BJ’s Wholesale Club (NYSE:BJ) reported a solid start to fiscal 2026, with management pointing to membership gains, higher fuel volumes, digital adoption and new club openings as key drivers of first-quarter performance.
Chairman and Chief Executive Officer Bob Eddy said the retailer’s results were “enabled by doing what we do best, serving our members with value.” He said membership remained a key strength, supported by acquisition, retention and growth in higher-tier memberships, while the gas business reinforced the company’s value proposition during a period of sharply higher fuel prices.
Membership Fee Income Hits Record Level
Membership fee income increased approximately 10% from the prior year to about $132 million, reaching an all-time high. Eddy said the increase reflected strength in new member acquisition, retention and higher-tier penetration across both new and existing clubs.
“What matters most to us is not just growing the number of members, but continuing to improve the quality of the membership base over time,” Eddy said. He added that higher-tier members shop more frequently, are more engaged and generate greater lifetime value.
Management said membership fee income growth is expected to moderate as the year progresses because the company will begin lapping a prior-year fee increase. However, Felice said the underlying health of the membership base remains strong.
Gas Business Gains Share as Prices Rise
BJ’s gas business was a major focus of the quarter. Eddy said retail gas prices rose nearly 50% from the start of the quarter to the end of the period, putting additional pressure on household budgets. In response, members visited BJ’s gas stations in record numbers, with comparable gallon growth moving from about 1% in February to more than 10% in both March and April.
Felice said comparable fuel gallons increased nearly 8% for the quarter, reflecting continued market share gains. Eddy noted that same-store gallons in the broader market were down roughly 4% during the period.
Fuel profit dollars were largely in line with company expectations, though margins were pressured early in the quarter as prices rose quickly. Eddy said BJ’s saw some behavioral shifts, including slightly lower average gallons per fill-up as consumers managed higher costs or topped off tanks more frequently.
In the question-and-answer session, Eddy said the company did not see a meaningful increase in the percentage of gas trips converting into club visits, despite heavier gas traffic. Executive Vice President of Strategy and Development Bill Werner added that BJ’s has expanded its gas station count to 205 locations, up from about 135 at the time of its initial public offering, increasing coverage to about 77% of clubs.
Price Investments Weigh on Merchandise Margin
BJ’s said it invested in value during the quarter by returning tariff refunds to members through pricing. Eddy said the move resulted in roughly 0.5 point of deflation in retail pricing and improved the company’s price gaps.
Merchandise gross margin declined approximately 10 basis points year-over-year. Felice said the decrease was primarily due to price investments, partly offset by tariff refund benefits. Excluding tariff refund benefits, merchandise margins were down 60 basis points year-over-year.
During the Q&A portion, Felice said the tariff benefit was about 50 basis points on merchandise margin, closer to $20 million than the $30 million suggested by an analyst. She also said some additional tariff dollars are expected to flow into the second quarter, though the tariff environment remains fluid.
Eddy said BJ’s will continue to use available sources of gains to invest in member value. He said the company’s focus is to “play offense,” particularly because consumers remain pressured.
Category Performance Mixed but Core Business Holds Up
Felice said grocery, perishables and sundries comps rose 0.7%, with grocery benefiting from the importance of the weekly shopping trip. Eddy said Fresh 2.0 initiatives are showing results, including strong unit growth in fresh fruit. He added that perishables were affected by egg deflation during the quarter.
General merchandise and services delivered 7.1% comparable sales growth, driven primarily by consumer electronics. Eddy said home and seasonal categories were positive, while apparel was slightly negative. He said the company is working to improve consistency in general merchandise by refining assortments, improving value and bringing in more relevant products.
Eddy also discussed the appointment of Stephanie Reibling as chief merchandising officer. He said her priorities include strengthening the merchandising team, sharpening the assortment and moving parts of the assortment “upmarket” within a good-better-best framework.
Management also pointed to continued pressure on lower-income households. Eddy said most of the company’s comparable sales growth in the quarter came from higher-income members, while lower-income consumers showed more value-seeking behavior.
Expansion Continues, Led by Texas Openings
BJ’s opened its first Texas club during the quarter and followed with three additional Texas openings in May. Eddy said the company now has about 100,000 members in the Dallas-Fort Worth market, with membership in its four Texas clubs running 33% ahead of plan.
Werner said the Texas openings were among the strongest in the company’s history, citing member response, engagement in gas and club shopping, and high ExpressPay adoption.
The company plans to open 12 clubs this year and expects to deliver 26 clubs against its previously stated two-year plan of 25 to 30 openings. BJ’s also announced planned clubs in Frankfort, Kentucky; Ocala, Lecanto and Port St. Lucie, Florida; and Portage, Indiana.
Felice said adjusted EBITDA increased approximately 4% year-over-year to $298 million. Adjusted earnings per share were $1.10, down from the prior year as the company lapped a tax benefit related to stock-based compensation.
BJ’s repurchased approximately $207 million of shares during the quarter and ended the period with about $545 million remaining under its current authorization. The company maintained its full-year guidance, continuing to expect comparable club sales excluding gasoline to grow 2% to 3% and adjusted earnings per share of $4.40 to $4.60.
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.
