BJ's Wholesale Club Holdings: Strong new market performance but consumer risks remain

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BJ's Wholesale Club Holdings: Strong new market performance but consumer risks remain

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BJ's Wholesale Club Holdings

Strong new market performance but

consumer risks remain

Reiterate Rating: NEUTRAL | PO: 100.00 USD | Price: 86.64 USD

Reiterate Neutral; lower income member pressured 22 May 2026

We reiterate our Neutral rating and think the risk/reward at ~18x P/E is balanced; we see Equity

a challenging near term path for positive estimate revisions, particularly against a

backdrop of elevated freight costs, pricing investments, and sub 3% comps. BJ reiterated

Key ChangesFY26 comp/EPS guidance following a relatively in line 1Q print. 1Q comp performance

was largely ticket-driven (though traffic still positive), supported by higher-income (US$) Previous Current

members while lower-income cohort remained under pressure. Increased traffic at gas Price Obj. 110.00 100.00

stations driven by BJ’s value proposition has not translated into incremental in-club 2027E Rev (m) 23,503.6 23,472.7

traffic yet although traffic trends have improved 2Q to date. 2028E Rev (m) 24,695.7 24,623.9

2029E Rev (m) 25,999.0 25,923.5

2027E EPS 4.50 4.45Price investments partly funded by tariff refunds

Merchandise margin ex-gas declined 10bp in 1Q as price investments were mostly 2028E EPS 4.80 4.75

offset by tariff refund benefits (+50bp). We expect similar trends in 2Q; merch margins 2029E EPS 5.16 5.12

are expected to be down, but we expect both price investments and tariff refunds will be

less on an absolute basis in 2Q relative to 1Q. Deflation in 1Q was 50bp; we estimate Christopher Nardone

Research Analyst

roughly 100bp headwind came from egg deflation alone. BofAS

+1 646 743 2016

Positive early reads on Texas openings christopher.nardone@bofa.com

Madeline Cech