BJ's Wholesale Club (BJ) 23 May 242025 Q1 Earnings call transcript

Hello, everyone, and welcome to the BJ's Wholesale Club Holdings, Inc.

First Quarter Fiscal 2024 Earnings Conference Call. My name is Candice, and I will be coordinating your call today. After speaker's remarks, there will be a question and answer session. [Operator Instructions]. to Park. conference like your over now Cathy host, would hand call the to I ahead. go Please

Good morning, to and welcome Earnings Fiscal Call. XXXX BJ's First Quarter

Executive on and uncertainties differ we Financial XX-K risks of the These could today Laura risks cause expectations current and on Executive the meaning to Development. Please involve expectations me are of recent during Eddy, federal Please and section our forward-looking that Strategy actual and Joining results statements this filed statements those with that call, the and Risk SEC materially Bob described uncertainties. Form Vice and President, laws. Felice, XX-Q our most make are and Officer; Factors Chief Chief remember our Bill may for based from Werner, securities Form of Chairman see a Officer; this call. the within description

on press for financial call, GAAP. now Bob. turn we information non-GAAP to that with in certain presented refer we'll isolation in be on to please considered with The presentation investors. Relations or prepared the to not accordance most for and will Finally, believe to information the intended presentation of to over a GAAP. And measures I'll a Investor financial today's Please investor latest for today's posted reconciliation accordance of information non-GAAP note call our website release the is refer in substitute these this that provide as comparable measures measures financial useful

quarter Thanks today results. our everyone. discuss us first joining for morning, Good to

share. in growth continued This quarter marked by membership fees was and market strong

sales. growth in also are the proud We comp of continued

a first inflation quarter given to We lap year's tough expected the be last dynamics.

of proud by continued particularly strong traffic are underpinned and unit growth. we momentum So our

sales, while the well executing quarter. first continues sales gas long-term excluding Comparable laser-focused day-to-day on team to manage by our grew X.X% strategic the priorities. staying club Our in

the drove stations unit above our our our points fourth of perishables, the X with units the flat, division and Inflation strong proposition similar comp quarter sundries percentage club both grow increasing first in gas compelling continue and in in value year. the trend to volumes traffic last Our to at in we quarter, quarter. contributing grocery and traffic was

merchandising growth are rewarding gained amazing units sundries and us and experienced our growth X% members unit particularly Comp quarter. categories. quarter. unit when Our the and in broader dollars the for Comp market and sundries our growth perishables, Consequently, compared led was impressive, equally our dairy strongest in perishables, improvements in in in in we fresh for value. division our volumes, declines the first marketplace. grocery produce and both We grocery up was by in the over share with especially

and as categories the first we purchasing, negative variance GM business Our in wetter quarter general slightly the remain we progress efforts. weighed in critical of such our saw markets delivered comp found merchandise overall of anticipation increasingly handful markets not on the outstanding their weather sets comp When prior across of weather-sensitive are model seasonal ticket cooler also is and air versus to experienced a with have it. and merchandise to our transformation that with presented exactly better division. to turns, in the continue categories XX-point in spending, that year. Consumers weather as members great performance higher We compared on weather make shop to discerning members a when a waiting conditioners quality are general and patio value about

on and we at in at after crucial member this shifting right We and presented are execution quarter time the the right price. Successful are delivering new right focused is has intensely delivering assortment on perception exciting the a quarter to marketed front. that way and believe and we

in behaviors apparel our hunt spend to designed inspiring general of proud categories, categories drive this the growth which to trend-right strength home the with significant for drove meaningfully in X% is in nearly renewal. into and in making led We've growth. performance of assortment I'm turned of with in electronics Home in and exhibit our bath correlate that elevated leaning enhanced first membership with this trip the potential general the appliances greater Strengthening shop our long the to merchandise time items in to for merchandise our higher-growth members. and cleaning engage a are that demand. Members the in textiles the kitchen highly time we sheets a especially company. segment categories ability long-term continued products treasure of the member realize and fourth first and comping opportunity who quarter merchandise consumer such showcase in with positive general fact, confident year's Higher-quality In and division. the quarter. both and we're last significant the quarter remain positive. We're growth see towels progress the comping as our the first also our much this pleased resonating

our priorities to improving These priorities success. strategic long-term critical member remain loyalty, shopping an delivering giving conveniently and members are value X our experience, footprint. unbeatable growing our Our

