BJ's Q2 Earnings Beat on Traffic & Membership Momentum, Outlook Raised

BJ’s Wholesale Club Holdings, Inc. BJ delivered second-quarter fiscal 2026 results, wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Results reflected accelerating comparable sales, record membership growth and strong fuel performance. Management highlighted continued momentum across strategic priorities, including digital engagement, merchandise improvements and footprint growth. The company also raised its full-year adjusted earnings outlook while maintaining its comparable club sales guidance.

BJ’s Second-Quarter Insights

BJ’s Wholesale reported adjusted earnings of $1.36 per share, which beat the Zacks Consensus Estimate of $1.16 by 17.2%. The bottom line increased 19.3% year over year, supported by strong operating performance and fuel profitability. This operator of membership warehouse clubs generated total revenues of $6,226.6 million, up 15.7% year over year ahead of the Zacks Consensus Estimate of $5,883 million by 3.5%. 

Net sales increased 15.9% to $6,091 million, while membership fee income climbed 9.9% to $135.6 million, supported by strong member acquisition, retention and higher-tier membership penetration across both new and existing clubs. The company reached a record 8.5 million members, highlighting continued engagement with its value-focused warehouse club model. We had expected membership fee income growth of 7%.

Total comparable club sales increased 11.9% year over year during the quarter, while comparable club sales excluding gasoline improved 3.1%, which came ahead of our estimate of 2.5%. The company benefited from balanced traffic and ticket growth, with management noting that traffic accelerated during the reported quarter. BJ’s also marked its 18th consecutive quarter of traffic growth and 15th consecutive quarter of market share gains.

Digitally enabled comparable sales continued to be a key growth driver, rising 30% year over year and reflecting a two-year stacked growth of 64%. The company continued to see strong engagement across digital offerings, including buy online, pick up in club, same-day delivery and ExpressPay. BJ’s also highlighted progress with its AI-powered shopping assistant, Bev, which has helped members find products, check club hours and improve their shopping experience.

Fuel performance also supported quarterly results. Management noted that comparable gasoline gallons increased 10.5%, with BJ’s continuing to gain share as industry fuel volumes declined during the period. Strong volume growth and favorable market conditions helped fuel profit exceed expectations.

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A Look at BJ’s Margins

BJ’s Wholesale reported gross profit of $1.11 billion in the second quarter compared with $1.01 billion in the prior-year period. However, the merchandise gross margin rate, excluding gasoline sales and membership fee income, declined approximately 20 basis points year over year. The decline primarily reflected continued investments in pricing, partly offset by tariff refund benefits recognized during thequarter.

Selling, general and administrative expenses increased to $851.2 million from $786.4 million in the prior-year quarter, mainly due to higher labor, occupancy and operational costs related to new club and gas station openings. Increased depreciation expenses from a larger owned club base also contributed to the rise. These pressures were partly offset by a gain from a sale-leaseback transaction during the quarter.

Operating income increased 16.5% year over year to $252.4 million, while adjusted EBITDA rose 14.3% to $347.2 million.

BJ’s Expansion Strategy Gains Momentum

BJ’s Wholesale Club continued expanding its footprint during the quarter, opening three new clubs in Texas and one new gas station in Edison, NJ. The company ended the reported quarter with 267 clubs and 206 gas stations across 22 states.

Texas remains an important growth market for the company. Management said membership in Texas locations is tracking more than 30% ahead of plan, while customer engagement across categories and gas performance have been strong.

BJ’s expects to open seven additional clubs and complete one relocation during the remainder of fiscal 2026, while remaining committed to its long-term goal of opening 25-30 clubs in two years.

BJ’s Wholesale Financial Snapshot

BJ’s Wholesale Club ended the quarter with cash and cash equivalents of $30 million, while total debt stood at $629.2 million. Stockholders’ equity totaled $2,197.4 million as of Aug. 1, 2026. 

Net cash provided by operating activities was $401.5 million in the reported quarter. Adjusted free cash flow was $265.5 million. Capital expenditures, net of disposals, totaled $177.3 million during the quarter. 

During the second quarter, BJ’s repurchased 1,384,278 shares for $124.1 million, inclusive of associated costs. About $422.1 million remained available under the company’s existing share repurchase authorization at quarter-end.

Here’s What BJ Guided

BJ’s Wholesale maintained its fiscal 2026 comparable club sales outlook, excluding gasoline sales, at 2-3% growth. However, the company raised its adjusted earnings per share guidance range to $4.60-$4.80 from the previous outlook of $4.40-$4.60, reflecting strong second-quarter performance, particularly from its fuel business. Capital expenditures are still expected to be approximately $800 million as BJ’s continues investing in new clubs and distribution capabilities.

Shares of this Zacks Rank #3 (Hold) company have advanced 15.2% over the past three months compared with the industry’s 4% growth.

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