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BJ’s reported Q2 FY2027 revenue of $6.2 billion, up from $5.4 billion a year earlier. Diluted earnings per share rose to $1.36 from $1.14.
BJ’s gross margin fell to 17.8% from 18.7% a year earlier, while its operating margin was 4.05%, compared with 4.02%. Free cash flow increased to $224.1 million from $84.3 million.
For context on the preceding year’s quarter, BJ’s filing attributed its Q2 FY2026 sales growth to increased traffic and ticket in both general merchandise and grocery-related categories, as well as additional clubs. The filing also said higher gasoline prices and increased comparable gallons sold contributed to sales growth in that earlier period. BJ’s attributed the earlier quarter’s merchandise margin decline primarily to pricing investments, partly offset by tariff refunds.
| Q2 FY2027 | Q2 FY2026 | Change | |
|---|---|---|---|
| Revenue | $6.2 billion | $5.4 billion | 15.7% |
| Diluted EPS | $1.36 | $1.14 | 19.3% |
| Gross margin | 17.8% | 18.7% | −0.9 percentage points |
| Operating margin | 4.05% | 4.02% | 0.0 percentage points |
| Free cash flow | $224.1 million | $84.3 million | 165.9% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.10 | $1.04 | Beat by 5.77% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On the earlier Q2 FY2026 earnings call, CFO Laura Felice said merchandise comparable sales increased 3.10%, with growth coming from a balance of traffic and ticket. She said grocery led growth in the perishable grocery and sundries division, while consumer electronics and home contributed to general merchandise and services growth.
CEO Bob Eddy said gasoline prices remained elevated and members continued to seek out BJ’s fuel offering. Felice said comparable fuel gallons rose 10.5% and that fuel profit exceeded the company’s plan, supported by execution and market conditions. Eddy also said the K-shaped economy persisted, although he saw some sequential improvement during the quarter.
Felice said merchandise gross margin declined as BJ’s continued to invest in value for members. In response to an analyst’s question about pricing investments, she said the company considers both its sources and uses of funds and the lifetime value of members. She pointed to club traffic and market share as measures the company watches while managing for both the short and long term.
Felice said membership fee income grew as the company acquired and retained members and increased higher-tier membership penetration. She expected fee income growth to moderate through FY2026 as the effect of the prior year’s fee increase normalized.
On spending, Felice said higher labor, occupancy and depreciation costs accompanied new club and gas station openings. She said a gain from a sale-leaseback of BJ’s Ohio distribution center partly offset those costs. The company repurchased $124.0 million of shares during Q2 FY2026, she said.
Asked about the increase to the earnings outlook, Felice said it was largely a result of the gas business. She said BJ’s invested some of that performance during the quarter while raising its full-year earnings range.
Guidance
On the earlier Q2 FY2026 call, CFO Laura Felice said BJ’s raised its full-year adjusted EPS outlook to $4.60 to $4.80, largely reflecting performance in its gas business.