BJ

BJ’s posted results in Q2 that surpassed Wall Street expectations, with revenue and non-GAAP profit both coming in ahead of consensus. Management attributed this momentum to continued membership growth, robust traffic trends, and particularly strong performance in fuel sales. CEO Robert Eddy emphasized that both core retail and gas operations contributed meaningfully, highlighting the company’s ability to deliver value to members even in a cautious consumer environment. Management pointed to outperformance across income cohorts and noted their value proposition is resonating, especially with higher-income members. Eddy stated, “Our value proposition continued to resonate, and I want to thank our teams for their commitment to executing at a high level across our company.” Is now the time to buy BJ? Find out in our full research report (it’s free). Revenue: $6.23 billion vs analyst estimates of $5.95 billion (15.7% year-on-year growth, 4.7% beat) Adjusted EPS: $1.36 vs analyst estimates of $1.17 (16.5% beat) Adjusted EBITDA: $331.2 million vs analyst estimates of $314.7 million (5.3% margin, 5.2% beat) Management raised its full-year Adjusted EPS guidance to $4.70 at the midpoint, a 4.4% increase Operating Margin: 4.1%, in line with the same quarter last year Locations: 267 at quarter end, up from 255 in the same quarter last year Same-Store Sales rose 11.9% year on year (-0.3% in the same quarter last year) Market Capitalization: $11.43 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Edward Kelly (Wells Fargo) asked about the sustainability and return of recent price investments. CEO Robert Eddy responded that investments are aimed at long-term member value, not just short-term returns, and will continue as funding sources evolve. Peter Benedict (Baird) questioned what is driving continued strength in membership fee income. Eddy credited new club openings, higher-tier upgrades, and high renewal rates, noting 43% of members are now in higher tiers. Katharine McShane (Goldman Sachs) probed the sustainability of price investments as tariff refunds decline. Eddy replied that future investments will be backed by supplier savings and other initiatives, not just tariffs. Michael Baker (D.A. Davidson) asked about growth prospects and competitive dynamics in Texas. EVP Bill Werner explained that outsized membership gains, strong gas engagement, and consistent early performance are encouraging, with more openings planned in the region. Gabriella Garr (TD Cowen) inquired about digital sales’ impact on member spending and retention. Eddy detailed that digitally engaged members spend more, visit more often, and renew at higher rates, reinforcing the company’s focus on digital convenience. Looking ahead, our team will be watching (1) the pace and profitability of new club openings, especially in Texas and other new markets; (2) the sustainability of membership fee income growth as the impact of last year’s fee increase fades; and (3) the effectiveness of assortment and digital engagement initiatives in driving higher spend and retention. Progress in sourcing new funding for price investments without margin erosion will also be a key marker for execution. BJ's currently trades at $90.77, in line with $91.30 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively. Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Friday, Aug. 21, 2026 at 8:00 a.m. ET VP of Investor Relations - Diana Rashkow Chairman and Chief Executive Officer - Bob Eddy Chief Financial Officer - Laura Felice Executive Vice President, Strategy and Development - Bill Werner Operator: Hello, everyone. Thank you for joining us, and welcome to BJ's Wholesale Club's Quarter 2 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Diana Rashkow, VP of Investor Relations. Diana, please go ahead. Diana Rashkow: Good morning, and welcome to BJ's Second Quarter Fiscal 2026 Earnings Call. Joining me today are Bob Eddy, Chairman and Chief Executive Officer; Laura Felice, Chief Financial Officer; and Bill Werner, Executive Vice President, Strategy and Development. Please remember that we may make forward-looking statements on this call that are based on our current expectations. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from what we say on this call. Please see the Risk Factors section of our most recent SEC filings for a description of these risks and uncertainties. Please also refer to today's press release and latest investor presentation posted on our Investor Relations website for our cautionary statement regarding forward-looking statements and non-GAAP reconciliations. And now I'll turn the call over to Bob. Robert Eddy: Good morning, everyone. Thank you for joining us today. I'm very pleased to share that we delivered a strong second quarter, one that came in ahead of our expectations and reflects the continued momentum in our business. Net sales were up nearly 16% year-over-year and merchandise comps grew 3.1% with traffic accelerating during the quarter. This marks our 18th consecutive quarter of traffic growth and our 15th consecutive quarter of market share gains. On a 2-year stack basis, merchandise comps were 5.4%, in line with where we were last quarter, which speaks to the durability of our momentum. The comp was driven by a healthy balance of traffic and ticket, and we delivered for our members when it mattered most, including during events like the World Cup and America250. Simply put, our value proposition continued to resonate, and I want to thank our teams for their commitment to executing at a high level across our company. Our perishables, grocery and sundries division delivered solid comp growth of 2.8% in the quarter, led by grocery. We saw particular strength in beverages and Active Nutrition, where assortment updates through our category management process have been resonating well with members, and we're pleased with the momentum we're building in this part of the business. Our General Merchandise and Services division sustained comp growth of 5.3% in the quarter, and I'm pleased with the breadth of performance across the division. Consumer electronics continued to lead the way and Home was a strong contributor. The results reflect the work our teams have been doing to put the right products at the right value in front of our members. Gas prices remained elevated during the quarter, and our members continue to seek us out for the value we offer at the pump. Comp gallons were up double digits, accelerating from the strong results we saw in Q1 and a clear signal of the share we continue to take. Gas prices are about as visible as it gets for consumers. There's a price on every street corner, and our members know that we offer great value. Strong volume growth, combined with favorable pullback from peak gas prices drove fuel profit dollars ahead of plan, which was a meaningful contributor to our overall results. Taking a step back to assess the consumer environment, the K-shaped economy persists, though we did see some sequential improvement during the quarter. We drove comp growth across all income cohorts, which is encouraging, and our value proposition continues to resonate broadly. That said, the vast majority of our growth continues to be driven by our higher income members, which is consistent with what we've seen for some time now. In an environment where consumers remain discerning with their dollars, we know our job is to make sure we're putting the right products at the right value in front of every member who walks through our doors. All told, it was a strong quarter across the board. Sales, membership, margin dollars and the bottom line all came in ahead of our expectations. Adjusted EPS was $1.36, up 19% year-over-year. And to put that in perspective, we earned more in this single quarter than we did in the entire year we went public back in 2018. That's a remarkable statement about how far this business has come. With that as a backdrop, let me turn to the progress we're making on our strategic priorities. Let me start where I always do with membership, which remains the foundation of everything we do. We reached a new milestone of 8.5 million members this quarter, and that's worth pausing on. Over the last 25 years, we've grown our membership fee income at an 8% CAGR. Since our IPO, we've added more than 3 million members. And in just the past 2 years, we've added over 1 million members. That kind of compounding growth is earned by consistently delivering the value and convenience our members expect from us. The current quarter was no exception. Membership fee income grew nearly 10% year-over-year. And what matters most to us isn't just the number, it's the quality of the membership base we're building. One of the best measures of that quality is MFI per member, which has grown consistently year-over-year, reflecting the strength of our acquisition, retention and higher tier penetration across both new and existing clubs. On experience, our price gaps continue to improve and the market dynamics are working in our favor. Traditional grocers have been raising prices, creating an even more favorable backdrop for our value proposition. We continue to gain share as our price gaps improve, unit share has become an even clearer signal of member preference. Based on industry data in the markets where we operate, the rest of the market saw unit sales decline while we saw unit gains with units growing more than 300 basis points faster than the market in the quarter. And that's not just a Q2 story. We've outpaced the market on units over the past year as well. That's an important distinction. Our model is built to grow both sales and units by delivering value, and that's exactly what we're doing. Delivering great value isn't just about price, though. It's about making sure that we have the right products on the shelf at the right price. Part of delivering great value is knowing when to lean into a moment, and our merchants did just that this quarter. America turned 250 this year, and our team found a great way to celebrate with our members. We brought in truckloads of watermelons