BJ's Wholesale Club Navigates Challenges: Q1 Earnings Beat Estimates Amid Mixed Financial Metrics

BJ’s Wholesale Club Holdings, Inc. BJ reported first-quarter FY24 revenue growth of 4.1% year-on-year to $4.918 billion, beating the analyst consensus estimate of $4.831 billion.

Total comparable club sales increased by 1.6%. Comparable club sales, excluding gasoline sales, increased by 0.6%.

Membership fee income increased by 8.6% to $111.4 million. Digitally enabled comparable sales climbed 21% Y/Y.

Gross profit rose 0.4% Y/Y to $883.4 million. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased by 50 basis points Y/Y.

Operating income for the quarter dropped 13.9% to $160.7 million. Adjusted EBITDA of $236.4 million decreased 6% Y/Y.

BJ’s Wholesale Club held $35.1 million in cash and equivalents as of May 4. Operating cash flow for three months totaled $200.8 million.

Adjusted EPS of $0.85 beat the analyst consensus estimate of $0.83.

Under its existing share repurchase program, the company repurchased 405,110 shares of common stock, totaling $30.2 million in the first quarter.

“During the first quarter, we delivered strong increases in membership, traffic and unit volumes. This resulted in revenue growth and market share gains in our clubs and at our gas stations,” said Chairman and CEO Bob Eddy.

Outlook Reaffirmed: BJ’s Wholesale expects FY24 EPS of $3.75-$4.00 versus the consensus of $3.92. 

BJ expects FY24 comparable club sales growth, excluding the impact of gasoline sales, to grow 1% – 2% Y/Y.

The company expects merchandise gross margins to improve by 20 basis points year-over-year and a capital expenditure of about $500 million.

Price Action: BJ shares traded higher by 0.41% at $80.81 premarket at last check Thursday.