BJ's Wholesale Beats Q2 Estimates, Raises FY2026 Guidance as Gas Station Traffic Surges

BJ's Wholesale Club Holdings, Inc. reported fiscal 2026 second-quarter results Friday that topped Wall Street estimates for revenue and adjusted EPS. The retailer also raised its full-year adjusted EPS guidance. Shares rose following the report.

Total revenue increased 15.7% year-over-year to $6.227 billion, exceeding analyst expectations of $5.957 billion. GAAP diluted EPS rose to $1.36 from $1.14 in the prior-year period. Adjusted diluted EPS also increased 19.3% to $1.36, beating analyst estimates of $1.17.

Sales, Membership, and Digital Growth

Net sales grew 15.9% to $6.091 billion. Operating income rose 16.5% to $252.4 million, and net income increased 15.4% to $173.9 million. Adjusted EBITDA grew 14.3% to $347.2 million.

Comparable club sales rose 11.9%. Excluding gasoline, comparable sales increased 3.1%.

Membership fee income rose 9.9% to $135.6 million, driven by member acquisition, retention, and higher penetration of premium memberships. Total membership reached a record 8.5 million.

Digitally enabled comparable sales jumped 30%, and grew 64% on a two-year stacked basis.

BJ's opened three clubs and one gas station in Texas during the quarter. The company ended the period with 267 clubs and 206 gas stations across 22 states.

Gross Margin and Operating Costs

Gross profit increased to $1.11 billion from $1.01 billion in the prior-year period.

Merchandise gross margin, excluding gasoline sales and membership fee income, declined approximately 20 basis points. Ongoing pricing investments pressured margins, partially offset by tariff refund benefits.

Selling, general, and administrative expenses rose from $786.4 million to $851.2 million. The increase primarily reflected higher labor, rent, and operating costs associated with new club openings.

Increased depreciation from a larger owned club base also pushed costs higher. These increases were partially offset by sale-leaseback gains.

Cash Flow and Share Repurchases

BJ's generated $401.5 million in operating cash flow and $265.5 million in adjusted free cash flow during the quarter.

The company ended the period with $30 million in cash and $629.2 million in total debt. Net debt stood at $599.3 million, or 0.5 times adjusted EBITDA over the past 12 months.

BJ's repurchased approximately 1.38 million shares for $124.1 million during the quarter. Approximately $422.1 million remains under its existing authorization.

BJ's Raises FY2026 EPS Guidance

BJ's raised its fiscal 2026 adjusted EPS guidance to $4.60-$4.80 from $4.40-$4.60. The new range compares to analyst expectations of $4.53.

The company maintained its outlook for comparable club sales growth of 2%-3% excluding gasoline. It also continues to expect approximately $800 million in capital expenditures.

BJ's expects to open 25 to 30 clubs in fiscal 2027 and 2028.

Management Highlights Gas Stations, Tariffs, and Texas Growth

During the earnings call, BJ's said shoppers are increasingly turning to its gas stations as elevated fuel prices highlight the appeal of its discounts.

Comparable fuel gallons jumped 10.5% in the quarter, while industry data showed an overall decline of approximately 5%. Management noted members have "flocked" to its pumps, and that gasoline discount membership offers received an "overwhelming" response.

Strong volumes and favorable market conditions drove fuel profits above plan, helping push company results ahead of expectations.

Expectations for the second half remain largely unchanged. BJ's said tariff refunds that helped fund pricing investments in the first half are largely exhausted.

However, supplier rebates, merchandise mix adjustments, retail media, and gasoline profits should provide alternative funding for continued member investments.

Management expects membership fee income growth to moderate to 6% by year-end as prior fee increases will no longer produce year-over-year benefits.

Texas membership growth is running more than 30% above plan. Meanwhile, BJ's plans to reduce its SKU count by approximately 20% over the next few years.

BJ's Stock Performance

As of Friday's publication, BJ's Wholesale shares were up 3.59% at $94.58.