at $3.99, while many other retailers were charging $5.99 and about one in five of our members had one in their basket during this promotion. It's a simple example of what we do well, finding the right product at the right price and delivering real value to our members. We're building that capability systematically across our entire assortment through our category management process. CMP is about going deep on what our members want from us, category by category, making sure we have the right assortment at the right cost. And we're already seeing it show up in our results. The strength we saw in beverages and Active Nutrition this quarter is a direct reflection of that work. And in Home, we've seen strong member response to renovated assortments across several categories, including housewares, textiles and refrigeration, where we've made meaningful changes to our assortment and value positioning. We'll keep going systematically. And over time, this will become embedded in how our merchandising team goes to work every day. Turning to convenience. The investments we've been making here continue to pay off. Digitally enabled comp sales grew 30% in the quarter, reflecting 2-year stacked comp growth of 64%, and our members are telling us loud and clear, they love what we're doing. What we're really focused on is saving our members' time in addition to saving them money, and that combination is powerful. Our members are engaging with us digitally in many ways from buy online, pick up in club and same-day delivery to ExpressPay in the club and growth is strong across all of them. ExpressPay penetration, in particular, continues to grow and members who engage with our digital conveniences spend significantly more with us and are more loyal over time. Bev, our AI-powered shopping assistant, is live and gaining momentum. She's now had over 100,000 conversations with members, helping them find products, check club hours and get more out of their membership. It's a great example of how we're using technology to take care of our members in new ways. And finally, our footprint. New clubs are a key engine of long-term growth for our business, and our team is delivering. We're making excellent progress on our footprint expansion. In the second quarter, we opened three new clubs in Texas, Waxahachie, Fort Worth and Grand Prairie, bringing our total in the state to four. We also added a new gas station in Edison, New Jersey. We have 7 additional club openings and one relocation planned for the remainder of the year, and we remain committed to our pace of 25 to 30 new clubs every 2 years. We also announced a new club coming to Tyler, Texas, further expanding our presence in the Greater Dallas market. The performance of our new club portfolio remains very strong and is a key piece of our long-term strategy. For Texas specifically, we're very pleased with what we're seeing. Membership continues to track more than 30% ahead of plan. Member behavior is consistent with what we see in the other new clubs, strong engagement across the box with higher GM penetration, and our gas volumes have been outstanding. To put a finer point on the value of gas to our members in Texas, all 4 gas stations are in the top 30% of our chain for gallons with 2 of the stations cracking the top 10%. This performance in Texas should not be a surprise as it follows the track record of success we've built with expansion in both new and existing markets. Last quarter, 22 of the 23 clubs we opened across 2022 to 2024 comped above the chain average with the 2024 class of 7 clubs comping double digits last quarter. The consistency of our performance is a testament to the teams who show up with the goal to make the next opening the best one yet, and I'm proud to say our teams are delivering on that promise. Before I turn it over to Laura, I just wanted to say that this was a quarter we can all be proud of, and it doesn't happen without an incredible team. Our team members across the clubs, distribution centers, supply chain and club support center show up every single day to take care of the families who depend on us. And results like these are a reflection of their hard work and dedication. I'm proud of what we've accomplished together. I'll now turn it over to Laura. Laura Felice: Thank you, Bob. I'd like to echo Bob's gratitude for our team members across our clubs, supply chain and club support center whose dedication to our members and our purpose made this quarter possible. Let's dig into the results. Net sales in the second quarter were $6.1 billion, increasing 15.9% year-over-year. Total comparable club sales increased 11.9% and excluding the impact of gasoline sales, merchandise comparable sales increased 3.1%, driven by a balance of traffic and ticket. Inflation was just under 1 point in the quarter. Our perishable, grocery and sundries division comped up 2.8%, led by grocery. General merchandise and services grew 5.3%, driven by strength in consumer electronics and Home. Membership fee income grew 9.9% to $136 million, reaching a new milestone of 8.5 million members. Please note that we continue to expect MFI growth to moderate throughout the year as the impact of last year's fee increase normalizes. Gross profit increased 10.3% to $1. $11 billion in merchandise gross margin rate decreased approximately 20 basis points year-over-year, reflecting the balance of our continued investments in value for our members and our commitment to delivering for our shareholders. Fuel profit exceeded plan, supported by strong execution and favorable market conditions during the quarter. Comp gallons increased 10.5%, and we continue to take share as industry data indicates overall comp fuel gallons declined by approximately 5% during the period. SG&A was $851 million and improved as a percentage of net sales year-over-year. The increase in absolute dollars was largely driven by the costs that come with opening new clubs and gas stations, including labor, occupancy and depreciation as we continue to grow our owned club base. This was partially offset by a gain from a sale-leaseback transaction on our new ambient distribution center in Ohio. Adjusted EBITDA increased 14.3% to $347 million and adjusted EPS was $1.36, up 19.3% and ahead of our expectations, largely driven by the outperformance in our gas business. Turning to the balance sheet. We ended the quarter with inventory levels up 2% year-over-year on a per club basis with in-stock levels approximately flat year-over-year, reflecting the team's continued focus on getting the right product in the right clubs at the right time. Cash flow remained healthy in the quarter with adjusted free cash flow of $266 million, well ahead of the $87 million we generated in the second quarter of last year, reflecting the strong operating performance of the business. Our capital allocation strategy remains consistent. We believe the best use of our cash is applying it towards profitably growing the business, including investments in membership, merchandising, digital capabilities and real estate. We ended the quarter with net leverage of 0.5 turns, which continues to provide us with meaningful flexibility to invest in long-term growth. In the second quarter, we repurchased $124 million of shares, and we have approximately $422 million remaining under our existing repurchase authorization. We will continue to take a disciplined approach to deploying our capital to maximize shareholder value. Turning to our outlook. We are pleased with our outperformance in the second quarter. We are maintaining our full year guidance of 2% to 3% comparable club sales growth, excluding gasoline. For adjusted EPS, we are raising our range and now expect $4.60 to $4.80 for the full year, reflecting the strong results we delivered in the second quarter, particularly in our gas business. As always, our outlook reflects our current view of the consumer and the broader operating environment, and we will continue to manage the business with discipline while investing for long-term growth. With that, I'll turn it back to Bob. Robert Eddy: Thanks, Laura. Before we open it up for questions, I just want to take a step back and reflect on what this quarter represents. We came in ahead of our expectations on nearly every dimension, sales, membership and the bottom line. This is not a coincidence. It's due to a talented team figuring out new ways to invest in our members. Our members continue to reward us for the value and convenience we provide, and that shows up in the traffic growth, the share gains and the membership momentum we've sustained. Our strategic priorities are working. The investments we've made in experience, convenience and our footprint are bearing fruit, and we are as excited as we've ever been about the road ahead. As we wrap up, I want to talk about our purpose. We take care of the families who depend on us. We live this purpose every day. In Q3, we launched a chain-wide initiative that will let our members help live our purpose. Members can round up at the registers and club with donations going to the Dana-Farber Cancer Institute, a world-renowned organization at the forefront of cancer care and research. This campaign is a first for us, and we look forward to making a difference in the communities where we live and work. I also want to take a moment to recognize someone who has been a huge part of building what we have here. Paul Cichocki, our Chief Commercial Officer, is retiring after an incredible career and a great run with this company. Paul has been instrumental in so many of the merchandising and commercial advances that have made BJ's a stronger business, including building a great team ready to take over for him. Paul, you always drove with your heart, and it showed in everything you built here. Thank you for everything. With that, let's take some questions. Operator: [Operator Instructions] Your first question comes from the line of Edward Kelly with Wells Fargo. Edward Kelly: Bob, I wanted to ask you about investment. And you had the tax refund benefit, which you've been talking