BJ’s Reports Record Membership Growth
BJ’s Wholesale Club’s Q2 results exceeded Wall Street’s expectations as the company continued to build on its growth from last year.
The company’s net sales improved by 5.6 percent to $4.09 billion, up from $3.87 billion recorded in Q2 2020, when the company had posted an 18.4 percent gain. BJ’s revenue was up by 5.6 percent, reaching $4.18 billion, with membership fee income growing by 7.6 percent to $88.8 million.
The Westborough, MA-based company saw its membership base increase by 3 percent year over year and 14 percent on a two-year basis.
“Our growth this quarter was driven primarily by record renewals. We continue to experience the highest rates of renewal on the largest class of members we have ever attracted. Our first-year renewal rate and on-time renewals are at historic levels,” said BJ’s President and CEO Robert Eddy. “We are intently focused on renewals this year because these renewing members are generally more valuable than an average new member. We’re seeing both more timely renewal and incremental renewal, and we continue to believe that we will finish year with all-time-high, first-year renewal rates.”
Comparable sales, meanwhile, increased by 4 percent year-over-year but were down by 3.4 percent, excluding fuel sales. This compared to increases of 17.2 percent overall and 24.2 percent in the same period in 2020. Overall, the warehouse retailer’s comparable sales were up 21.2 percent over a two-year period and 20.8 percent when excluding fuel, Supermarket News reported.
The company particularly benefitted from significant market share gains in its gas business, which helped drive comparable sales for its business.
“Gallons and comp clubs were up 25 percent this quarter and are increasingly ahead of the market. Since gasoline is likely the best example of a key value item, price lines are on every corner. It’s easy for us to show outstanding value,” Eddy added. “And when we pair the gasoline business with the club, it drives tremendous loyalty. Members who shop us for gas renew at much higher rates, and their gasoline purchases keep BJ’s top of mind for additional shopping trips in the club.”
Looking ahead, the company is eyeing private brand labels as a growth area for its businesses. In Q2, the company’s private-label offerings accounted for 23 percent of merchandise sales, up from 21 percent a year before.
“Our suppliers should note that we will be aggressive in this area in order to maintain great value for our members. Private label remains essential to providing great value to our members to our assortment simplification initiatives and to our category profit improvement efforts,” he said.
Originally published at https://retailbum.com on August 23, 2021.
