The first quarter at BJ’s Wholesale Club brought earnings and comparable store sales growth along with better results from home-related merchandise.
Analysts polled by Yahoo Finance expected, on average, earnings per adjusted diluted sales of 83 cents and revenue of $4.83 billion.
With the impact of gasoline price volatility excluded, comparable sales increased by 0.6% in the first quarter year over year due primarily to strong traffic and unit growth, BJ’s stated.
Net sales were $4.81 billion and revenue, including membership fees, was $4.92 billion, versus $4.62 billion and $4.72 billion, respectively, in the year-previous quarter. Operating income is $160.8 million versus $186.8 billion in the year-before period.
In a conference call, BJ’s chairman and CEO Bob Eddy said that the general merchandising operation “delivered a slightly negative comp in the first quarter, as a handful of weather-sensitive categories weighed on the overall division. We saw about a one-point variance in GM comp performance across markets that experienced better weather versus markets with cooler and wetter weather compared to the prior year. Consumers remain discerning in their purchasing, and we have also found that members are increasingly waiting to shop higher ticket categories, such as patio sets and air conditioners, exactly when the weather turns. When presented with great quality and value, members are spending. General merchandise is critical to our model, and we continue to make outstanding progress in our transformation efforts. We are intensely focused on delivering a new and exciting assortment that is presented and marketed in the right way at the right time and at the right price.
Categories that generated general merchandise growth in last year’s fourth quarter, apparel and electronics, continued to perform well in the first quarter. However, Eddy added that the home has picked up steam.
“We’re especially pleased with the performance of our home categories, which turned positive for the first time in a long time, with the segment comping nearly seven percent in the first quarter.”
Home textiles were particularly strong, but BJ’s has been placing more emphasis on kitchen and cleaning appliances with trend-right items in higher growth categories to drive higher member demand. He said members who purchase general merchandise exhibit trip and spend behaviors that strongly correlate to membership renewal. Strengthening the treasure hunt aspect of the shopping experience is a long-term opportunity for BJ’s, Eddy said.
In announcing the financial results, Eddy said, “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. Our merchandising improvements and digital conveniences, grounded in delivering compelling value, are resonating with our members. We are also growing our footprint and remain on track for 12 new club openings this year.’”
