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May 21, 2020

BJ's Gains Share With 20%+ Q1 Sales Surge

SN: "BJ’s Wholesale Club has “gained considerable share” after net and comp sales jumped more than 20% and net income more than doubled in fiscal 2020 Q1, President and CEO Lee Delaney said. For the quarter ended May 2, net sales totaled $3.72B, up 21.1% from $3.07B a year earlier, BJ’s reported Thursday. Membership fee income also rose 8.4% to $79.6M, powered by a 40% YoY gain in members. Overall revenue rose 20.8% to nearly $3.8B. Comparable-club sales climbed 19.9% from a year ago and, excluding fuel, were up 27%. “This pandemic has presented us all with challenges. I am proud of how we managed our business in this new environment and deeply thankful for the contributions of our club and distribution center team members, who have tirelessly served a surge in demand for essential products while embracing new safety conditions and protocols,” Delaney told financial analysts in a conference call on Thursday. “Grocery goods, which represent roughly 85% of our merchandise sales, were in extremely high demand starting in late February and continuing throughout the quarter. Consumers consolidated their trips and bought bigger baskets to satisfy increased consumption-at-home needs,” he explained. “And while needs shifted throughout the quarter from cleaning supplies to pantry loading to perishables, we offered a one-stop destination with industry-leading value from the large sizes consumers need to stock up. These trends were relatively consistent in shape and magnitude across all our geographies. As a result, we believe we have gained considerable share in every region across most categories in which we compete"... The company reported that “digitally enabled” sales swelled 350%. BJ’s offers its own buy-online-pickup-in-club (BOPIC) service and partners with Instacart for same-day home delivery. “Digitally enabled sales grew by more than threefold this quarter and represented 5% of our merchandising comp sales for the quarter, compared to 3% in the fourth quarter and 1.5% in last year's first quarter,” he said. “We believe we have a structural cost advantage as we continue to grow these businesses, especially in our same-day delivery business, which was up more than eightfold over last year’s Q1. We plan to continue to improve upon our existing capabilities and launch new offerings to delight our members and increase the value of their membership. “In the first quarter, we began testing curbside pickup and BOPIC for perishables in select clubs,” he added... Grocery led the way in the quarter with a 33% jump in comp sales. “Perishables, edible grocery and nonedible grocery, all saw comp sales north of 30%. We saw very strong growth rates in all the categories you would expect — paper products, cleaning essentials, fresh meat, frozen, dairy, fresh produce, packaged goods and beverages,” Eddy said. "Our general merchandise and services divisions saw declines of approximately 3%, as sales of apparel decreased and we turned off our services businesses. Our apparel business drove the bulk of that decline. We saw healthy growth in other categories, including TVs and other consumer electronics, small appliances and recreational"... Q1 operating income rose to $143.8M, or 3.8% of total revenue, from $70.7M, or 2.2% of total revenue, a year ago... BJ’s posted net income of $95.7M, or 69 cents per diluted share, vs. $35.8B, or 25 cents per diluted share, in the prior-year period. Adjusted net earnings for the 2020 quarter also were $95.7 million, or 69 cents per diluted share, versus $36.7M, 36 cents per diluted share, a year earlier. Analysts, on average, had projected adjusted EPS of 34 cents, with estimates ranging from a low of 26 cents to a high of 52 cents, according to Refinitiv/Thomson Reuters"...

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