BJ's outlines $4.20–$4.35 EPS guidance and plans for 8 new club openings while expanding digital growth

Earnings Call Insights: BJ's Wholesale Club Holdings, Inc. (BJ) Q2 2025

MANAGEMENT VIEW

* Robert W. Eddy, CEO, highlighted "solid results in Q2" with 2.3% comparable club sales growth excluding gas, marking the 14th consecutive quarter of traffic growth and the 11th quarter of market share gains. He announced reaching the 8 million member milestone, representing a "55% growth in our membership base since our IPO 7 years ago." Digital business grew "34% during the quarter." Eddy stated, "Our Perishables Grocery and Sundries division led our Q2 performance with healthy 3% comp growth," while the GM and services business declined due to weather and macro factors. He noted, "higher tier membership penetration continued to set records, improving 50 basis points sequentially to an all-time high of 41%." Eddy emphasized continued expansion: "We plan to open 8 more clubs with our club in Warner Robins, Georgia in early September and 7 more clubs in Q4."
* Eddy discussed the impact of tariffs and stated, "we believe prudence is the better part of valor in this constantly changing risky environment," indicating a cautious approach to inventory in tariff-impacted categories.
* Laura L. Felice, CFO, reported, "Net sales in the quarter were approximately $5.3 billion, growing 3.2% over the prior year." Merchandise comp sales increased by 2.3%, and digitally enabled comp sales grew "34% year-over-year." Membership fee income rose "9% to approximately $123.3 million." Felice added, "Our second quarter adjusted EBITDA grew approximately 8% year-over-year to $303.9 million." She noted, "SG&A expenses for the quarter were approximately $786.4 million and deleveraged slightly as a percent of net sales year-over-year."

OUTLOOK

* The company maintained its guidance for full-year comp sales growth, excluding gas, of "2% to 3.5%." Adjusted earnings per share guidance was updated to a range of "$4.20 to $4.35." Felice stated, "It is admittedly challenging to provide guidance as the headlines have been changing rapidly," but affirmed, "we remain confident in the underlying strength of our business."
* Management acknowledged headwinds from tariffs and macro volatility, but indicated "we do not anticipate them impacting us in delivering towards the ranges shared earlier."

FINANCIAL RESULTS

* Net sales were reported at "$5.3 billion, growing 3.2% over the prior year." Merchandise comp sales increased by "2.3% year-over-year and by 4.7% on a 2-year stack." Membership fee income grew to "$123.3 million." Adjusted EBITDA reached "$303.9 million," and adjusted earnings per share were "$1.14," up "4.6% year-over-year."
* Inventory levels were "down about 2% year-over-year and down 6% year-over-year on a per club basis," with in-stock levels improving by "approximately 50 basis points over the same period last year."
* Share buybacks totaled "approximately 375,000 shares for $41.2 million." Remaining buyback authorization at quarter-end was "$953 million."

Q&A

* Peter Sloan Benedict, Baird: Asked about the quarter's cadence and weather impact, and membership trends. Eddy responded, "May was a pretty weak month and June got better as well as July...our inventory is in the best shape it's been in 5 years or so." On membership, Eddy confirmed "very high renewal rates" and that "higher tier...grew at 50 bps this quarter."
* Katharine Amanda McShane, Goldman Sachs: Inquired about consumer behavior across income cohorts. Eddy replied, "you could definitely see behaviors that indicate that they're on the lookout for value," with higher coupon and private label usage. On weather's impact, Eddy noted, "that was about half of the difference between where we thought we would land and where we ended up landing."
* Edward Joseph Kelly, Wells Fargo: Questioned comp guidance range and margin investments. Eddy stated, "We left the range alone really because we still think we'll fall within the range...it's a fairly wide range at this point." Felice indicated, "we will potentially make short-term investments, but that is important for the long-term health of the business."
* Robbie Ohmes, Bank of America: Asked about Fresh 2.0 in meat and seafood. Eddy said, "Early results on meat and seafood are good. But they're early."
* Ryan James Bulger, Gordon Haskett: Sought details on general merchandise outlook. Eddy explained, "We're certainly in a low-margin business, so we need to be careful from an inventory perspective, particularly when prices rise."
* Michael Allen Baker, D.A. Davidson: Asked about inventory caution vs. pursuit of market share. Eddy clarified, "We're being a bit cautious from an inventory perspective, but only in those categories that we think are really discretionary and that have higher tariffs."
* Steven Emanuel Zaccone, Citi: Asked about general merchandise transformation. Eddy said, "We have a ton of opportunity to improve our general merchandise assortment."
* Rupesh Dhinoj Parikh, Oppenheimer: Queried expense sustainability. Felice said, "I don't think there's anything unique in that in the quarter other than...add more clubs in the back half, that will likely put a little bit of incremental pressure on the cost base."
* Mark David Carden, UBS: Asked about gasoline gallons and inventory buying amid tariffs. William C. Werner stated, "our total gas gallons were up about 7%, and that's attributable to both the stations that we've added, our new clubs, as well as some of our existing clubs."

