BJ's Wholesale Revenues Rise as Premium Members Hit Record

BJ's Wholesale Club (NYSE:BJ) reported its fiscal 2025 first-quarter results on May 22, with net sales up 4.7% to $5 billion, comparable sales (excluding gas) up 3.9%, and adjusted earnings per share (EPS) of $1.14. Operating income increased 27% and net income rose 35% year over year.

Premium Membership Expansion Reaches Historic Milestone

During the 13-week period ending May 3, the warehouse club's share of higher-tier memberships grew by more than 100 basis points sequentially to surpass 40% for the first time, boosted by recent product and benefit enhancements; a January fee increase did not dampen uptake. Investments in credit card rewards, gas discounts, and digital convenience played pivotal roles in broadening appeal to value-oriented consumers.

"In the first quarter, higher tier membership penetration grew by over 100 basis points sequentially from the fourth quarter, surpassing 40% for the first time in our history."
-- Bob Eddy, Chairman and Chief Executive Officer

This shift to premium membership tiers increases customers' lifetime value, improves renewal rates, and raises average spend, fundamentally strengthening the company's long-term recurring revenue streams and retention.

Digitally Enabled Sales Drive Structural Engagement Gains

Digitally enabled comparable sales soared 35%, contributing materially to total sales growth, and have maintained double-digit percentage growth for four consecutive years. Enhanced fulfillment technology that leverages AI and robotics for inventory and pick optimization cut order picking time by over 45%.

"In the first quarter, digitally enabled comp sales grew by 35% year over year and 56% on a two-year stack. ... This has enabled us to reduce the time required to pick an item by over 45%."
-- Bob Eddy, Chairman and Chief Executive Officer

Digital adoption engenders higher spending and satisfaction.

Fast-Tracked Expansion and Real Estate Optimization

Five new clubs and four gas stations opened during the quarter, including entry to Staten Island, with a robust pipeline targeting 25 to 30 new clubs over the next two years, and relocation projects in multiple states underway. Fiscal first-quarter volume gains included a 2% increase in comparable gas gallons while broader U.S. industry volumes declined year over year.

"In the past several years, we've updated our clubs with the latest sign packages, and invested to support our key growth initiatives, including digital and Fresh 2.0. We're also looking to identify relocation opportunities to better position our fleet for tomorrow."
-- Bob Eddy, Chairman and Chief Executive Officer

Aggressive club expansion and proactive relocations to better-positioned sites are associated with market share gains, and they leverage established new club success, intensifying the top-line opportunity within the BJ’s ecosystem.

Looking Ahead

Management reaffirmed its fiscal 2025 guidance for comparable sales growth (excluding gas) of 2% to 3.5% and adjusted EPS of $4.10 to $4.30, noting that it was exercising caution in its forecast due to the wide range of potential macroeconomic conditions. It expects the first half of fiscal 2025 to be the strongest for same-store sales comps, and will prioritize margin discipline amidst its ongoing investments in value and growth. The chain has 25 to 30 club openings and relocations planned over the next two years, and reported capital expenditures of about $140.5 million for fiscal Q1.

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