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11/22/2021

Own brand sales lead to strong Q3 for BJ's

BJ's Wholesale Club reported increased sales across the board in Q3 of 2021 due to strong own brand sales and record membership renewal rates.
Zachary Russell
Associate Editor
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BJ’s Wholesale Club released its Q3 results from 2021 last week, showing increased sales across the board, partially due to private label sales. The results are from the period ended Oct. 30, and now BJ’s enters the holiday season where own brand Thanksgiving items and exclusive Christmas toys are among the club’s main offerings.

Headquartered in Westborough, Mass., BJ's Wholesale Club currently operates 222 clubs and 152 BJ's Gas locations in 17 states.

"We are proud of delivering another strong quarter," said Bob Eddy, President and CEO, BJ’s Wholesale Club. "Our business accelerated during Q3 on broad based strength, and we saw growth in all of our divisions, with acceleration in traffic and ticket, growth in digitally-enabled sales and conventional sales, all underpinned by strong membership statistics in both new and tenured members. Our growth flywheel is spinning faster than it has in a long time, and we look forward to continuing building on that momentum."

Own brands grew to 23% of merchandise sales, driven by better sales of grocery and sundries products and partially due to better in-stock rates on own brand items.

“We will continue to focus on furthering our own brands portfolio over the long term,” said Eddy, "which we believe will strengthen member loyalty, increase value and improve our margins.”

BJ's own brands grew to 23% of merchandise sales for the third quarter of 2021.

Total comparable sales increased by 13.1%, reflecting two-year stacked comp of 27.2%. Comparable club sales, excluding gasoline sales, increased by 5.7%, reflecting two-year stacked comp of 24.2%. Digitally-enabled sales growth was 44%, reflecting two-year stacked comp growth of 244%. Earnings per diluted share of $0.92 reflects a 4.5% year-over-year increase. Net cash provided by operating activities was $173.9 million and free cash flow was $99.2 million.

Total comparable club sales increased by 13.1% in the third quarter of fiscal 2021 compared to the third quarter of fiscal 2020. Excluding the impact of gasoline sales, comparable club sales increased by 5.7% in the third quarter of fiscal 2021 compared to the third quarter of fiscal 2020.

Gross profit increased to $791.2 million in the third quarter of fiscal 2021 from $743.3 million in the third quarter of fiscal 2020. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 20 basis points over the third quarter of fiscal 2020. Merchandise margins benefited from the mix of general merchandise sales, improved private label penetration and continued execution of category profitability improvement initiatives, which were partially offset by increased freight costs and price investments in inflationary categories.

"This growth was primarily driven by record renewals," Eddy said. "We continue to believe that we are on track to deliver all time high renewal rates in both first year and tenured members for the year. We expect to open five new clubs this year," Eddy said. "We will enter the Pittsburgh market in December and open in January in Port Charlotte, Fla., Lansing, Mich., and on Long Island... And we have 10 more new clubs on tap for 2022."