJ's Wholesale Club narrowed and raised its FY2025 adjusted EPS guidance to $4.20-$4.35, maintaining comparable club sales outlook and capital expenditure plans Updated Fiscal 2025 Outlook (Ending Jan 31, 2026) | Metric | Guidance | | :--- | :--- | | **Comparable Club Sales (ex-gasoline)** | 2.0% to 3.5% increase YoY | | **Adjusted EPS** | $4.20 to $4.35 | | **Capital Expenditures** | Approx. $800 million | - CFO Laura Felice stated, "We are pleased with the performance of business year to date and are confident in the outlook for the back half. We continue to see a top line range aligned with our previous outlook, but we are narrowing and increasing our range on the bottom line"[8](index=8&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present Q2 2025 operational results, balance sheet position, and cash flow activities, highlighting revenue growth, asset expansion, and increased operating cash [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 operations show total revenues of $5.38 billion, operating income of $216.5 million, and net income of $150.7 million, or $1.14 diluted EPS Condensed Consolidated Statements of Operations (Unaudited, in thousands) | | Thirteen Weeks Ended Aug 2, 2025 | Thirteen Weeks Ended Aug 3, 2024 | | :--- | :--- | :--- | | **Total revenues** | **$5,380,240** | **$5,205,395** | | Cost of sales | $4,374,065 | $4,248,819 | | SG&A | $786,358 | $750,323 | | **Operating income** | **$216,530** | **$203,675** | | Interest expense, net | $10,393 | $12,755 | | Income before income taxes | $206,137 | $190,920 | | **Net income** | **$150,705** | **$144,988** | | **Diluted EPS** | **$1.14** | **$1.08** | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of August 2, 2025, total assets reached $7.23 billion, with stockholders' equity increasing to $2.10 billion and total liabilities slightly decreasing Condensed Consolidated Balance Sheet Highlights (Unaudited, in thousands) | | August 2, 2025 | August 3, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,928,958 | $1,915,093 | | Property and equipment, net | $2,068,193 | $1,697,139 | | **Total assets** | **$7,231,772** | **$6,929,902** | | **Total current liabilities** | $2,434,236 | $2,523,750 | | Long-term debt | $398,953 | $398,586 | | **Total liabilities** | $5,132,678 | $5,274,995 | | **Stockholders' equity** | **$2,099,094** | **$1,654,907** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) YTD FY2025 cash flows show increased operating cash to $458.0 million, higher investing outflows, and $47.3 million in cash and cash equivalents Condensed Consolidated Statements of Cash Flows Highlights (Unaudited, in thousands) | | Twenty-six Weeks Ended Aug 2, 2025 | Twenty-six Weeks Ended Aug 3, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$457,957** | **$422,198** | | Net cash used in investing activities | ($306,156) | ($239,620) | | Net cash used in financing activities | ($132,800) | ($180,569) | | **Net increase in cash** | $19,001 | $2,009 | | **Cash and cash equivalents at end of period** | **$47,273** | **$38,058** | [Non-GAAP Financial Measures and Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's non-GAAP financial measures and provides detailed reconciliations from GAAP figures, including adjusted net income, EBITDA, and net debt metrics [Explanation of Non-GAAP Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures like adjusted net income and EBITDA are used to provide consistent operating performance comparisons and aid management decisions - The company presents non-GAAP measures like adjusted net income, adjusted EPS, and adjusted EBITDA to assist investors in comparing core operating performance across reporting periods by excluding non-recurring or unusual items[24](index=24&type=chunk)[29](index=29&type=chunk) - Management uses these non-GAAP measures to supplement GAAP performance in evaluating business strategies, making budget decisions, and establishing incentive compensation[30](index=30&type=chunk) [GAAP to Non-GAAP Reconciliations](index=10&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) Detailed reconciliations show Q2 2025 adjusted net income of $151.5 million and adjusted EBITDA of $303.9 million, with a net debt to LTM adjusted EBITDA ratio of 0.4x Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in thousands) | | Amount | | :--- | :--- | | **Net income as reported** | **$150,705** | | Restructuring | $1,043 | | Tax impact of adjustments | ($292) | | **Adjusted net income** | **$151,456** | Q2 2025 Reconciliation to Adjusted EBITDA (in thousands) | | Amount | | :--- | :--- | | **Net income** | **$150,705** | | Interest expense, net | $10,393 | | Provision for income taxes | $55,432 | | Depreciation and amortization | $71,933 | | Stock-based compensation expense | $13,945 | | Restructuring & Other adjustments | $1,453 | | **Adjusted EBITDA** | **$303,861** | Net Debt to LTM Adjusted EBITDA (as of Aug 2, 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Total debt | $503,953 | | Less: Cash and cash equivalents | ($47,273) | | **Net debt** | **$456,680** | | LTM Adjusted EBITDA | $1,162,557 | | **Net debt to LTM adjusted EBITDA** | **0.4x** |

