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BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) has reported robust financial results for the second quarter of fiscal 2024, reflecting significant growth in several key areas. The company saw a 4.8% increase in net sales, reaching $5.09 billion compared to $4.86 billion in the same period last year. Total revenues also rose by 4.9% to $5.21 billion. The growth was driven by a 3.1% increase in comparable club sales and a notable 22% rise in digitally enabled comparable sales. The company’s membership fee income also saw a 9.1% year-over-year increase, totaling $113.1 million.

Earnings per diluted share (EPS) for the quarter stood at $1.08, with adjusted EPS slightly higher at $1.09. This represents an 11.3% increase from the previous year’s EPS of $0.97. Gross profit for the quarter improved to $956.6 million from $896.8 million the previous year, driven by better inventory cost management.

However, selling, general, and administrative expenses (SG&A) rose to $750.3 million, up from $695.0 million, primarily due to increased labor and occupancy costs associated with new club and gas station openings.

BJ’s Wholesale Club Reports Better than Expected Q2

BJ’s Wholesale Club’s Q2 performance exceeded market expectations. Analysts had projected an EPS of $1.01 and revenue of $5.15 billion. The company surpassed these estimates with an actual EPS of $1.08 (adj. EPS of $1.09) and revenue of $5.21 billion.

This strong performance was attributed to increased membership, traffic, and unit volumes, as well as a fast-growing digital business. The company’s comparable club sales growth of 3.1% and digitally enabled sales growth of 22% were significant contributors to this outperformance.

Operating income for the quarter also saw a modest increase of 1.7%, reaching $203.7 million, compared to $200.3 million in the same period last year. Adjusted EBITDA rose by 4.9% to $281.3 million, while net income increased by 10.4% to $145.0 million.

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BJ Expects Fiscal 2024 Adj. EPS Between $3.75 and $4.00

BJ’s Wholesale Club remains optimistic about its future performance. Laura Felice, Executive Vice President and Chief Financial Officer, stated that the company expects fiscal 2024 comparable club sales, excluding gasoline sales, to increase by 1% to 2% year-over-year.

The growth is anticipated to be driven by traffic and unit growth, as well as a strong perishables business. The company also expects its fiscal 2024 adjusted EPS to range between $3.75 and $4.00. However, investments aimed at long-term growth may drive EPS towards the lower end of this range.

BJ’s Wholesale Club’s strategic priorities include continued investment in its value proposition to help members stretch their dollars. The company expects its merchandise gross margins to remain approximately flat year-over-year. This stability in gross margins, combined with strategic investments, is expected to support the company’s long-term growth and shareholder value.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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