these making of are progress significant We areas. in each

counts build, value and rate. Member demonstrating continues proposition increased Our year-over-year of the growing to power and XX% our sequentially. both renewal membership momentum

platforms both quality in membership expanding membership nearly improving new this and of are existing as well. growth. We're markets with We powering half our digital

retail $XXX base our credit Our of today. the consists fee is which highest card, hold tier pay One+ and offering we believe co-brand our who members member best in

the double lifetime and helping tier greatest our are membership our continues the in grow these highest digits quarter. tier spending As higher surpassed first penetration you XX% to This year-over-year, value. members exhibiting loyal most know,

first a to As testament success, year-over-year. of membership growth X.X% fee reported the in ongoing quarter, we income

the us, higher to is improve to remain we their maintaining membership for and This coming will with deepening experience continually their based long-term shopping focused digital merchandising, our in-club service as our through and on members our where strength as in meat. our course, full such strive produce shop We shopping driving of deli. differentiated members and owners. A drive on and our amazing why both value love to grocery conveniences, our loyalty great know and keeps value. We back renewals. as weekly assortment member they Members well the already members choose experience amenities do

While benefit, we April, know our meat, at an selection chain better and to of quality over Fresh full supply produce control excitement our perishable and our X.X we offering. our we they initiative value we been launched more bringing the do enormous and has even freshness could last produce. knew Having

resulting We our maximum arrivals improve process from ultimately areas at and already step feedback our We marketing. in the We great strengthened such members' berries, packaging products. built of members. relevant sourcing in-stocks and reassessed received every from also our newer offerings faster clubs in was seasonally and quality new to and implemented feedback as X.X our robust Fresh and and existing directly dragon fruit. of homes. We invested tools ones sumo mandarins into as and relationships new giving introduce insights on to speeding freshness supply maintain We've produce. members and vendor in fresher up knowledge to team chain forge such our on to the training,

this light that more compelling of front their through we have the year yielded clubs our and significant visit. value. This and program so help contributing began control our offering we the value promotions navigation and in are scaling freshness, across the installing to that with and improve by to signage in coolers our our high-quality, in chain-wide strong of showcase members our perishables displays traffic our in amplifying quality club are year, moments We're our supporting month, at effort year this pilot, trends. produce our X.X clubs. drove produce than channels. We we've low-priced In this engagement which believe all delivered last the of our category featured improvements member incremental marketing last and trips in with first drawn in much ran of Our success, the Fresh X% our made consistently comprehensive performance content this the fresh in enticing members, and

has category comp quarter, the points delivered the growth in X In of fresh market. fact, unit our outperforming produce first

will BJ's to shop As advance this destination. continue Fresh work rollout win we solidify member's year, aiming we our the to our as further X.X to

with Jensen provide to members high-quality Wellsley innovating brands, at Berkley our products value. Farms own substantial and with We're

Our sales brand own quarter. continues penetration to grow each

as capabilities sundries way such in quarter, Our the our own paper areas to trash. In brands. illustration offering and launched of own lead bags. storage is a This categories and approach we've first the food strong our

a the were a comparable that identified and brand develop while our extensive members to value than We that value to and benchmarking Our more seeking greater national are brands national XX%. products offering high-quality underwent help than research of offer. leading partner the analysis suggests

the X/X improving our future. to trend expectations, brand than from XX% members of category. in the sales the response Our our more of exceeded and our members' in has coming make sales sales with reaching the Owned over goal confident of up we're category new business, half

a our first gained year-over-year. growing the Finally, was broader gallons to members. the again X% quarter mid-single deliver compares traffic once This We [indiscernible] down the is same a market, U.S. comp to which period. driver us we value which way for in gas by in in for share digits with approximately

which promotions savings we Our grounded through of allows business to and mindset philosophy our work This money. extra us on hard is to offer the believe deepens co-brand value. members member rest credit We to and delivering our time in members' gas, gas card save like our proactively loyalty. our

our value taking digital conveniences shop to proposition members want. is clubs as allow ever advantage than them they how of our For our easier

online, and pickup Express In can checkout. club Our the pickup in Pay lines with digital and same-day convenience curbside our gallery club, coupon buy include also initiatives shoppers leverage skip delivery.

quarter in double-digit of on sales past growth enabled digitally through years. posted the in growth is top Our pandemic. This have X meaningful every the

XX% digitally the sales experience. our and In refining year-over-year. We're enabled user fact, first were continuously up our comp quarter improving in