SENTIMENT ANALYSIS

* Analysts repeatedly raised concerns over macro headwinds, weather impacts, comp sales variability, and inventory strategy, reflecting a slightly cautious to neutral tone. Several questions pressed for clarity on inventory caution and margin investment, indicating focus on risk management.
* Management projected confidence in their business model and membership growth, with Eddy stating, "we do so with confidence" and Felice noting, "we remain confident in the underlying strength of our business." However, management adopted a prudent tone regarding guidance, citing volatility and uncertainty, and emphasized a balanced approach.
* Compared to the previous quarter, both analysts and management maintained a similarly careful and measured tone, with ongoing recognition of macro risks but continued optimism in execution and strategy.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for comp sales growth excluding gas remained at "2% to 3.5%" for the full year, unchanged from the prior quarter, but adjusted EPS guidance was raised to "$4.20 to $4.35" from the prior range of "$4.10 to $4.30."
* Membership growth accelerated, with the company reaching "8 million members" versus 7.5 million last quarter, and higher-tier penetration reaching "41%."
* Digital sales momentum continued, with similar growth rates to Q1.
* Inventory management became more conservative, particularly in discretionary and tariff-sensitive categories, compared to the previous quarter.
* Analysts maintained focus on consumer behavior, inventory management, and the impact of tariffs, while management's tone remained cautious yet confident in operational execution.

RISKS AND CONCERNS

* Management cited macroeconomic uncertainty, weather impacts, and tariff volatility as ongoing challenges.
* Inventory caution in discretionary and tariff-exposed categories is a response to uncertain consumer demand and cost structure.
* Analysts questioned the sustainability of expense control and the impact of incremental cost pressures from new club openings.
* Management's mitigation strategies include dynamic sourcing, prudent inventory buys, and focusing investments on core value propositions and digital convenience.

FINAL TAKEAWAY

BJ's management underscored solid membership growth, strong digital adoption, and prudent inventory management despite a dynamic macro environment. The company reaffirmed its comp sales growth guidance excluding gas at 2% to 3.5% and updated its adjusted EPS guidance to $4.20 to $4.35 for the year. Leadership emphasized continued market share gains, robust expansion plans with eight more club openings ahead, and a disciplined approach to risk and investment in value for members, positioning the company to sustain its growth trajectory through ongoing volatility.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/bj/earnings/transcripts]

MORE ON BJ’S WHOLESALE CLUB

* BJ's Wholesale Club Holdings, Inc. (BJ) Q2 2025 Earnings Conference Call Transcript [https://seekingalpha.com/article/4816147-bjs-wholesale-club-holdings-inc-bj-q2-2025-earnings-conference-call-transcript]
* BJ's Wholesale Club Holdings, Inc. 2025 Q2 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4816142-bjs-wholesale-club-holdings-inc-2025-q2-results-earnings-call-presentation]
* BJ's Wholesale Club: Weak Results Are Here, Stock Yet To Respond [https://seekingalpha.com/article/4816124-bjs-wholesale-club-weak-results-are-here-stock-yet-to-respond]
* BJ's Wholesale Club says it is on solid footing for the back half of the year [https://seekingalpha.com/news/4488261-bjs-wholesale-club-says-it-is-on-solid-footing-for-the-back-half-of-the-year]
* BJ’s Wholesale Club reports mixed Q2 results; updates FY25 outlook [https://seekingalpha.com/news/4488260-bjs-wholesale-club-reports-mixed-q2-results-updates-fy25-outlook]