BJ’s Wholesale Club (BJ) - 2026 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported net sales of $5 billion, an increase of 4.7% year over year [27] - Merchandise comparable sales, excluding gas sales, increased by 3.9% year over year, driven by traffic and units [27] - First quarter earnings per share were $1.13, with adjusted earnings per share of $1.14 [30] Business Line Data and Key Metrics Changes - The perishables grocery and sundries division achieved over 4% comparable sales growth in the first quarter, with unit volumes increasing across all divisions [9] - The general merchandise and services division saw a slight decrease in comparable sales, although positive comps were reported in apparel and toys [10] - Digitally enabled comparable sales grew by 35% year over year, contributing significantly to overall sales growth [28] Market Data and Key Metrics Changes - Total comparable club sales, including gas sales, grew by 1.6% year over year, with first quarter comp gallons rising about 2% year over year [28] - The company gained market share in fuel, with positive gallon growth while the broader industry experienced volume declines [92] Company Strategy and Development Direction - The company is accelerating club openings, with plans to open 25 to 30 new clubs over the next two years [22] - Strategic priorities include improving member loyalty, enhancing the shopping experience, delivering value conveniently, and expanding the footprint [12] - The company is focused on delivering great value and maintaining competitive pricing, with an emphasis on enhancing digital conveniences [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the uncertain economic environment and emphasized the importance of delivering value to members [24] - The company is maintaining its initial full-year guidance of 2% to 3.5% comparable sales growth, excluding gas [34] - Management acknowledged the dynamic environment and the potential for wider ranges of outcomes in financial performance [33] Other Important Information - Membership fee income grew by 8.1% to approximately $120.4 million, benefiting from strong membership acquisition and retention [29] - The company ended the first quarter with inventory levels down 2% on a per club basis, indicating effective inventory management [31] Q&A Session Summary Question: Update on real estate strategy and club openings - Management highlighted the success of recent club openings and expressed excitement about the real estate pipeline, aiming to accelerate club openings in new and existing markets [41][46] Question: Long-term membership algorithm and customer engagement - Management confirmed that membership growth remains strong, with a focus on engaging and activating members to drive higher tier penetration [52][54] Question: Margin investments and comp sales expectations - Management indicated that margin investments are focused on delivering value, with expectations that first half comps will be stronger than the second half [60][61] Question: Impact of tariffs on guidance and pricing strategy - Management noted that the company imports less than competitors, which may mitigate tariff impacts, and emphasized a commitment to delivering value despite cost pressures [85][86] Question: Share gains in non-food categories and higher tier membership - Management reported continued share gains in both food and non-food categories, with a goal to increase higher tier membership penetration beyond 50% [92][99] Question: Digital convenience and its impact on margins - Management acknowledged that while digital sales may have slightly lower contribution margins, they are focused on growing member engagement and lifetime value through digital conveniences [106][108]