BJ’s wholesale club saw double-digit net and comparable sales increase in its third quarter of fiscal 2021, adding to double-digit sales gains resulting from strong consumer demand there. is one year old.
Releasing its quarterly results on Thursday, Westborough, Massachusetts-based BJ’s also announced a same-day delivery partnership with last mile specialist DoorDash.
For the quarter ended Oct. 30, BJ’s said net sales were $ 4.17 billion, up 14.4% from the $ 3.65 billion in fiscal quarter 2020, which marked a 15.7% year-over-year increase.
Including member revenue growth of 7.7% to $ 91.5 million, total revenue increased 14.3% to $ 4.26 billion, compared with a gain of 5.6% to $ 3, $ 73 billion a year earlier. The chain of warehouse clubs said its membership base grew 3% to more than 6 million in the quarter, up 15% over two years.
Inflation in gasoline prices and sales helped increase same-store sales in the third quarter. BJ’s reported a 13.1% increase in comp-club sales, almost matching the 14.1% increase a year ago. Excluding fuel, which saw a 20% jump in gallons sold, comp club sales rose 5.7%, compared to 18.5% growth excluding fuel during the period a year earlier, when gasoline prices were lower. The company said comp-club sales rose 24.2% over two years to the end of the quarter.
“We delivered another exceptional quarter, with results exceeding our expectations in every way,” BJ President and CEO Robert Eddy said Thursday in a conference call with analysts. “Our activity accelerated during the third quarter. The results were balanced across a number of dimensions. We have seen growth across all of our divisions, acceleration in traffic and tickets, and growth in digital and conventional sales, all supported by strong membership statistics among new and full members. And we continue to transform the business as we go.
CFO Laura Felice cited the grocery store as one of the best performing in the category during the quarter.
“Our performance was again led by our grocery business, which had 6% pay for the third quarter and a 25% pay stack over two years,” said Felice. “Despite inventory issues in some food categories and other households, the team performed strongly, demonstrating our continued relevance to our members. “
Private labels also boosted grocery sales during the period, Eddy reported. “We continue to make great strides here, increasing private label penetration by almost 200 basis points to 23% of merchandise sales,” he said. “This increase was due to better sales of grocery and sundries in the quarter, in part due to better inventory rates on private label items. We will continue to focus on expanding our private label portfolio over the long term, which we believe will strengthen member loyalty, increase value and improve our margins. “
E-commerce sales jumped 44% in the third quarter. Including 200% growth in the 2020 quarter, comparable digital sales increased 244% over a two-year stack. Click-and-collect traffic, especially at the curb, was a catalyst in the 2021 quarter, according to Eddy.
“Our digital platforms continue to resonate with members and allow us to provide convenient access to tremendous value every day,” he said. “More than 60% of BOPIC [buy online, pickup in club] orders were delivered to the curb during the last quarter. As we have said in the past, digitally engaged members have higher average baskets and take more trips per year than members who buy club only.
Launch of DoorDash delivery
BJ’s is also strengthening its e-commerce service coverage on the delivery side through a new partnership with DoorDash, which has gradually expanded its presence in the grocery store arena, more recently through agreements with Albertsons Cos., United Natural Foods Inc. and General dollar.
“I am delighted to announce that we have just signed a partnership agreement with DoorDash to augment our existing partnership with Instacart,” said Eddy. “We anticipate that the DoorDash marketplace will be operational in January and that Dashers will make its first deliveries of orders placed through BJ’s.com in the first quarter. [of fiscal 2022]. “
BJ has Instacart delivery offered from all clubs since Spring 2018. But the DoorDash partnership will bring more to BJ when it comes to same-day execution, Eddy said.
“This will be the first step towards a new model where our team members will select all orders from BJ’s.com and a stable of transport partners will make deliveries. This vision should lead to a better experience and value for the member and a better economy for us. The experience for our members will be better as our team members choose with more quality and care, driving better or with precision. More competition also lowers prices on marketplaces, ”he explained.
“In addition, by having more than one [same-day delivery] partner, we can dynamically route deliveries based on a number of variables, such as service levels, speed, member ratings, costs, etc. Eddy added. “Finally, as we will combine same-day delivery order pickup with BOPIC and curbside orders, we will be more efficient in terms of pick-up profitability. We are delighted to partner with [DoorDash CEO] Tony [Xu] and his team at DoorDash to grow our two big businesses.
Brick and Mortar Expansion Continues
For fiscal 2021, BJ’s plans to open five more clubs, and up to 10 new locations are in the works for 2022. Most recently, the company opened its 222nd club in Seabrook, NH. The opening was one of the six new locations announced in May, with others including Port Charlotte, Florida; Comack, New York; South Fayette and Ross Township, Pennsylvania; and Lansing, Mich.
“Our efforts to expand our footprint have also continued to progress,” said Eddy. “Our Seabrook, NH club opened in June. We will be entering the Pittsburgh Market in December and January in Port Charlotte, Florida; Lansing, Michigan; and on Long Island [N.Y.]. Our second club in Pittsburgh is also slated to open in January. It has shifted a few weeks, due to construction and supply chain issues, and will open early next year. “
BJ’s also plans to add seven BJ’s gas stations in FY2021 and another dozen or so in FY2022, which will give retailers gas stations in about 75% of its clubs by. the end of the next fiscal year.
“We are excited about our expansion and our confidence is underpinned by the strong performance we are seeing at our new clubs,” Eddy said on the analyst call. “As you can see, we are making great progress against all of our strategic priorities, despite what continues to be a challenging environment characterized by high inflation, a dynamic labor market and inventory constraints.”
Ultimately, BJ’s posted third-quarter net income of $ 126.5 million, or 92 cents per diluted share, compared to $ 122.8 million, or 88 cents per diluted share, a year ago. Excluding debt repayment charges and write-offs, a loss on a cash flow hedge and tax adjustments, adjusted net income was $ 125.9 million, or 91 cents per diluted share, from 128, $ 5 million, or 92 cents per diluted share, in the prior year. period of one year.
Analysts on average expected adjusted earnings per share of 80 cents, with estimates ranging from a low of 68 cents to a high of 92 cents, according to Refinitiv.
BJ’s finished the third quarter with 222 clubs and 152 BJ’s Gas locations in 17 states, up from 219 clubs and 149 gas stations a year ago.