about playing into the business. Fuel has been strong as well. Can you just talk about how much of this is getting put back into the business? And then what you think the return on that investment is as you think about sort of like the sales and the traffic? Robert Eddy: Yes. Thanks for your question, and thanks for everybody's attention this morning. I understand there were some technical difficulties on the beginning of the call. Just know that we were going to post a copy of our prepared remarks on our Investor Relations website to hopefully clear that up and the recording should come out clear. But I want to apologize for that. Certainly put a little bit of a damper on what I think are fantastic numbers for our company as we report those this morning with overperformance in sales and margins and gasoline and membership on the bottom line, just a wonderful quarter that our team put together. And I think, Ed, to get to your question, it is because of the investments we continue to make in our member. It's really our job to provide great products but most particularly great value on those great products. And we will take every opportunity we can to make investments in that idea. Certainly, we need to balance that with all of our other constituencies. But I know the team did a fantastic job this quarter doing so. We obviously had the tariff refunds that you mentioned for the past couple of quarters, and we're just about through those as we sit here today. And then we had a great quarter from a fuel profit perspective and invested some of those dollars in our membership as well. And the idea there is not necessarily short-term payback, it's long-term lifetime value. And the idea is the better people feel about our prices and our products and the value that they get from their membership, the more they come to see us. And we know that the frequency with which they come to see us is the biggest predictor of their ability or their willingness to renew their membership and the biggest contributor to lifetime value. And so as we continue to invest in our member, it really does become the flywheel of the company as we are trying to make sure that they enjoy their visits with us and they feel the value every single day, while we're doing other things like improving our convenience efforts and our merchandising and our real estate footprint. So we're not necessarily looking for returns within one particular quarter. Sometimes those happen, but we're looking for an effort that builds over time that really underpins the value of BJ's membership. Edward Kelly: And it's just a follow-up, I guess, for maybe for Laura. Can you just parse out operating expense a little bit? You talked about a sale leaseback gain, but then the dollar growth in operating expense is higher than it's been in a while. So I don't know if there was some offset to that, but any color around the magnitude of the sale leaseback and what the offsets were on that? Laura Felice: Yes. Ed, thanks for your question. I think you brought up a good point about the sale leaseback that we did in the quarter. I would say before I get to the numbers that, that being able to do a transaction like that, I think, speaks to the strength of the company and where we've come from to where we are today. And so you know we've spent a lot of time working on our -- working with the strength of our balance sheet as we've paid down debt. And so that's offered us the opportunity to be able to buy locations versus a straight lease like we would have historically done. As we've done that, we find opportunities in our portfolio where we're able to create value and long-term growth that we can put back into the company. And so that the transaction that happened this quarter with our Ohio distribution center is an example of just that. From a numbers perspective, the gain on that was relatively small in the grand scheme of things. It was about $11 million to the P&L. But we're happy with that transaction. And again, I think where we've come from a company perspective, I think just speaks to us to be able -- speaks to how we've been able to add transactions like that, that add value and are accretive over the long term. Operator: Your next question comes from the line of Peter Benedict with Baird. Peter Benedict: My first is just is on MFI, the membership fee income grew 10% kind of sequentially stable there. I'm curious, I mean you gave the member numbers, so the sign-ups sound like they're good. I'm just curious with the benefits of the fee increase tailing off, we would expect that -- we would have expected that to slow. So is there something happening in the core that's reaccelerating here? I'm just curious kind of maybe the trends around higher tier membership renewals, that type of thing. That's my first question. And then I have a follow-up. Robert Eddy: Yes. Pete, look, I think our membership team continues to do a fantastic job really growing our company. It's the backbone of what we do here. It's the foundation of everything. And they had a very, very strong quarter. As you know, we had about 10% growth in the quarter that pretty much mirrored what we saw in the first quarter. And our plan for the year would have seen that 10% slide down to about 6% at the end of the year. And so the Q2 performance, in particular, was very strong. And really, I think it just highlights the value of what we're giving our members and our strength in our new clubs as well. So if you think about the building blocks to MFI, it's the number of members. We had a strong acquisition quarter, and the team continues to innovate and figure out new ways to get in front of prospective members and to come up with offer constructs that make sense to people. We certainly want to renew all those members, and we had a fantastic renewal rate performance during the quarter as well. We now are at another all-time high from an easy renewal perspective in terms of the number of members that participate in that automatic renewal program. If you think about the quality of those members, you mentioned higher tier, we're at an all-time high there as well, about 43% of our membership in higher tier members. That's far and away the best number that we've had and we continue to grow those folks. And you know they spend more, they renew at higher rates. They are active in many categories, all the things that we like to see. And -- and so I think it was a fantastic quarter for the membership team. I still do think you're going to see the benefits of the fee increase wane over the year. And so we are, again, sort of guiding to finish the year at that 6% exit rate. But hopefully, we can continue to put up good quarters as we go through and explain the value of a BJ's membership to folks and have them join our franchise. It's been a great run for our membership team. And you and I have talked a lot about the big differentiators and where we were 5 or 10 years ago versus where we are today. And I would tell you that the biggest differentiator I see is our ability to grow membership in comp clubs. And we once we're not very good at that. And today, we do it very consistently, and we were up 2% to 3% during the quarter. So it was a really fantastic result, and congratulations to that team. Peter Benedict: That's great color, Bob. Good to hear. And then I guess maybe just on the traffic acceleration you talked about during the quarter. I'm curious, I mean, how much of that you think was related maybe to the price investments you started to take earlier? How quick is the response mechanism there? And as you think about the 2% to 3% merch comp plan for the year, how much of that do you think is kind of traffic versus ticket just at a high level? Robert Eddy: Yes. No worries. Good traffic number during the quarter. About half of the comp was driven by traffic. That was pretty significant acceleration from what we saw in the first quarter. It's hard to tell whether it's related directly to the investments we made in the first quarter. I would like to say some of it is. That's certainly the idea. We would certainly see traffic before we would see sales dollar benefits just given the math of lowering prices. But that is really the idea of what we're trying to do, invest in our members, put the best products on the shelf for them to see, talk to them in the ways that they -- that resonate with them and they reward us with traffic. And so I think the team did a nice job on all of those fronts during the quarter. As far as the 2% to 3% guide, we left that alone. I think we'll be in that bracket, hopefully towards the high end of that bracket for the full year. We sit comfortably right in the middle of that bracket at this point. And as I see it, hopefully, our traffic continues through the back half. We've got some laps to think about in terms of the 3-year stack on the port strike and the general merchandise build from last year in Q4. But I think if you think about the base of our business, it is how many members we have and how active are those members. And we just talked about MFI and the number of members being fantastic. And now we're seeing great continued traffic growth, right, our 18th consecutive quarter, we said in the prepared remarks. And hopefully, we can keep that streak alive. Operator: Your next question comes from the line of Kate McShane with Goldman Sachs. Katharine McShane: Our question is just on the sustainability of some of the price investments that you have been able to make over the last 2 quarters, given that they were driven and financed by tariff refunds, how do you think about these price investments and lapping them when there aren't necessarily tariff refunds to fund them? Robert Eddy: Yes, good question. It is our endeavor to match our investments with continuing sources of funding. And so while the tariffs have been -- tariff refunds have been funding them in the first half of this year, we have other initiatives that will fund them in the back half of the year. And so I think the worry that margin rates will decline precipitously when we don't have that