This month, efficiencies to through the our enabled labor our fulfillment in digital by a this fact, whole of numerous which products the locate square we also shopping order our driving enhancements one our clubs easier. out making XXX,XXX in foot autonomous is are ability process. lot app, robots, rolling is inventory In

We to to even the will more deliver continue convenience members capabilities in our future. digital into lean and to our value

in on We club this strategy. year. to our estate in real continue great make we progress our market earlier opened Finally, the Nashville Goodlettsville third

clubs also year, Louisville, more markets fiscal XX core like openings expanding to Pines and back and openings half in X Myrtle Beach Metro our in open in York of Knoxville, including markets Southern the in with Florida. in New openings X expect new our market the We while

addition as part into our upgraded signage unit expansion, new as with our well of to as are footprint X.X. existing In we remodels investing Fresh

our in our accelerated to pipeline, levels future initiatives with move an company's are which and real pace history. the at remains We at our on estate building continue highest

elsewhere. track, with greater members government per frequency retail of focused, due we health today's while to incredibly which As of believe in members selective value model. rely In under bodes we budget their aid, limited their purchases backdrop. We're across environment, to forms us Spend low-income well first a higher limited quarter, with value achievement and and shopper trips, we great trip as deliver members low. highly with remain mid assess maximizes member high, consistently business the members our remain of In the assortment income pressure, in not more to income challenging mid- they're all units we on SKU tender, convenience. share meaning a and driving they the spending our strong remains doing supplement levels curated consumer, and for are exhibited waning to our market us that driving particularly quality, by continue in growth engagement an and additional so, that

the quarter, of in consecutive this base fact, year-over-year after started grow to sales In first overall X member declines. again from quarters

listening my like market our we to to membership, members. in us on by our on members and to your dedication Looking dedication strength value of reinforced turn to success. I'd their unwavering it and confident taking markers focus thank outlook key on company. and keep we inspired now to Furthermore, our for for the our business, of long-term with year. believe strategic in ability of hard impressed healthy and grow of positioned share. priorities, gratitude families operating close These by who every model, ahead, well to team care you details our the provide the for are underlying delivering over XX,XXX remain today, our traffic results day. us single Laura work. I'll more for the To I'm all depend team our deep

whose clubs, financial thanking Thank I'd contributed results. efforts center and you, across join club support team to distribution our members Bob of centers, strong Bob. to like in quarter our another

results. X% year-over-year, sales, billion, gallons quarter a club comparable Let's in the gas the $X.X dig sales, gas on in quarter, sales year. which sales comp growing Merchandise were first approximately year-over-year led exclude Total X.X% X.X% including over X-year the were prior by X.X% into increased and by our Net up sales by stack. sold.

and We traffic with which prop, are pleased quarter, unit maintain demonstrates to our value resonate the continues members. which growth to in strong our

inflation As several quarter, the flat Bob deflation. following months April about slightly was of for mentioned, slight inflecting positive

BJ's share Our first grocery, base in supports this and more once X% year-over-year. again by needs. a quarter sundries drove on loyal grew growing in in gains comp its for quarter, and relies market perishables our division our than shopping which We that belief member

on this fee outperforming mutually of digital for drivers will year-over-year for broad-based a of new in $XXX.X like under just grew merchandise XX% strength Our services million to enabled general Members comp meaningful in members. loyal About retention clubs first same-day the both online, leaning the with MFI, our their shopping of future. Membership driven become existing and digital merchandise these XX% and delivery, across first rest a grew membership approximately up and are by our acquisition time XX% conveniences, enhancements quarter first divisions in and who or sales decreased pick general X-year fulfilled calculation. Digitally into in the buy income, in sales beneficial the comp stack. with division the clubs. quarter, and quarter by save X.X% X% club which by our services we more leverage is and remain continue digital This our win-win, major growth. and

first in add also continued addition we clubs members opened in late mostly In the quarter. from to the to fourth club opening the Goodlettsville that our quarter, X new

growing size pleased are and We in our momentum membership with quality.

margins. Moving gross on to

merchandise by business, margin gasoline XX rate points the our gross basis decreased Excluding approximately year-over-year.

lapping as last the some expected, to unfavorable of our which flows year's As co-brand financial led decline. year-over-year experienced we launch, we anniversary quarter

historical our the our gross Our million. growth investments strategic levels. SG&A than expenses and quarter merchandise quarter increase first margin attributable primarily to year-over-year was higher The priorities. to $XXX.X new drive other remains rate were unit approximately for

in share industry As Bob expectations. We and the of growing business the From mentioned resulting faced margin gas quarter earlier, our gain $XXX.X as we million, that a longer continue rent fell quarter, first gallons with year-over-year. which, a EBITDA noncash to approximately in by broader in X% reported comp perspective, expense our reminder, profitability headwinds adjusted add-backs. no profits preopening below includes

