BJ's Wholesale Club Posts Mixed Q1, Reaffirms FY23 Outlook

BJ's Wholesale Club Holdings Inc BJ reported a Q1 2023 revenue growth of 5.0% Y/Y to $4.72 billion, missing the consensus of $4.80 billion.
Total comparable club sales increased by 2.0% Y/Y. Comparable club sales, excluding gasoline sales, increased by 5.7% Y/Y.
Membership fee income increased by 6.1% Y/Y to $102.5 million. Digitally enabled comparable sales growth was 19.0% Y/Y.
Gross profit rose to $880.0 million from $790.6 million a year ago. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 100 basis points Y/Y.
Operating income rose 24.3% Y/Y to $186.8 million. Adjusted EBITDA of $257.0 million increased 16.4% Y/Y.
Adjusted EPS of $0.85 was in line with the consensus.
BJ's Wholesale Club held $23.4 million in cash and equivalents as of Apr 29, 2023.
Operating cash flow totaled $119.1 million in the quarter.
Repurchase: BJ repurchased shares worth $15.3 million in the quarter.
"Our fiscal 2023 outlook on our business remains unchanged given the sustained strength in our grocery business and our gains in market share," said CFO Laura Felice.
FY23 Outlook Reiterated: BJ's Wholesale expects FY23 EPS to remain approximately flat, including the 53rd-week benefit of low-teens cents per share.
BJ expects FY23 comparable club sales growth, excluding the impact of gasoline sales, to be in the 4%-5% range.
BJ sees membership fee income to increase 5% - 6% Y/Y. BJ expects merchandise margin to improve 40 basis points.
Price Action: BJ shares are trading lower by 1.57% at $68.51 premarket on the last check Tuesday.

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