MW BJ's Wholesale CEO warns that tariffs 'may drive prices higher.' Stock falls as sales disappoint.

By James Rogers

'While upward pressure on costs may drive prices higher we are doing everything possible to minimize the impact to our members,' said BJ's CEO Bob Eddy

BJ's Wholesale Club Holdings Inc. maintained its full-year guidance Thursday, despite concerns over the impact of tariffs, but the stock turned lower Thursday as fiscal first-quarter revenue and comparable sales missed Wall Street's expectations.

Speaking during a conference call to discuss the results, BJ's $(BJ)$ Chief Executive Bob Eddy said that the company is less impacted by imports than many of its competitors, but acknowledged tariff-related price pressure. "While upward pressure on costs may drive prices higher we are doing everything possible to minimize the impact to our members," he said.

Eddy described "an incredibly dynamic environment that's been changing by the day," but said that tariffs are not new to BJ's.

The CEO also pointed to the company's agility in merchandising, supply, finance and analytics. "This includes sourcing from alternative countries of origin, reassessing orders, and collaborating with our vendors all to drive the best outcomes for our members," he added.

Eddy described "great pricing" as foundational to BJ's business model. "Our advantage structure allows us to consistently offer up to 25% off grocery store prices, and we are committed to maintaining this edge," the CEO said.

BJ's stock was down 1.4% in morning trading, to reverse earlier gains of as much as 2.2%. The stock had initially rallied into record territory moments after the opening bell, to an intraday high of $120.08, which was above the April 14 record close of $119.94.

BJ's net income for the quarter rose $149.77 million, or $1.13 a share, from $111.02 million, or 83 cents a share, in the prior year's quarter. BJ's adjusted first-quarter profit of $1.14 a share beat the FactSet consensus estimate of 92 cents a share.

Revenue rose to $5.15 billion from $4.92 billion in the same period last year, just below the analyst revenue estimate of $5.19 billion.

However, BJ's maintained its full-year guidance for adjusted earnings in the range of $4.10 to $4.30 a share and comparable-club sales, excluding the impact of gasoline sales, to increase 2% to 3.5%.

The retail sector is wrestling with the fallout from the Trump administration's sweeping wave of tariffs as well as pressure on discretionary spending. Earlier this week, Target Corp. (TGT) cut its full-year profit outlook, citing a highly challenging first-quarter retail environment. Last week, however, Walmart Inc. $(WMT)$ maintained its full-year outlook in the face of economic and tariff-related uncertainties.

And earlier in May, rival Costco Wholesale Corp. $(COST)$ reported mid-quarter, April sales growth that decelerated from the month before.

Read: Costco says customers could stay cautious due to inflation and tariffs. 'When it rains, it rains on everyone,' CEO says.

BJ's stock rose premarket and is up 0.4% in morning trading. The stock had closed Wednesday just 2.1% away from its April 14 record close of $119.94.

The company's membership fee income rose to $120.4 million from $111.4 million in the prior year's quarter. BJ's said this was partly driven by an increase in annual membership fees in January 2025.

Total comparable-club sales, or sales at locations open at least 13 months, increased 1.6%, below the FactSet consensus estimate of 3.6%. Excluding the impact of gasoline sales, comparable-club sales increased 3.9%. Digitally-enabled comparable-club sales grew 35%.

The company said it opened five new clubs, including its first in Staten Island, and four new gas stations during the first quarter. BJ's is still on track open 25 to 30 new clubs over the next two years, Eddy said.

BJ's traffic grew for the 13th consecutive quarter, according to the CEO.

BJ's shares have risen 29.7% in 2025, compared with the benchmark S&P 500 index's SPX decline of 0.5%. Costco's stock is up 10.9% this year.

-James Rogers

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 22, 2025 10:42 ET (14:42 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.