BJ's Wholesale Club has recently showcased remarkable performance in its fiscal second quarter, surpassing analyst expectations. In its report, the company announced adjusted earnings of $1.09 per share for the quarter ending August 3, which is a significant increase from the $0.99 recorded in the same quarter last year.
This figure not only beats the Capital IQ consensus estimate of $1.01 but also signals the strength of BJ's operational strategies. In addition to strong earnings, BJ's overall revenue climbed by 4.9% year-over-year, reaching $5.21 billion, outpacing the analyst forecast of $5.15 billion. CEO Bob Eddy emphasized the quarter's success in his statement, attributing it to robust membership growth, an uptick in customer traffic, and a rapidly expanding digital presence.
Notably, he mentioned that this quarter marks the tenth consecutive period of traffic growth for the company. The company's comparable club sales, excluding gasoline, increased by 2.4%, surpassing the projected 1.3% growth defined by analysts. CFO Laura Felice also provided insights during the earnings call, noting that general merchandise and services saw a slight uptick in comparable sales, with merchandise performing particularly well. BJ's generated a membership fee income of $113.1 million, representing a considerable 9.1% boost compared to the previous year.
This growth was fueled by effective membership acquisition and retention strategies throughout the club's locations. Moreover, the merchandise gross margin, excluding gasoline sales and membership fees, improved by 10 basis points year-on-year due to enhanced inventory cost management. Looking ahead to fiscal 2024, BJ's has reaffirmed its adjusted earnings per share (EPS) guidance at between $3.75 to $4.00, although Felice indicated that their long-term investments might steer the earnings closer to the lower end of this range.
Analysts currently anticipate a normalized EPS of $3.94. Following the report, BJ's stock experienced a decline of 6% during Thursday trading sessions. The guidance for comparable club sales growth remains between 1% to 2% for the fiscal year, with continued optimism about traffic and unit expansion alongside a robust perishables segment that could push sales towards the higher end of the forecasted range.
Regarding merchandise gross margin rates, BJ's anticipates them to remain flat year-over-year, a shift from previous expectations of around a 20 basis point improvement. As BJ's navigates the ongoing landscape of retail amid fluctuating economic conditions, the company appears well-positioned to continue leveraging its membership base and strategic investments to sustain growth..