XX.X% windfall. of and rate primarily flat driven were expectations. tax with our adjusted higher-than-expected in our line effective by earnings per $X.XX share of Our in, was All tax quarter year-over-year first

inventory to sheet. our on about our balance position. Moving feel We good

of about ended amount in levels Our improvement over in same team inventory flat year-over-year right to right the points clubs the improving and with hard, X product the in-stock basis approximately is ability working clubs have our despite the at time. right XXX period. We first of new quarter the our

the consistent forth set allocation Day. ago Investor framework strategy year at Our we is a our with capital

best We growing is business. cash continue to use that believe of profitably our applying the it our towards

with to with our As sheet. estate of membership, support leverage quarter our to the by cash net of such, merchandising, flows We will term. which and and aligns funded initiatives digital investments X continue X.X first balance target our enabled be strong sub by turns ended real long-term

have an authorization. XXX,XXX end, remains million remaining part We approximately for important as under quarter And million. allocation our shareholders well. of to current the cash $XX.X excess Returning as $XXX capital repurchased our shares of strategy approximately we

and to deploying value. shareholder We take to disciplined to capital approach our maximize will balanced continue a

year. to our outlook the Turning for

year remains the fiscal for unchanged. guidance Our

to our We excluding to of comp fiscal our getting closer from the gas, half XXXX to back algorithm sales, X% range expect X%, the continue to long-term towards year.

continued pleased inflationary merchandise. We are with pressures general business progress are year still traffic, led we slightly our a units market consumable Despite and a beyond in and control, strong by our share. assuming external

year, We the new first cadence highest of the year. of increase this achievements of rate growth MFI and membership be that openings of consider will we X.X% membership believe fee all of in we aforementioned including are year, the the the proud year-over-year drive elements as the the timing of club last openings our income, in quarter

merchandise of expect to deliver brands. rate growth XX fiscal continue approximately driven for basis margin XXXX to by management gross own strong We and continued improvement our points cost in

sales particularly lapping We are we to deleverage A growth reminder from our growth as that planning club initiatives, we as for fiscal also in in over new continued SG&A variable are XXXX. multiyear a in fiscal invest ramp compensation XXXX continue tailwinds unit period.

unchanged. remain Our gas expectations for

of Longer We expect believe in of to remarks. presumed to remaining deliver to the to of strength all deliver we rate shareholder range. $X.XX X are of for we for planning $X Putting to closing turn fiscal of continue confident term, well the quarters we year. an and adjusted for I'll the together, tax sustainable XX% Bob it EPS remain maximize the effective underlying approximately this back that, our value. With growth business are to

Thanks, Laura.

the anniversary are this XXth celebrating year. company's We

on taken over model even particularly past reflect history, a to we've be our transformed great better, I As business it years. X the and

of leading strong and families priorities built clear combined We is has to us. depend strategic way the with purpose foundation our sustainable a take the and in on This, who growth we operate, value Our care simple. creation.

membership. size grow the of quality We our and will

our will We member through experience merchandising improvements. unbeatable offer

and BJ's today to us the our compelling Above take will it our and I'm Club. I'll team, will and future. members. to and our again your entire joining profitably elevate questions. operator for Thanks we our turn over of I'm your support now for to deliver of will Wholesale for our we back We time, grow money excited proud always save footprint to brand. strengthen members' value all, our digital and conveniences our

The from question Instructions] of Peter the [Operator of Benedict first line comes Baird.

X.X%. to down some increase very First, growth to growth. fastest the continue reason rate. balance year? first there. step willing as performance we curious a number this the expect a should robust would impressive dollar the the It's MFI probably sequentially? just grow But to I of it is influences year, question. any you're That's how the bit? on just Obviously, why through at my Or it the recognize consider out fee we little of And place look kind

up get Look, team to doing The perspective. to them question first increase. premium engaging impressive a through quarter new members a of have and the great renewing things, getting been took had doing the job members, with is a them Morning, well. Pete. to nicely up think membership field our our signing from members. fantastic folks fee the as interacting we Thanks, pretty I We're

a we've lot to of I So proud there. think got be

clubs was said we just pretty the into increment we how trend the recur, fell and But ex that falls last ahead this slightly our with previous our the that prepared last X.X% of and the are of As spacing ahead year's and we plans. in own was year that don't way year. high, trend expect said, remarks, that slightly to most over of that of

we're pleased from we're membership a with we're what So perspective. doing going and where pretty fee

really to whole the As given fee this it increase, point. bunch of we to at thought haven't a

it. when definitely share, so share news And there's we'll to

Got Fair enough. you.