tariff funding is misplaced. I do think we've identified other places to source funding and that you can think about what those might be. The tariff refunds we've talked about are all first-person tariffs. So the things that we paid and gotten refunded, we are now working with our suppliers to get our fair share of their refunds. We are working with our suppliers to figure out the optimal assortments. And in some cases, that may come with margin benefits there. We've got other sources of margin like others do with retail media and some other things. And certainly, gas plays in there as well. We would always take some portion of any quarter's gas feed and invest those as well. And so we understand our job is to deliver margin dollars globally, not necessarily a particular rate. Within reason, I don't really care about any particular rate. I know my job is to deliver profit dollar growth. And that's frankly what our members expect from us, too. They want the right prices, and that means we got to go get the right cost. And so we will continue to find ways to invest in our membership and take every opportunity we can to do so. Katharine McShane: And just a follow-up question is on general merchandise. I wondered if you could kind of talk through what we can expect from that category in Q3 and Q4, given what we're lapping last year and just given new leadership within merchandising. Robert Eddy: Yes, sure. I mean Jim has been on a little bit of a run lately, which is great to see. It was once I would argue our weakest business, and now we're starting to make some progress. That progress started in our consumer electronics area, which has probably been our strongest area, and that's the easiest to impact. But our team has done a nice job improving our assortment at Home. We talked a little bit about that in our prepared remarks in some of those categories. And our seasonal business was positive comp during the quarter as well. That's a big business in the second quarter, and it was nice to see that get positive. We've got some room to improve there for sure. And we've got some room to improve in apparel and the rest of the categories. But for me, nice to see a continued positive comp trend. Nice to see the breadth of the comp. And under the covers, you mentioned the changes in merchandising leadership. Stephanie Reibling has done a fantastic job. You know general merchandise is where the core of her experience lies. She's got her fingerprints on some of these early wins, but know that they are early, we will go through this assortment ruthlessly and make sure we're offering the right products at the right value. And we've also added some talent beneath Stephanie in this area with a new DMM of General Merchandise and a couple of new DMMs as well. So it starts with the team, right? We've got a fantastic team, and they are all on the ground and working hard to make sure that the next quarter is better than Q2. And I guess I would just again say just keep in mind the big lap we have in Q4 from a GM perspective. And other than that, we're very pleased with where we landed the quarter. Operator: Your next question comes from the line of Mike Baker with D.A. Davidson. Michael Baker: I wanted to focus on Texas a little bit. You said you were 30% ahead of plan. What is the plan relative to sort of company average or typical openings? How big can Texas be? What are you seeing competitively? Are others reacting to you guys moving there? Just a little bit more color on Texas, please. Robert Eddy: Maybe I'll just -- a couple of words, Mike, and then kick it over to Bill. I just wanted to thank Bill. He's done a fantastic job really creating this whole growth engine within real estate that we have. It's a big effort. His team has done fantastic work. And I couldn't be more proud of him and the team for what we've accomplished. And Texas is just one point in that journey, and it's going very well. But I just want to thank Bill publicly for all the things he's done. So Bill, tell us about Texas. William Werner: Thanks, Bob. I appreciate that. Mike, good to talk to you. Yes. So Texas, as we offered in some of the prepared remarks, we're seeing exactly what we hoped we would see. We're seeing outside membership gains. We're seeing the membership engage throughout the club across categories, and we shared some data in terms of the gas program down there and what we're seeing in terms of gas gallons. When we look at something like engagement of gas, we know that, that is a strong indicator of a likelihood to renew. And so when we look at something that early on, we feel really good about the prospects of being really successful down there with the membership base. So really excited, but more to go do. We'll open up our club in Mesquite later this year. We announced our next club in Tyler, which is just outside the DFW Metroplex for early next year. And we have a lot more to come that you'll hear about in the future. And as you think about Texas, it's just part of the broader real estate story. As I reflect back on -- we're probably having the same conversation when we opened up in the Michigan market back in 2019. And as we sit here today, those investments that we've made in Michigan have led to an expanding footprint there, and we're the gateway opening up throughout the adjacent Midwest markets when I think about Nashville, Indianapolis, Columbus, Pittsburgh. And so this is just a continuation of the long-term story. And so we're really proud of what we're seeing down there. We're excited for the Q3 clubs to get our Rotterdam club relocated and open for our members and as well as opening up our second Alabama club down fully on the Gulf Shores as well as expansion in Florida, which has been an amazing market for us with our club in Ocala, with both the Q3 new clubs showing, again, great early membership results. And Bob talked about the membership engine earlier. It's certainly hitting in comp clubs, but it's certainly working super hard in our new club efforts. So Texas is really important. We're doing great. We're really proud of the results. It's a continuation of the broader new club story and all part of this engine that we've built over the last 7 or 8 years. So really excited about the future. Michael Baker: Yes. Great. I'll ask -- we'll call it a follow-up, but candidly a different topic. But would you guys be willing to talk about the pace of sales throughout the quarter by month? Robert Eddy: Mike, it was pretty ratable through the month. So nothing really to call out from a variability perspective. Operator: Your next question comes from the line of Chuck Grom with Gordon Haskett. Charles Grom: So great quarter. My question is on CMP or SKU rep. I know it's something that the company has done in the past and it's come and gone over the years. But just can maybe, Bob, just double-click on the opportunity here, how you see the SKU count in the store. Maybe give some perspective on when you're opening up these new stores in Texas and elsewhere, how many items you're opening up with relative to the total chain. It's been a long-standing opportunity, in my opinion. So just curious if you could flesh that out for us. Robert Eddy: Yes, I'd be happy to, again, everybody. Sorry for the technical difficulties. CMPs have been a good part of our strategy for the past several years. And candidly, in the last couple of quarters, they've taken on a bit of a different tenor, particularly with Stephanie's arrival. I mentioned earlier, we're using CMPs to source margin, but they really serve a much broader purpose than that and they get directly at what you're asking about. So we find ourselves over SKUed, as you point out. It has been a long-standing opportunity. We have had efforts to cut SKU count in the past. And I would argue we didn't prosecute that opportunity in the right way. We just cut SKUs, which cut sales and then we added some SKUs back. And so really, what we're doing now is removing unnecessary choice, so I think multiple flavors of body wash, pushing all the volume into the remaining body wash flavors and then adding new innovative products and white space categories. And the addition of those new products, those new need states, that new white space category, that is sourcing sales growth as well and sort of giving us the formula where we can cut SKUs and see sales go up and see margin dollars go up. And so our goal really is to take about 20% of our SKUs out over the next couple of years, and that will sort of happen ratably. That will largely get the chain down to where we find ourselves in new clubs, maybe a little bit lower than that. So our average number of SKUs in the legacy club is about 7,500 or so at this point. And with the new clubs come with a 6 handle on them. And so I would -- I'd like to get it down to about 6,000, 6,500 SKUs, I think, is the right place for us over time. We've seen some of the benefits so far. We talked about it in the prepared remarks a bit if it wasn't blocked out some benefits in beverages and Active Nutrition, where we're really taking out some unnecessary duplication, adding some new cool stuff. So think about in traditional soda, we don't carry cans and 1 liters and 2 liters of the same product anymore. We would add -- and we're adding in healthy soda like coffee and things like that. That's the idea around the building. So we've set some categories in the second quarter. We saw some good results. We'll set some more in September. And then our next wave will happen around the end of the year. So this is an ongoing effort. I think it will be powerful. Stephanie has brought a great member focus to it, where we're trying to be sensitive to what the members' needs are, and that might color what we might cut. It also might color what we might add into the mix as well. And the early results are good in this wave. So we'll keep it going, and hopefully, we'll see some more good results. Charles Grom: That's great. And then I guess my follow-up is just on the gas business, 10.5% gallon growth, I think you cited, which is much better than the