BJ's Wholesale Club NYSE: BJ reported second-quarter fiscal 2026 results that exceeded its expectations, supported by sales growth, membership gains, accelerating traffic and stronger-than-planned fuel profits. The warehouse retailer maintained its full-year comparable-sales outlook while raising its adjusted earnings-per-share forecast.
Net sales rose 15.9% year over year to $6.1 billion, while total comparable club sales increased 11.9%. Excluding gasoline, merchandise comparable sales grew 3.1%, driven by a roughly even contribution from traffic and basket size, according to Chief Financial Officer Laura Felice. Inflation was close to 1% during the period.
Chairman and Chief Executive Officer Bob Eddy said the company recorded its 18th consecutive quarter of traffic growth and its 15th consecutive quarter of market-share gains. On a two-year stacked basis, merchandise comparable sales increased 5.4%.
Category Results and Fuel Strength
The perishables, grocery and sundries division posted a 2.8% comparable-sales increase, led by grocery. Eddy cited strength in beverages and active nutrition, which he attributed in part to assortment changes made through the company’s category management process.
General merchandise and services comparable sales increased 5.3%, with consumer electronics continuing to lead the division and home also contributing. Eddy said the company has been renovating its assortment in home categories including housewares, textiles and refrigeration. Seasonal merchandise was also positive during the quarter, he said.
Fuel was a significant contributor to results. Comparable fuel gallons increased 10.5%, while industry data indicated that overall comparable fuel gallons declined about 5% during the period, Felice said. Eddy said elevated gasoline prices and the company’s value proposition at the pump helped attract members, while favorable movement from peak gasoline prices helped fuel profit dollars exceed plan.
Bill Werner, executive vice president of strategy and development, said BJ’s has used gasoline offers as part of its membership-acquisition efforts. He noted that the company has expanded its gas-station base by 50% since its initial public offering and has more than 2 million members participating in its co-branded credit-card program, which provides per-gallon discounts.
Membership and Digital Engagement
Membership fee income increased 9.9% to $136 million as BJ’s reached 8.5 million members. Eddy said the company added more than 1 million members over the past two years and more than 3 million since its IPO.
During the question-and-answer session, Eddy said higher-tier memberships represented about 43% of the membership base, an all-time high for the company. He also said BJ’s experienced strong acquisition and renewal trends and saw membership growth of 2% to 3% in comparable clubs during the quarter.
However, Felice said the company continues to expect membership fee income growth to moderate through the year as the effect of last year’s membership-fee increase normalizes. Eddy said the company expects the growth rate to exit the year at about 6%.
Digitally enabled comparable sales increased 30% during the quarter, bringing two-year stacked growth to 64%. Eddy said members who use the company’s digital services—including buy online, pickup in club, same-day delivery, ExpressPay and digital coupons—tend to spend more, visit more frequently and renew at higher rates over time.
The company’s AI-powered shopping assistant, Bev, has conducted more than 100,000 member conversations, Eddy said. The assistant helps members find products, check club hours and navigate membership-related questions.
Margins, Cash Flow and Capital Allocation
Gross profit increased 10.3% to $1.11 billion. Merchandise gross margin declined approximately 20 basis points from a year earlier as BJ’s continued to invest in pricing, partially offset by tariff refunds and other sourcing initiatives.
Eddy said the company expects to continue funding member price investments through a mix of sources, including supplier discussions, assortment changes, retail-media opportunities and fuel outperformance. He said BJ’s is focused on growing margin dollars rather than targeting a particular margin rate.
Selling, general and administrative expense totaled $851 million and improved as a percentage of net sales. The increase in dollar terms was primarily tied to labor, occupancy and depreciation costs associated with new clubs and gas stations, Felice said. The company also recorded an approximately $11 million gain from a sale-leaseback transaction involving its new ambient distribution center in Ohio.
Adjusted EBITDA rose 14.3% to $347 million, while adjusted EPS increased 19.3% to $1.36. Adjusted free cash flow was $266 million, compared with $87 million in the prior-year quarter. BJ’s ended the period with net leverage of 0.5 turns, repurchased $124 million of shares during the quarter and had about $422 million remaining under its repurchase authorization.
Expansion Plans and Outlook
BJ’s opened three Texas clubs during the second quarter—in Waxahachie, Fort Worth and Grand Prairie—bringing its Texas total to four, and added a gas station in Edison, New Jersey. The company plans seven additional club openings and one relocation over the remainder of the year and continues to target 25 to 30 new clubs every two years.
Werner said Texas membership is tracking more than 30% ahead of plan, while all four Texas gas stations rank in the top 30% of the chain by gallon volume. Two rank in the top 10%, he said. The company also announced a future club in Tyler, Texas.
BJ’s said it expects newly opened clubs to build membership and sales over their first several years, with locations generally maturing toward their potential within three to five years. Eddy said the company is considering opportunities to expand its new-club pace beyond its current target, though its pipeline for the next roughly two years is largely established.
For fiscal 2026, BJ’s maintained its outlook for comparable club sales growth, excluding gasoline, of 2% to 3%. The company raised its adjusted EPS outlook to a range of $4.60 to $4.80, with Felice citing second-quarter gas-business outperformance as the primary reason for the increase.
About BJ's Wholesale Club (NYSE:BJ)
BJ's Wholesale Club, headquartered in Westborough, Massachusetts, is a membership-based warehouse retailer offering a wide range of products and services primarily to small businesses and individual consumers. The company operates large-format clubs that provide value-priced groceries, health and beauty products, electronics, home goods, furniture, seasonal items and automotive supplies. In addition to its in-club offerings, BJ's features fuel stations at many locations and operates an e-commerce platform for online ordering and home delivery.
Founded in 1984 as a division of Zayre Corp., BJ's Wholesale Club quickly expanded throughout the Northeastern United States.
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