So looked of on really my on merch follow-up is and clean. margins, inventory kind inventory

merch understand that XQ help of the what second your from in half. there, in of kind get here, XX quarter, for in kind of kind just the the XX% Maybe versus And and mean points margin maybe what first done progress that you've cadence us to sales curious year. the then path down the your basis for does line? Just

doing We inventory inventories Sure. perspective. are team bunch our Yes. The pretty has weren't particularly last this at happy of been a year, with work. frankly an levels with we're from point. our happy Look, in-stock where

Not ways and today which so a inventory than to the higher way more in don't by need. going are just increases a and that's find around. in-stocks today frankly, done And inventory offset has bunch present move those work bad, but inventory to inventory go of team to that levels they year raise to our efficient we were ago to reducing a significantly

rationalize new we've up continued I able well. to we've little a inventory So and We there. portfolio base got got think the even as should continue clubs further upside be the coming raise the bit. to that inventory into in-stocks drives Obviously,

we let I'll tackle landed margin for the question. So the we're the pretty pleased quarter. And of maybe end with Laura where

of in Yes. as happened that. expected largely gave On we for was color year when portfolio bit merch is it the when QX it, margins, guided and transition last we we co-brand a lapping our of QX on little what

expect that, that to down of continue remainder was only drive event we the progress margins a will So year. the through we and QX as not

line next comes from the McShane question The Goldman of of Kate Sachs.

about had and are especially thinking you the And at it taken you pricing. from more now? little was competitive know Last about the was now, pricing the I a in by actions environment But the asked maybe gap, the another? rollbacks think context you we thinking I and environment but are right quarter, answer bit how how you competitor promotional. price time have about a that promotional of your

every Kate, say club and day the provide would I the relevant Certainly is of guess thanks channel for searching what what one. week. for value, the I are a and we others that's And question.

space competitors there. out lot us a there's of So of between and our some

better lot every how thinking our it's So pricing pretty value what's it's about single I spend been news sure sorts through different think, fantastic proposition credit All a members. whether of card. thinking or that's for co-brand of rolling a time, I'm day, value through a our [indiscernible]. We promotions, to into the we whether things whether of we through lot can the spend members not provide time about in that obviously,

to go. shelf promotional value we'll day-to-day values knitting the sure and sticking so keep making providing we just as and we're our And right

Simeon comes from Morgan Gutman Stanley. of the line of Next

growth, I on some the to want think The growth highest time. in follow quite versus it's the up spread I MFI. in club been MFI

down was And I it quarter? it talk clubs, good be guess I opening step so more why then year. about here? And from guess, why the in So you'll throughout should can the you

timing So strong? just was so and about that why thinking the

for thanks fact has Simeon, with do the year. of end the the the around really question. we clubs several opened fiscal that to right It

those really quarter so until didn't up first members signed And a we any clubs of didn't had here. the and we bunch recognize fees -- membership in

so is there bump. artificial an And

absolutely that more as fees. in You're But upward we've the of right QX, we lot be that on an serve end us open in the bunch and should number QX membership a got should clubs as for in a year, this really, the QX highest.

we're As proud we're I of said doing. earlier, what very

engaging We is very here a it's Prospective and doing come But we when fantastic from look for an and X, communications Members our are a of the team full-year MFI definitely members said, the that our we're and to they time. start into we of us of put and as at with And ahead year come good with job selling with pleased. doesn't for in. our that them ahead do continue ended where turning it appropriate them promotions plans. sit continue of in, perspective. But reacting over membership and slightly plan sort to them membership members all interact to them they're last year, way. rest the

pleased we're with very making the very, we're So there. progress

typically and compare you existing that you BJ's Are the to new across they're an had it across share any insight categories take members never look before, spending And to nonfood I and if can in see spend, on been member. the you what into making that and items the Or some categories? get of, you other do with traction the in start you're guess, the able them spend? grocery, food you they then to