industry. I guess how are you using that as an opportunity to acquire new customers? Obviously, the MFI was much better than expected. The underlying health is really good. But are you using gas to drive new customer growth? And can you just flesh that out for us? Robert Eddy: Yes, of course. Let me pass that over to Bill since he runs gas for us. William Werner: Yes. Thanks, Chuck. Absolutely, we use it to drive membership. We've seen members block to us with the 10.5% comp. The value of gas that we offer to our members is just as important now as it's ever been. And so we've definitely tested acquisition offers with gas discounts that our members have responded to in an outsized way. And it's been a great partnership with our membership acquisition as we've tested and quickly learned into offers and then expanded them when we've seen great results. But Chuck, I want to take a moment just to come back to the gas business because the 10.5% comp that we delivered is certainly a testament to the team that is offering the value to our members every day, but also to the structural investments that we've made. So we've talked a bunch about this call about both short-term investments that we're making in price, but also long-term investments that we've made into something like real estate. And when we think about the overall gallon growth that we've delivered that in an environment like this allows us to deliver outsized value for our members and source outsized EPS for our shareholders. That's only because of some of these big structural long-term investments that we've made. So as I think about on the real estate side, we have 50% more stations than we did at the IPO. We couldn't have delivered the gallons that we delivered in Q2 without those continued investments over time. And then I also think about something like our co-branded credit card program, where today, we have over 2 million members that are getting either a $0.10 or $0.15 per gallon discount every day at the pumps, right? And that you don't grow it to 2 million over time without working at it every single day. And the team that does that has been extremely successful in growing the credit card base. So these big long-term decisions that we've made to invest in the value for our members come home and pay dividends in an environment like Q2. And so it's just a really cool example of where how the company invest in lifetime value can come back to payback, again, both to our members through an increased outsized value in a quarter like this as well as to our shareholders. Operator: Your next question comes from the line of Simeon Gutman with Morgan Stanley. Pedro Gil Garcia Alejo: This is Pedro on for Simeon. Nice quarter. I meant to ask you about our merch margins and price investments. We've seen merch margin rate down 20 basis points this quarter, driven by continued price investments, some offset from tariff refund benefits. How should we think about the cadence of merch margin in the back half of the year as some of the tariff refund tailwinds potentially diminish? And how you think about price investments for the rest of the year? Laura Felice: Pedro, I'll take that one. Look, I think we've talked a lot on this call already about price investments and how we view them over the long term and important for lifetime value of our members. We don't guide to merch margins. And so I think what you will see us do as we continue to travel through the year is balance investments with sources of funds, right? So use and source of funds in quarters and also look to continue to deliver value to our members. And so we think it's important to look at some of the milestones and some of the metrics in our business. We think about traffic in our clubs. We've talked about that already, continued positive traffic momentum that means our members are seeing the value. We've talked about market share and some of our -- how we continue to gain market share on both dollars and units. And so all of those are important as we look out into the back half. You'll see us continue to manage, I think, for the short term and also for the long term. Pedro Gil Garcia Alejo: Okay. Great. That's helpful. And if I could ask you a follow-up about membership fee income and renewal rates. Nice job growing membership fee income this quarter. Could you break down for us the key drivers of that growth? How much is attributable to the fee increase versus member count from new clubs, member count at existing clubs? Laura Felice: Yes. Maybe I'll take that one, too, Pedro. Look, we don't give specific numbers on how much is coming from new clubs. But maybe I'll give you some context and a little bit more color on the things we talked about. We're really happy with the overall member base growth. We hit a milestone of 8.5 million members. And so we continue to grow our overall member count, I think, faster than we've ever seen in the history of the company. We're happy with where our members are from a higher tier penetration, our members that are engaged with the co-branded credit card. Bill just talked a little bit about that. We have over 2 million members in our co-branded credit card product. And all of that is important to the short-term MFI results as well as the long-term lifetime value of members and their propensity to renew, which is what we like. We talk about MFI as the leading indicator in our business. And so we view the results that we put up this quarter as a marker of the continued success that the membership team has made. I'd like to thank them for all their work. We're certainly in a different place than we were even 5 years ago from a membership perspective and acquiring members and the quality of members. So we'll look to continue to do that as we continue into the back half of the year. Operator: Your next question comes from the line of Steven Zaccone with Citigroup. Steven Zaccone: Stores look great in Texas, by the way. Laura, a question for you. How do you break down the EPS guidance rates? So how much of it is the fuel exceeding plan? It seems like the sale leaseback is $0.06 if we did the math right. How do we think about the guidance raise? It seems like the second half expectations are pretty much unchanged despite you tracking towards the higher end of your same-store sales outlook. Laura Felice: Steve, I think you're looking at that the way we think about it. We talked a little bit about this. Bill talked a little bit about our gas business and how we view it long term, certainly successful in the quarter. And so as we step back and think about the raise on EPS, that is a result largely of our gas business. We did invest some of that in the quarter, but really just taking the beat and raising on it. So we feel great about our guidance range for the back half and where we'll land for the full year. Bob already talked about the top line and why we left the comp guidance alone, but that's the story on the EPS guide. Steven Zaccone: Okay. And then follow-up just on Texas. How do we think about the time line for these stores to reach maturity? I know it's a new market for you, but are there learnings from Michigan in the past from Nashville? Like how do we think about the time line to reach maturity? William Werner: So it's been pretty consistent across both new and existing markets where we see membership growth throughout the first couple of years and then generally, a member grows into their sales potential over the first couple of years. So generally, within 3 to 5 years, you're seeing the club mature up towards its regular potential, and then it would kind of grow with the chain from there. And so there's no better proof point to that than some of the data we gave on -- in the prepared remarks on the comps of the new clubs where they continue to outperform the chain, both individually and as a cohort. And as you look at the data point that we gave on something like our 2024 class comping double digits, right? That's the magic of the math coming to life of membership growth combined with spend growth leading to outsized performance of these clubs. And so we've seen it across the board. It's been widespread. It's been consistent. It's a testament to the teams that are working on this every day and give our members an unbelievable experience and deliver amazing value to these new communities. And we see the results. And I have no doubt that we'll see the same thing, whether it's in the Texas clubs or whether it's in Poly or Ocala or any one of our new clubs open because we've had a demonstrated history of success now across the board. Operator: Your next question comes from the line of Oliver Chen with TD Cowen. Gabriella Garr: This is Gabriella Garr on for Oliver. I have 2 questions. The first one is on the digitally enabled sales. I know you saw a nice 30% growth this quarter. I wanted to ask as digital becomes a larger part of your business, what are you seeing in terms of member spend, frequency, retention and other important metrics compared to members who shop primarily in clubs? Robert Eddy: Gabriella, certainly a great quarter from a digital growth perspective on top of a great Q1, a great Q2 last year. I think our 2-year stack is over 60. So the team has done a nice job of putting things in front of our members that they enjoy that save them time in addition to saving them dollars. And we're investing in this. We have been for a while because of the question you're asking, the folks that engage with each of these digital properties become more valuable over time. They interact with us more. They come to see us more physically, they buy more and they renew at higher rates. And that is a compounding thing. The more digital properties they interact with, the better they are. So if they clip coupons, they become better. If they order something to be shipped to their home, they become better. If they order BOPIC or same-day delivery, they become better. If they use ExpressPay where you check out in the clubs, they become even better than that. And so the more ways we can get them to engage with us, whether it be