Group 1 - BJ's Wholesale Club is set to release its second-quarter earnings results on August 22, with analysts expecting earnings of $1.09 per share, unchanged from the previous year [1] - The company is projected to report quarterly revenue of $5.48 billion, an increase from $5.21 billion in the same quarter last year, reflecting a year-over-year growth [1] - In the previous quarter, BJ's reported adjusted earnings per share of $1.14, exceeding the analyst consensus estimate of $0.92, while quarterly revenues of $5.15 billion represented a 4.7% year-over-year increase but fell short of the expected $5.20 billion [2] Group 2 - Citigroup analyst Atif Malik maintained a Sell rating on BJ's stock, raising the price target from $63 to $66 [9] - Susquehanna analyst Christopher Rolland maintained a Neutral rating and increased the price target from $60 to $75 [9] - UBS analyst Timothy Arcuri also maintained a Neutral rating, raising the price target from $65 to $75 [9] - Mizuho analyst Vijay Rakesh maintained a Neutral rating and raised the price target from $72 to $75 [9] - Barclays analyst Tom O'Mailey maintained an Underweight rating, increasing the price target from $45 to $52 [9]

Group 1 - BJ's Wholesale Club Holdings is set to announce its fiscal second-quarter results on August 22, 2025, with analysts projecting earnings of $1.09 per share and revenue of $5.48 billion, indicating no change in earnings year-over-year and a 5% increase in sales compared to the previous year [1][2] - The company has reiterated its fiscal 2025 guidance, emphasizing membership, traffic, and digital momentum as key growth drivers, alongside a 25% price advantage over supermarkets and plans to open 25-30 new clubs in the next two years [2] - BJ's has reported a market capitalization of $14 billion, with revenue for the last twelve months at $21 billion, operating profits of $848 million, and net income of $573 million [2] Group 2 - Historical data shows that BJ's stock has increased after earnings announcements 55% of the time, with a median one-day gain of 7.2% and a maximum increase of 20% [1][5] - Over the last five years, there have been 20 recorded earnings data points, with 11 positive and 9 negative one-day returns, while the percentage of positive returns drops to 45% when considering the last three years [5] - The correlation between short-term and medium-term returns after earnings can provide a lower-risk trading strategy, particularly if the 1D post-earnings return is positive [6]

Core Viewpoint - BJ's Wholesale Club is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The earnings report is expected on August 22, with a consensus EPS estimate of $1.10, reflecting a +0.9% change year-over-year. Revenues are projected to be $5.46 billion, up 4.9% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating that analysts have not significantly altered their initial projections during this period [4]. Earnings Surprise Prediction - The Most Accurate Estimate for BJ's is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +3.45%, suggesting a bullish outlook from analysts [12]. Historical Performance - In the last reported quarter, BJ's exceeded the expected earnings of $0.91 per share by delivering $1.14, achieving a surprise of +25.27%. The company has beaten consensus EPS estimates in all of the last four quarters [13][14]. Investment Considerations - While BJ's is seen as a strong candidate for an earnings beat, investors are advised to consider other factors that may influence stock performance beyond just earnings results [15][17].

