BJ's Wholesale Club Holdings, Inc. (NYSE: BJ) delivered a solid fiscal second-quarter 2026 report on Friday, beating Wall Street's revenue and earnings estimates and raising its full-year outlook. Shares moved higher in response.

The numbers tell a story of a retailer that's finding ways to win even as consumers remain selective about where they spend. Total revenue climbed 15.7% year over year to $6.227 billion, comfortably ahead of the $5.957 billion analysts had penciled in. GAAP diluted EPS rose to $1.36 from $1.14 a year earlier, while adjusted diluted EPS increased 19.3% to $1.36, beating the $1.17 estimate.

Sales, Membership And Digital Growth

Net sales jumped 15.9% to $6.091 billion. Operating income rose 16.5% to $252.4 million, and net income increased 15.4% to $173.9 million. Adjusted EBITDA climbed 14.3% to $347.2 million.

Comparable club sales were up 11.9%, though that figure gets a big boost from gasoline. Excluding fuel, comparable sales rose a more modest 3.1%.

Membership fee income grew 9.9% to $135.6 million, helped by member acquisition, retention, and higher-tier penetration. Total membership hit a record 8.5 million.

Digitally enabled comparable sales surged 30% and were up 64% on a two-year stacked basis, showing that BJ's is making real progress in getting members to shop across channels.

During the quarter, BJ's opened three clubs in Texas and one gas station, ending the period with 267 clubs and 206 gas stations across 22 states.

Margins And Operating Costs

Gross profit increased to $1.11 billion from $1.01 billion a year earlier. But merchandise gross margin, excluding gasoline sales and membership fee income, declined about 20 basis points. The company said continued pricing investments weighed on margins, though tariff refund benefits partially offset that drag.

Selling, general, and administrative expenses rose to $851.2 million from $786.4 million, reflecting higher labor, occupancy, and operating costs tied to new openings. Higher depreciation from a larger base of company-owned clubs also added to costs, though a sale-leaseback gain helped offset the increase.

Cash Flow And Share Repurchases

BJ's generated $401.5 million in operating cash flow and $265.5 million in adjusted free cash flow during the quarter. The company ended the period with $30 million in cash and $629.2 million in total debt, putting net debt at $599.3 million, or just 0.5 times last-12-month adjusted EBITDA.

Shareholders got some love too: BJ's repurchased about 1.38 million shares for $124.1 million during the quarter, leaving about $422.1 million under its existing authorization.

BJ's Raises Fiscal 2026 EPS Outlook

Looking ahead, management raised its fiscal 2026 adjusted EPS guidance to $4.60-$4.80 from $4.40-$4.60. The new range brackets the $4.53 analyst estimate.

The company kept its outlook for comparable club sales growth excluding gasoline at 2% to 3% and continues to expect about $800 million in capital expenditures. It also plans to open 25 to 30 clubs across fiscal 2027 and fiscal 2028.

Management Highlights Gas, Tariffs And Texas Growth

On the earnings call, management made it clear that gas is a big part of the story. Shoppers are increasingly turning to BJ's gas stations as elevated fuel prices make its discounts more appealing. Comparable fuel gallons jumped 10.5% in the quarter, even as industry data showed overall comparable gallons fell about 5%. Management said members have "flocked" to its pumps, and gas-discount membership offers have generated an "outsized" response.

That strong volume, combined with favorable market conditions, pushed fuel profit above plan and helped drive the earnings outperformance.

For the second half, expectations remain broadly unchanged. BJ's said tariff refunds that helped fund first-half price investments are nearly exhausted. But supplier refunds, assortment changes, retail media, and gas profits should provide alternative funding for continued member investments.

Management expects membership fee income growth to moderate toward 6% by year-end as the prior fee increase laps. Texas membership is tracking more than 30% ahead of plan, and the company plans to reduce its SKU count by about 20% over the next couple of years.

BJ Price Action: BJ's Wholesale shares were up 3.59% at $94.58 at the time of publication Friday.