through our desktop app or our desktop website or our app, they really change their behavior for the better over time. And so I think we're around 19% penetration of our business at this point. And I hope that, that continues to grow. It is really one of the great stories within our company at this point. And we'll continue to place investment dollars here. We'll continue to talk to our members and source ideas from them on how we do this. And we've got a concentrated effort right now to grow our ExpressPay penetration, and that's been going well as well. So good results this quarter and more to come. Gabriella Garr: That's helpful color. And then just as a follow-up question. As we think about value perception, price gaps and as well as the merchandising improvements that you guys are making, can you shed some light on how private label is playing a role in all of this, both in success today and then maybe categories where you see opportunities to expand penetration of your own brands? Robert Eddy: Yes. We haven't talked about own brands in a while, but certainly a big business for us, several billion dollars of our sales are done in our 2 owned brands. And it really comes down to quality and value. We put good quality products in front of our members, and we place a fantastic price on them. And that is even more relevant these days in pressured economic circumstances, right, where we're giving our members a terrific value. Think about our Berkley Jensen Paper towels, for instance, I think we're 35% lower priced than the comparable national brand on a fantastic towel, and we make a little bit more margin than we would if we were selling the comparable national brand. So we make up two, we've grown that business to be about 65% unit share. We're putting a great product in front of people at a fantastic value, and they come back to get it from us. And we need to do more of that. We need to continue to improve our own brands. But as we think about the overall value that we provide our members, we understand that, that is our job. We're supposed to provide them terrific value and own brands is a great way to do that. You mentioned our price gaps. We haven't talked about that. Our price gaps got better during the quarter. And so our investments are paying off. It's a tough market out there from a cost increase perspective and our -- some of our competitors are having to raise prices faster than we might, and we've been making investments there. All of that comes back to that central theme of offering the right value, and we'll continue to do that day in and day out for our members. That is our job. That's what they pay us to do. And we love to do that. We are always pleased to make investments in our members because we know it pays off in the long term. Operator: Your next question comes from the line of Greg Melich with Evercore ISI. Gregory Melich: Sorry if I missed it in the opening comments, but Laura, could you help us with the ticket expansion, which I guess was around 1.5 points. How much of that was unit growth items in basket versus inflation, which if I remember correctly, was slightly negative in 1Q? Laura Felice: Yes. Greg, thanks for the question. We talked a little bit about inflation in the prepared remarks. It was close to 1% in the quarter. And so certainly, a step move off of where we were in the first quarter. And so I think as we step back and think about our comps that we delivered for the quarter, we're really pleased with the 3.1% equally balanced roughly between traffic and basket. And so we like that. Our members are certainly seeing the value in what we're offering them every day. Gregory Melich: That's super helpful. And Bob, I'd love to follow up on the openings. Given the success in Texas, just update us on how many clubs you're opening this year and next year? And do you think there's an opportunity to accelerate that going forward? Robert Eddy: Yes. Thanks for the question, Greg. I'll kick it off and Bill can talk about the specifics. As you point out, our real estate growth has been fantastic. We've gone from not opening clubs a few years ago to opening at sort of a 12 to 15 clip at this point. And we've committed to maintaining that 25% to 30% every couple of years cadence. And we've challenged ourselves to think about going faster as well. And so that will take a couple of years to sort of make its way into the pipeline. But the more good clubs we can open, the better for us. And so we're pleased with where we are, and we'd love to go faster. But let me hand it over to Bill. William Werner: Yes. I think, Greg, that's exactly right. We're -- at this point, as we look out on the horizon, the pipeline for plus or minus the next 2 years is pretty baked, and we're working on projects for '28, '29 and '30 right now. And the great news is that the success that we've seen in the market is paying off in terms of our opportunities. As we're out in the market having conversations with developers, -- in other parties within the real estate world, we've seen more opportunities come to us. We've seen the cap rates come down on our buildings, which improve the overall economics that are available and improve our returns. And so again, I come back to -- we've made a series of long-term investments over the last few years that are paying off. And the investments that we make today in a market like Texas, we're going to look back 5 years from now and be really happy that we made them. And as we look forward to the club of the pipeline, again, as we look at a decade out now, we're going to be really proud of the footprint that we have built. So more to come in terms of the acceleration of the growth, but we feel like we're in a really great spot to continue to deliver value to the members and the communities that depend on us. Operator: We have reached the end of the Q&A session. This concludes today's call. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. BJ's Wholesale Club (BJ) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

BJ’s Wholesale Club Holdings, Inc. BJ delivered second-quarter fiscal 2026 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Results reflected accelerating comparable sales, record membership growth and strong fuel performance. Management highlighted continued momentum across strategic priorities, including digital engagement, merchandise improvements and footprint growth. The company also raised its full-year adjusted earnings outlook while maintaining its comparable club sales guidance. BJ’s Wholesale reported adjusted earnings of $1.36 per share, which beat the Zacks Consensus Estimate of $1.16 by 17.2%. The bottom line increased 19.3% year over year, supported by strong operating performance and fuel profitability. This operator of membership warehouse clubs generated total revenues of $6,226.6 million, up 15.7% year over year ahead of the Zacks Consensus Estimate of $5,883 million by 3.5%. Net sales increased 15.9% to $6,091 million, while membership fee income climbed 9.9% to $135.6 million, supported by strong member acquisition, retention and higher-tier membership penetration across both new and existing clubs. The company reached a record 8.5 million members, highlighting continued engagement with its value-focused warehouse club model. We had expected membership fee income growth of 7%.Total comparable club sales increased 11.9% year over year during the quarter, while comparable club sales excluding gasoline improved 3.1%, which came ahead of our estimate of 2.5%. The company benefited from balanced traffic and ticket growth, with management noting that traffic accelerated during the reported quarter. BJ’s also marked its 18th consecutive quarter of traffic growth and 15th consecutive quarter of market share gains.Digitally enabled comparable sales continued to be a key growth driver, rising 30% year over year and reflecting a two-year stacked growth of 64%. The company continued to see strong engagement across digital offerings, including buy online, pick up in club, same-day delivery and ExpressPay. BJ’s also highlighted progress with its AI-powered shopping assistant, Bev, which has helped members find products, check club hours and improve their shopping experience.Fuel performance also supported quarterly results. Management noted that comparable gasoline gallons increased 10.5%, with BJ’s continuing to gain share as industry fuel volumes declined during the period. Strong volume growth and favorable market conditions helped fuel profit exceed expectations. Image Source: Zacks Investment Research BJ’s Wholesale reported gross profit of $1.11 billion in the second quarter compared with $1.01 billion in the prior-year period. However, the merchandise gross margin rate, excluding gasoline sales and membership fee income, declined approximately 20 basis points year over year. The decline primarily reflected continued investments in pricing, partly offset by tariff refund benefits recognized during thequarter.Selling, general and administrative expenses increased to $851.2 million from $786.4 million in the prior-year quarter, mainly due to higher labor, occupancy and operational costs related to new club and gas station openings. Increased depreciation expenses from a larger owned club base also contributed to the rise. These pressures were partly offset by a gain from a sale-leaseback transaction during the quarter.Operating income increased 16.5% year over year to $252.4 million, while adjusted EBITDA rose 14.3% to $347.2 million. BJ’s Wholesale Club continued expanding its footprint during the quarter, opening three new clubs in Texas and one new gas station in Edison, NJ. The company ended the reported quarter with 267 clubs and 206 gas stations across 22 states.Texas remains an important growth market for the company. Management said membership in Texas locations is tracking more than 30% ahead of plan, while customer engagement across categories and gas performance have been strong.BJ’s expects to open seven additional clubs and complete one relocation during the remainder of fiscal 2026, while