First quarter same store sales at BJ’s Wholesale Club surged 27%, digitally enabled sales increased 350% and membership spiked as the warehouse club retailer attracted new customers.
The 27% comp increase excludes the impact of fuel price deflation which, if included, drops the increase to a still robust 19.9%. BJ’s reporting period ended May 2 so its results capture the bulk of the COVID-19 related pantry loading that took place during March and then began to decelerate during April. Unlike some other retailers, BJ’s did not elaborate on the cadence of sales during its first quarter in its earnings press release and also declined to share an outlook for its second quarter performance.
That said, BJ’s could be in for continued sales growth as COVID-19 had a major impact on new member acquisition and e-commerce utilization. As shoppers sought sources of food and consumables inventory in March and April, it seems many turned to BJ’s and became new members and also opted to shop online. The operator of 218 warehouse clubs said its membership fee income increased 8.4% to $79.6 million and digitally-enabled sales increased 350%.
The surge in new members helped BJ’s drive an overall increase in profitability, no matter how it sliced the numbers. For example, income from continuing operations increased by 165.3% to $95.7 million, adjusted EBITDA increased by 56.3% $193.9 million and earnings per share increased 176% to 69 cents..
"While the coronavirus pandemic increased demand for our services, our team's hard work and the capabilities we have built over the last four years have enabled us to thrive and deliver very strong merchandise comparable sales,” said Lee Delaney, BJ’s president and CEO. “Furthermore, we drove earnings and cash flow growth and invested in our team members and our business. These efforts will allow us to continue to build on this momentum and position ourselves for success over the long-term."
All those new members who flocked to BJ’s during the first quarter should help with long-term performance too, as long as renewal rates remain solid.