BJ's Wholesale's earnings show that cheap gas matters for people

By Tomi Kilgore

Comparable sales for the latest quarter rose 6.3%, but were only up 1.5% - just shy of expectations - if gasoline sales are excluded

BJ's Wholesale's stock dropped, as without a big boost from the gasoline business, sales would have disappointed.

Shares of BJ's Wholesale Club slumped Friday, after the membership-based warehouse retailer's fiscal first-quarter results showed how discount gasoline provided a big boost to a key sales metric, that without it actually fell short of Wall Street expectations.

The results came as consumers are increasingly feeling the pressure of stubbornly high inflation, particularly as the continuation of the Iran war has kept oil and gas prices at historically high levels. The national average for a gallon of gas has held above the key $4.50 level, according to AAA, with people paying more than $6 a gallon in some states.

Those high prices benefited BJ's Wholesale (BJ), which has seen income from membership fees grow and gasoline sales jump, as data showed the company was among those offering the lowest gas prices.

BJ's said its members spent $143 million more on gasoline than they did a year ago, as consumers adjusted to higher prices.

"We did see some modest shifts in behavior, with average gallons per fill-up slightly lower, reflecting the pressure higher prices put on household budgets, as well as more members topping off their tanks more frequently in a tough pricing environment," said CEO Bob Eddy said, according to a FactSet transcript of the post-earnings call with analysts.

Some changes people were making is that they weren't filling up, but rather choosing the dollar amounts to spend on gas. They were also coming to "top off their tanks" to try to beat price increases.

What likely disappointed investors, however, was that unlike some competitors, Eddy said BJ's "didn't see a ton that incremental value" of the more people coming for gas also going into the stores to shop.

Walmart had said on Thursday that fuel members spend 1.6-times more in the rest of the shopping basket than a non-fuel member.

The stock sank 8.4% in recent afternoon trading. The stock was down 10.2% so far this week, which puts it on track for the worst weekly performance in three years.

For the quarter to May 2, comparable sales - or sales in stores open at least 13 months - jumped 6.3% from a year ago. But if gasoline sales were excluded, comparable sales rose just 1.5%, or below the average analyst estimate compiled by FactSet of 1.6% growth.

Total revenue for the quarter increased 9.9% to $5.66 billion, above the FactSet consensus of $5.44 billion, with membership fee income also up 9.9% to $132.4 million to beat expectations of $131.6 million. CEO Eddy said he expects membership fee income growth to "moderate" as the year progresses.

Net income fell 4.7% to $142.7 million, while adjusted earnings per share of $1.10 beat the FactSet consensus of $1.03.

The results followed those of discount-retail giant Walmart (WMT) on Thursday, in which CEO John Furner said, according to a FactSet transcript, that "members are tapping into their fuel savings benefits even more" during the current period of elevated prices. Rival Costco Wholesale (COST) is slated to report earnings next week, on May 28.

Read: People are putting less gas in their tanks as high prices crimp budgets, Walmart says.

Looking ahead, BJ's Wholesale said it was keeping its full-year outlook for comparable sales, excluding gasoline, unchanged at 2% to 3% growth, and its guidance range for adjusted EPS at $4.40 to $4.60.

BJ's stock has lost 3.9% in 2026, while Costco shares have rallied 19.5%, Walmart's stock has gained 8.1% and the S&P 500 index SPX has advanced 9.4%.

-Tomi Kilgore

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05-22-26 1240ET