remaining committed to its long-term goal of opening 25-30 clubs in two years. BJ’s Wholesale Club ended the quarter with cash and cash equivalents of $30 million, while total debt stood at $629.2 million. Stockholders’ equity totaled $2,197.4 million as of Aug. 1, 2026. Net cash provided by operating activities was $401.5 million in the reported quarter. Adjusted free cash flow was $265.5 million. Capital expenditures, net of disposals, totaled $177.3 million during the quarter. During the second quarter, BJ’s repurchased 1,384,278 shares for $124.1 million, inclusive of associated costs. About $422.1 million remained available under the company’s existing share repurchase authorization at quarter-end. BJ’s Wholesale maintained its fiscal 2026 comparable club sales outlook, excluding gasoline sales, at 2-3% growth. However, the company raised its adjusted earnings per share guidance range to $4.60-$4.80 from the previous outlook of $4.40-$4.60, reflecting strong second-quarter performance, particularly from its fuel business. Capital expenditures are still expected to be approximately $800 million as BJ’s continues investing in new clubs and distribution capabilities.Shares of this Zacks Rank #3 (Hold) company have advanced 15.2% over the past three months compared with the industry’s 4% growth. The Chefs' Warehouse, Inc. CHEF, a premier distributor of specialty food products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for CHEF’s current fiscal-year sales and earnings calls for growth of 10.6% and 33.7%, respectively, from the year-ago figures. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average Target Corporation TGT operates as a general merchandise retailer in the United States. TGT carries a Zacks Rank #2 (Buy).The consensus estimate for Target’s current fiscal-year sales and earnings implies growth of 4.6% and 35%, respectively, from the year-ago reported figures. TGT delivered a trailing four-quarter earnings surprise of 10.5%, on average. Dollar General Corporation DG, one of the leading discount retailers, currently carries a Zacks Rank #2. The Zacks Consensus Estimate for Dollar General’s current fiscal-year sales and earnings implies growth of 3.9% and 7.6%, respectively, from the year-ago reported figures. DG delivered a trailing four-quarter earnings surprise of 21%, on average. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report Target Corporation (TGT) : Free Stock Analysis Report Dollar General Corporation (DG) : Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

BJ’s Wholesale Club Holdings, Inc. reported past second-quarter 2026 results with revenue of US$6,226.58 million and net income of US$173.87 million, raised its full-year adjusted EPS guidance, advanced its club expansion including a new Tyler, Texas location, updated progress on its share repurchase program, and announced the planned retirement of its Chief Commercial Officer. The combination of stronger earnings, record membership, ongoing club growth, and continued buybacks underlines how BJ’s is reinforcing its membership-led warehouse model while managing leadership transition. We’ll now examine how BJ’s raised full-year earnings guidance and accelerated club openings may influence the company’s existing investment narrative. Invest in the nuclear renaissance through our list of 92 elite nuclear energy infrastructure plays powering the global AI revolution. To own BJ’s, you need to believe its membership-led warehouse model can keep driving recurring fee income while new clubs and digital channels deepen customer engagement. Right now, the key near term catalyst is continued membership growth and strong comparable sales; the biggest risk is margin pressure from tariffs, sharper pricing, and higher operating costs. The latest earnings beat, higher EPS guidance, and accelerating club openings all support the existing catalyst without materially changing the core risk picture. The most relevant update here is BJ’s raising its full year adjusted EPS guidance to US$4.60 to US$4.80 after a quarter of record membership and 11.9% comparable club sales growth. That move ties directly into the bullish catalyst that sustained membership expansion and footprint growth can underpin earnings. At the same time, the heavier investment in new clubs, including Tyler, Texas, keeps the concern about long term SG&A and margin pressure front and center. Yet behind the upbeat guidance, investors should also be aware that rising costs, tariff uncertainty, and new club spending could all weigh on margins over time... Read the full narrative on BJ's Wholesale Club Holdings (it's free!) BJ's Wholesale Club Holdings' narrative projects $27.0 billion revenue and $676.3 million earnings by 2029. This requires 7.1% yearly revenue growth and about a $105 million earnings increase from $571.3 million today. Uncover how BJ's Wholesale Club Holdings' forecasts yield a $101.10 fair value, a 5% upside to its current price. Before this news, the most optimistic analysts were already assuming BJ’s could grow revenue about 10% a year to roughly US$28.8 billion by 2029, helped by faster store expansion and stronger digital engagement. Compared with the baseline, that is a much more upbeat view of how quickly new clubs and membership can scale, and the Tyler opening plus raised guidance might either reinforce or challenge that story depending on how you see the balance between growth and margin risk. Explore 7 other fair value estimates on BJ's Wholesale Club Holdings - why the stock might be worth 14% less than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your BJ's Wholesale Club Holdings research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision. Our free BJ's Wholesale Club Holdings research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BJ's Wholesale Club Holdings' overall financial health at a glance. These stocks are moving-our analysis flagged them today. Act fast before the price catches up: Capitalize on the AI infrastructure supercycle with our selection of the 55 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. We've uncovered the 12 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. Uncover the next big thing with 22 elite penny stocks that balance risk and reward. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BJ. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered 18th consecutive quarter of traffic growth and 15th consecutive quarter of market share gains, driven by a value proposition that resonates across all income cohorts, though the vast majority of growth continues to be driven by higher income members. Achieved a new milestone of 8.5 million members, with membership fee income (MFI) growing nearly 10% year-over-year due to strong acquisition and higher-tier penetration. Utilized favorable fuel market dynamics and strong volume growth to generate outsized fuel profits, which were partially reinvested into member value and price gaps. Implemented a systematic Category Management Process (CMP) to optimize assortments, resulting in strong performance in beverages, Active Nutrition, and renovated Home categories. Expanded digital engagement with 30% growth in digitally enabled sales, noting that members using tools like ExpressPay spend significantly more and show higher loyalty. Successfully entered the Texas market with membership tracking 30% ahead of plan and gas volumes ranking in the top tier of the entire chain. Maintained a disciplined balance between investing in member lifetime value and delivering shareholder returns, despite a K-shaped economic environment. Raised full-year adjusted EPS guidance to $4.60 - $4.80, primarily reflecting the strong second-quarter outperformance in the gasoline business. Maintained full-year merchandise comparable club sales growth guidance of 2% to 3%, expecting to land toward the high end of that bracket. Anticipates MFI growth will moderate to an exit rate of approximately 6% by year-end as the impact of the previous year's fee increase normalizes. Committed to a real estate expansion pace of 25 to 30 new clubs every two years, with seven additional openings and one relocation planned for the remainder of the fiscal year. Plans to reduce total SKU count by approximately 20% over the next few years to remove unnecessary choice while adding innovative products in white-space categories. Recorded an $11 million gain from a sale-leaseback transaction involving a new distribution center in Ohio, reflecting a shift toward owning locations to create long-term value. Successfully navigated the conclusion of first-person tariff refunds, identifying new funding sources like retail media and supplier optimizations to sustain price investments. Announced the retirement of Chief Commercial Officer Paul Cichocki, highlighting his role in building the current merchandising and commercial leadership team. Launched a chain-wide charitable initiative allowing members to round up register totals for the Dana-Farber Cancer Institute. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while tariff refunds funded recent investments, future funding will come from retail media, supplier cost optimizations, and fuel profits. The strategic goal remains delivering absolute profit dollar growth rather than maintaining a specific margin rate. The company aims to reduce legacy club SKUs from approximately 7,500 to between 6,000 and 6,500 to mirror the efficiency of new club formats. Unlike previous attempts, this effort focuses on removing 'unnecessary choice' (e.g., redundant flavors) while simultaneously adding new 'need states' to drive sales growth. New clubs typically reach full maturity within 3 to 5 years, with the 2024 class currently comping in the double digits. Texas locations are showing outsized engagement in gas and higher-tier membership, which are strong predictors of long-term retention. Digitally engaged members are more valuable, shopping more frequently in physical clubs and renewing at higher rates. ExpressPay penetration is a specific focus area as it represents the highest level of member loyalty and spend.