Market Overview - Recent market pullback due to new tariffs and a slowdown in job growth has shaken investor confidence, with July nonfarm payrolls rising by only 73,000, significantly below expectations [1] - June's job numbers were revised downward, indicating a weaker labor market than previously thought [1] - Renewed trade tensions have fueled expectations of a Federal Reserve rate cut and increased risk aversion, leading to sharp declines in major indices [1] Importance of Financial Health - Investors should not rely solely on stock price movements; understanding a company's fundamentals is crucial for informed decision-making in an unpredictable market [2] - Sales and earnings metrics can be misleading; the interest coverage ratio is a key indicator of a company's ability to meet financial obligations [3][4] Interest Coverage Ratio - The interest coverage ratio measures how effectively a company can pay interest on its debt, calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A higher interest coverage ratio indicates a greater ability to meet financial commitments, while a ratio below 1 suggests potential default risks [6][7] - Companies with strong interest coverage ratios include The Walt Disney Company, BJ's Wholesale Club, Ralph Lauren, and McKesson Corporation, all of which demonstrate solid debt-servicing capabilities [9][11] Investment Strategy - A favorable investment strategy includes selecting stocks with an interest coverage ratio above the industry average, a Zacks Rank of 1 or 2, and a VGM Score of A or B [8][10] - The selected companies have shown strong earnings surprises and are projected to grow sales and earnings in the coming year [9][11] Company Performance Highlights - **Walt Disney Company**: Zacks Rank 2, VGM Score B, with a trailing four-quarter earnings surprise of 16.4% and projected sales and EPS growth of 4% and 16.3% respectively [12] - **BJ's Wholesale Club**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 17.7%, with projected sales and EPS growth of 5.5% and 6.2% respectively [13] - **Ralph Lauren**: Zacks Rank 2, VGM Score B, trailing four-quarter earnings surprise of 9%, with projected sales and EPS growth of 3.8% and 11.8% respectively [14] - **McKesson Corporation**: Zacks Rank 2, VGM Score A, trailing four-quarter earnings surprise of 3.9%, with projected sales and EPS growth of 13.1% and 12.7% respectively [15]

Group 1 - BJ's Wholesale Club is one of 178 companies in the Consumer Staples group, which is currently ranked 12 within the Zacks Sector Rank [2] - BJ's Wholesale Club has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook as the consensus estimate for its full-year earnings has increased by 1.6% over the past 90 days [3] - BJ's Wholesale Club has returned approximately 18.5% year-to-date, significantly outperforming the Consumer Staples sector average return of 1.9% [4] Group 2 - BJ's Wholesale Club belongs to the Consumer Products - Staples industry, which includes 35 stocks and is currently ranked 98 in the Zacks Industry Rank, with an average loss of 6.6% this year [5] - Coca-Cola HBC, another outperforming stock in the Consumer Staples sector, has returned 53% year-to-date and has a Zacks Rank of 1 (Strong Buy) [4][5] - The Beverages - Soft drinks industry, to which Coca-Cola HBC belongs, is ranked 36 and has seen a positive movement of +2.6% this year [6]

Company Performance - BJ's Wholesale Club has returned 18% year-to-date, outperforming the Consumer Staples sector, which has returned an average of 3.7% [4] - The Zacks Consensus Estimate for BJ's full-year earnings has increased by 1.6% over the past quarter, indicating improving analyst sentiment [4] - BJ's Wholesale Club holds a Zacks Rank of 2 (Buy), suggesting a favorable outlook for the stock [3] Industry Context - BJ's Wholesale Club is part of the Consumer Products - Staples industry, which consists of 35 companies and currently ranks 72 in the Zacks Industry Rank [6] - The average performance of the Consumer Products - Staples industry has been a loss of 5.4% year-to-date, highlighting BJ's superior performance [6] - Another notable stock in the Consumer Staples sector is Coca-Cola HBC, which has returned 55.5% year-to-date and has a Zacks Rank of 1 (Strong Buy) [5]

Core Viewpoint - BJ's Wholesale Club (BJ) is currently positioned as a more attractive investment option compared to Hermes International SA - Unsponsored ADR (HESAY) based on various valuation metrics and earnings estimate revisions [3][7]. Valuation Metrics - BJ has a forward P/E ratio of 24.99, while HESAY has a significantly higher forward P/E of 56.63 [5]. - The PEG ratio for BJ is 2.97, indicating a more favorable earnings growth outlook compared to HESAY's PEG ratio of 7.52 [5]. - BJ's P/B ratio stands at 7.2, which is lower than HESAY's P/B ratio of 15.87, suggesting that BJ is more undervalued relative to its book value [6]. Earnings Estimates - BJ has a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions, while HESAY holds a Zacks Rank of 3 (Hold) [3]. - The stronger estimate revision activity for BJ suggests an improving earnings outlook compared to HESAY [7]. Value Grades - BJ has been assigned a Value grade of B, reflecting its attractive valuation metrics, whereas HESAY has received a Value grade of F [6].