BJ’s Seeing ‘Little Bit of a Pullback’ Among Lower-Income Members: CEO

BJ’s Wholesale Club generated 22.4% net sales growth to $5.01 billion in fiscal Q2 ended July 30 -- “strong results in a marketplace influenced by inflation, waning government stimulus and high gas prices,” said CEO Bob Eddy on a Thursday earnings call. Comparable sales in the quarter were up 7.6%, excluding gas, “driven by significant gains in traffic and market share,” he said. The stock closed 7.2% higher Thursday at $74.09.

The current inflationary trend “continues to influence purchasing behavior,” said Eddy. Nevertheless, during fiscal Q2, “we were pleased to see year-over-year and sequential spend per member growth across all of our income cohorts,” he said.

Among BJ’s members at “the lower end of the economic spectrum, we're seeing a little bit of a pullback” amid the inflationary trends, said Eddy. Their traffic is “fine,” and that’s “really what we're after,” he said. The top “predictor” of membership renewal is frequency in shopping, “and those folks are shopping us in nice ways,” he said.

The rest of the "cohorts" are all "shopping us more often, buying more when they're with us,” said Eddy. “I would expect this to continue, where you see the lower-end consumer react to having less dollars in their pocket. I would expect the higher-end consumers to continue to search for value as well.”

BJ’s is generating “robust growth” across its digital channels, “anchored” by its buy online pickup in store and curbside pickup options, said Eddy. Through the COVID-19 pandemic, “our members have significantly altered the way they engage with us,” with more than shopping BJ’s digitally, double the rate of its online shopping pre-pandemic, he said. “This is important because digitally engaged members typically have higher average baskets and shop with us more frequently, which increases the likelihood for membership renewal.”