This article first appeared on GuruFocus. Net Sales: $6.1 billion, up 15.9% year-over-year. Total Comparable Club Sales: Increased 11.9%. Merchandise Comparable Sales: Increased 3.1%, excluding gasoline impact, with a two-year stacked comp of 5.4%. Perishables, Grocery, and Sundries Comp: Increased 2.8%, led by grocery. General Merchandise and Services Comp: Increased 5.3%, driven by strength in consumer electronics and home. Membership Fee Income: $136 million, up 9.9% year-over-year, with a new milestone of 8.5 million members. Gross Profit: $1.11 billion, up 10.3% year-over-year. Merchandise Gross Margin Rate: Decreased approximately 20 basis points year-over-year. SG&A: $851 million, improved as a percentage of net sales year-over-year. Adjusted EBITDA: $347 million, up 14.3% year-over-year. Adjusted EPS: $1.36, up 19.3% year-over-year. Adjusted Free Cash Flow: $266 million, compared to $87 million in the prior year's second quarter. Fuel Comp Gallons: Increased 10.5%. Digitally Enabled Comp Sales: Grew 30% in the quarter. New Clubs: Opened three new clubs in Texas (Waxahachie, Fort Worth, and Grand Prairie) and one new gas station in Edison, New Jersey. Share Repurchases: Repurchased $124 million of shares in the quarter. Full-Year Adjusted EPS Guidance: Raised to $4.60-$4.80. Warning! GuruFocus has detected 7 Warning Signs with STU:P0F. Is BJ fairly valued? Test your thesis with our free DCF calculator. Release Date: August 21, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net sales up nearly 16% year-over-year with merchandise comps growing 3.1%, marking the 18th consecutive quarter of traffic growth and 15th consecutive quarter of market share gains. Membership reached a new milestone of 8.5 million members, with membership fee income growing nearly 10% year-over-year and higher-tier penetration at an all-time high of 43%. Fuel business outperformed with comp gallons up 10.5%, significantly outpacing the industry decline of approximately 5%, and fuel profit dollars exceeded plan. Digital-enabled comp sales grew 30% in the quarter, with two-year stacked comp growth of 64%, driven by strong adoption of BOPIC, same-day delivery, and ExpressPay. New club expansion, particularly in Texas, is performing well with membership tracking more than 30% ahead of plan and gas volumes in the top 30% of the chain. Adjusted EPS of $1.36 was up 19.3% year-over-year, and the company raised its full-year EPS guidance to $4.60-$4.80. Merchandise gross margin rate decreased approximately 20 basis points year-over-year due to continued investments in value for members. The company expects membership fee income growth to moderate throughout the year as the impact of last year's fee increase normalizes. Inflation was just under a point in the quarter, which could pressure consumer spending and impact future sales. The company faces a difficult comparison in Q4 due to last year's port strikes and general merchandise build, which may impact comp sales. SG&A expenses increased in absolute dollars due to costs associated with opening new clubs and gas stations, partially offset by a sale-leaseback gain. The K-shaped economy persists, with the majority of growth driven by higher-income members, indicating potential vulnerability in lower-income segments. Q: How is BJ's balancing its price investments with the need to deliver shareholder returns, especially as the benefit from tariff refunds winds down?A: Bob Eddy (Chairman, President, and CEO) explained that the company is matching its investments with continuing sources of funding. While tariff refunds funded investments in the first half, other initiatives will fund them in the back half, including working with suppliers for their refunds, optimizing assortments, and leveraging other margin sources like retail media and gas. He emphasized that the goal is to deliver profit dollar growth, not just a specific margin rate, and that investing in members drives long-term lifetime value. Q: Can you provide more color on the performance of the new clubs in Texas and the broader real estate expansion strategy?A: Bill Werner (EVP, Strategy and Development) stated that Texas is performing exactly as hoped, with membership tracking more than 30% ahead of plan and strong engagement across the club, particularly in gas, where all four stations are in the top 30% of the chain for gallons. He noted that this is a continuation of the broader new club story, similar to the success seen in Michigan, and that the pipeline for the next two years is solid, with opportunities to potentially accelerate growth in the future. Q: What is driving the strong membership fee income (MFI) growth, and how sustainable is it given the lapping of last year's fee increase?A: Bob Eddy highlighted that the membership team delivered a strong quarter with 10% MFI growth, driven by strong member acquisition, record-high renewal rates, and an all-time high in higher-tier membership penetration at 43%. He noted that while the benefits of the fee increase will wane, the company's ability to grow membership in comp clubs, which was up 2-3% in the quarter, is a key differentiator and a sign of the underlying health of the membership base. Q: How is the company's SKU rationalization process (CMP) progressing, and what is the target for SKU counts?A: Bob Eddy explained that the company is taking a more strategic approach to SKU reduction, focusing on removing unnecessary choice while adding new innovative products and white-space categories. The goal is to reduce SKUs by about 20% over the next couple of years, bringing the chain average down from roughly 7,500 to about 6,000-6,500 SKUs. Early results in categories like beverages and active nutrition have been positive, and the next wave of changes is planned for September and around the end of the year. Q: How is the company using its strong gas business to drive membership growth and customer acquisition?A: Bill Werner stated that gas is a key tool for membership acquisition, with the company testing and expanding offers that include gas discounts, which have seen outsized member response. He also highlighted the structural investments made in the gas business, including a 50% increase in stations since the IPO and a co-branded credit card program with over 2 million members, which have enabled the company to deliver outsized value and drive significant gallon growth. Q: Can you break down the drivers of the EPS guidance raise and the outlook for the second half of the year?A: Laura Felice (CFO) confirmed that the raise in EPS guidance is largely a result of the outperformance in the gas business. She noted that the company invested some of the gas beat back into the business but is primarily taking the beat and raising guidance on it. The top-line comp guidance of 2-3% was left unchanged, as the company is comfortable with its position in the middle of that range. Q: What are the key drivers of the merchandise margin rate decline, and how should we think about the cadence in the back half?A: Laura Felice explained that the 20 basis point decline in merchandise margin rate reflects the balance of continued price investments for members. She reiterated that the company does not guide to merchandise margins but will continue to balance investments with sources of funds, focusing on long-term member value and market share gains. The strong traffic and unit share growth are seen as key indicators that the strategy is working. Q: How is the digitally enabled business performing, and what is the impact on member behavior and loyalty?A: Bob Eddy reported that digitally enabled comp sales grew 30% in the quarter, with a two-year stack of 64%. He explained that members who engage with digital properties, such as BOPIC, same-day delivery, and ExpressPay, become more valuable over time, showing higher spend, frequency, and renewal rates. The company is focused on growing ExpressPay penetration and sees digital as a key driver of member engagement and lifetime value. Q: What is the timeline for new clubs to reach maturity, and how does the performance of recent classes compare?A: Bill Werner stated that new clubs generally see membership growth over the first couple of years, with clubs maturing to their full sales potential within three to five years. He highlighted that the 2024 class of clubs is comping double digits, and the 2022-2024 classes are consistently comping above the chain average, demonstrating the success of the new club model across both new and existing markets. Q: How is the company's private label business contributing to value perception and overall performance?A: Bob Eddy emphasized that own brands, such as Berkley Jensen, are a significant part of the business, offering high-quality products at prices significantly lower than national brands. He cited paper towels as an example, where the price is 35% lower than the comparable national brand, and the company makes a higher margin. The private label business has grown to about 65% unit share in some categories, and the company sees continued opportunities to expand penetration and improve value for members. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. BJ's Wholesale Club Holdings (BJ) is back in focus after reporting second quarter results that exceeded analyst expectations, raising full year adjusted earnings guidance and highlighting record membership momentum for the warehouse retailer. See our latest analysis for BJ's Wholesale Club Holdings. BJ's Wholesale Club Holdings shares have eased in the short term, with a 7 day share price return of 2.38% and a 30 day return of 1.13% lower, despite a 90 day gain of 5.38% and a 3 year total shareholder return of 40.16% that sits well above the 14% decline over the past year. Recent quarterly beats, updated earnings guidance, new club openings such as the planned Tyler, Texas site, ongoing share repurchases and an executive transition all help explain why sentiment has shifted more positively over the past few months, even as longer term total shareholder returns remain mixed. If BJ's recent results have you thinking more broadly about where growth could come from next, this could be a useful moment to broaden your search into 21 top founder-led companies BJ's Wholesale Club Holdings is back near recent highs after a strong quarter and higher guidance, even though the 1 year return is still down. Is it worth paying up now, or does patience on price make more sense? BJ's Wholesale Club Holdings closed at $91.30, compared with a widely followed fair value narrative of $101.10, which frames the recent share price pullback in a different light. Read the complete narrative. Want to see how this membership engine links to that fair value target? The narrative leans on steady growth, modest margin pressure and a higher future earnings multiple. Result: Fair Value of $101.10 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, BJ's Wholesale Club Holdings still faces pressure from weaker general merchandise trends and potential long term margin strain if the costs of new clubs and price competition remain intense. Find out about the key risks to this BJ's Wholesale Club Holdings narrative. The narrative fair value for BJ's Wholesale Club Holdings at $101.10 suggests the stock looks undervalued. Our DCF model tells a different story. On those cash flow assumptions, an estimate of $83.63 per share points to the stock trading at a premium instead. Which set of assumptions feels more realistic to you? Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BJ's Wholesale Club Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Given the mix of optimism and caution around BJ's Wholesale Club Holdings, it makes sense to check the underlying data yourself and move promptly. To see both sides of that picture, review the 1 key reward and 1 important warning sign. If BJ's progress has sharpened your focus, do not stop here. The right mix of quality, resilience and yield in other stocks could reshape your portfolio. Spot potential value opportunities before the crowd by scanning 50 high quality undervalued stocks that combine solid fundamentals with room for the story to develop. Strengthen your income stream by reviewing 12 dividend fortresses that offer higher yields with a focus on stability. Sleep easier at night by concentrating on 78 resilient stocks with low risk scores that score well on resilience and financial risk. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BJ. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]