BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) Q3 2022 Earnings Call Transcript

Robbie Ohmes: So that’s a really good number against–you know, it wasn’t an easy comparison last year. Can you talk a little more about the discretionary side of the business? I know it’s relatively small for you guys, but it sounds like you might be outperforming what other retailers are seeing in discretionary. What are you seeing in apparel and some of those areas?

Bob Eddy: Yes, I think largely we’ve seen what others have seen, Robbie. We saw a very strong performance in our services division if you think about optical and home improvement and tires and some of those businesses, which shows a healthy consumer – those are not small dollar amount purchases. But we have seen our members be a little bit more choosey about what they’re spending on, and some of the themes that our competitors have talked about with lower apparel sales and some of the more discretionary items, we definitely saw that in the third quarter. I think some of that is weather related – I always hate to talk about that, but it’s never 75 in Boston in November, and it was pretty much the entire front part of the month, so certainly that’s had some part of it as well.

You’re seeing some meaningful deflation in some key general merchandise categories like televisions. Finally, the last thing I would say is the holiday season seems like it’s going to run a little bit late to us. Last year, consumers were hearing buy it in September and October because it won’t be there in November and December, and it seems like they’re back on a normal purchasing pattern this year, at least in our business. A couple of our competitors have noted it that way too, so. You know, we thought GM did okay in the quarter. We’re looking forward to good performance in the fourth quarter, but we’ve got a lot of room to go in the last part of the quarter here to bring it home.

Laura Felice: Hey Robbie, it’s Laura. I’d just clean up one point on that, is that the 7% that I mentioned in the prepared remarks was the two-year stack on GM and services, so on the quarter it was 3% but still positive.

Robbie Ohmes: Got it, that’s all super helpful. Thanks so much.

Bob Eddy: Thanks Robbie.

Operator: The next question comes from Peter Benedict from Baird. Peter, your line is open, please go ahead.

Peter Benedict: Hey, good morning guys. Thanks for taking the question. Maybe I’d like to talk a little bit about the club growth opportunity that you guys see – I know you’re 4% to 5% unit growth. Maybe talk a little more about the new club economics, how they look today compared to where they were historically. I’m curious on your mix of new versus existing market openings, and then longer term, where is the distribution infrastructure, how many stores can the current infrastructure support, at what point would you guys have to start to invest more in that? That’s my first question.