are business fantastic a job in purchases. And grocery that's, opportunity meeting I trip two BJ's, member needs there we merchandise. missions have for what think lot great a general about is I a we come of and is trip, talked we one tremendous think, when our expanding day-to-day to run in merchandise one grocery their that you are general a in fact trip we've doing a Look, different and dispute grocery the

time. like for credibility I is we've had that aim and a we certain categories. time. think other we've capability apparel. QX done our to And about it -- general results merchandise electronics in expand talked categories really And in great in long CE in last apparel talked consumer the long continued fantastic into for of the year. coming That's X ones. get the is about time our home Really business in in got there year the those momentum all business big first X long categories. The We've out two to We going. alive seasonal a

largely in I this weather finally at And here warm think we're point. that's Northeast. weather-related the getting some

we good GM making with food the success soon. With read business. pleased that said, that very we're So sort a have we're of should on the in progress build to of on the

increasing. talked at As look prepared member are they the we we spending levels, in as about remarks,

so them continue And right going bring like members and into looks the fold. it we're the in direction as we to attract new

Robbie Ohmes America. comes line of question Bank next of of from The the

are clubs. finding the -- second some the between -- front question I'll And is? And give market about missed versus than talk -- clubs expectations? just doing Bob, my new you then the differences recently upfront. your reason probably and Bob, can questions more My how those Laura. can are the two of there The you that. the in what is others, coolers I you're better that opened clubs, have if

You're talking that comps? doing what driver Can just is remind kind to about and what you're me you them before. of there

in spent don't coolers year has of remarks And And lot. We great. we testing were about. learned and but Why We not to I across of we sure. most a our them all Fresh a talked board it in are to how on a at part was ways members react in think, light last our produce, it our prepared a today. how lot to we reverse put about as take improve. And produce better. Yes, that the make X.X to good effort. make Florida Fresh X.X We The talked order. better assortment really

as is get produce We really in faster. that of it have We've should our that They produce produce of the be Fresh to across year. right understand than to We to about need changed coolers, certainly sort the win. I changed comps, they through signage a it. freshest fresh. signpost Get our And timing bigger flows buying things a a quantities assortment. changed from are say a the marketing. We it been the our thinking perspective, we business gains bit. to driver way tend our it the they store. a the to We've priced make produce in to then grocery been us. time of because they changed giving the right And they're are but We've cooler X.X in We And there's we've of members. seen wouldn't coolers result from the these it's put here system buying at people sourcing are get put our as clubs. but our in at would a people sure methodology tremendous visibility just a product not big to really right, members effort. that that we're that they're our raising changed entire

pretty X.X to give them right all aimed that. in them sizes, at to the more freshness. of it And is favorable. pack we price. at So days give the are right returns the And them early Fresh need of to Give really it

So a of run. room lot we've got to

and members it they in they what us But out We certainly undergone to have produce yet. pushing our keep entire transformation. they're chain this the that We need on telling rolled see, clubs buying it. haven't are more like through the

the well. long We We've a a or That's So slate year, doing I team and would said this since a back-end biggest have earlier, you, estate new for job good fantastic their done more I clubs weighted, as true pushing by next year we'll the said I for several there. From had. the a costs slate they all shot. of exceeded years new opening as pipeline real we met pipeline. tell we've got Bill great ever our into getting it's keep underwriting. started have and perspective, been again clubs ago, guess well, really

why returns portfolio to how at new you and our have a that's new in to Bill? interact anything, the pedal how learning run members great. club learning clubs, to really to our on are in tell hard these the learning foot We effective point. Do new efficient fashion. with got add gas And been how the an want we've story new this But in markets, across

into just would to Madison, this a was we've market, that expansion. us markets. And entry and year in last good moving to with We'll couple new in year response as and Tennessee, throughout our market XXth announced. And continued great growth in growth Knoxville into also for clubs Island. a in lot look our those with in and the our that a about we really including membership add, down market, metro we big forward Alabama talked I club state expansion entry York No, Robbie, the its our core, Florida. just on club the of our We New Maryville seen year, first Nashville into then of continue a key our Staten

it in the about talked company's our here Bob at out, QX. mentioned we history bunch units the by QX. as So a it pipeline, most in grown look robust being pipeline by of We've the we

deeper, we So even going continue continue and to we're to see it's great now and in. lean to results,

Laura. sorry, Yes,

That's I've the our started something of including made, for And going acquisition cooler comments okay. comments. on doing that already all and coolers was been working Burris, jump that with the to of while. I work this on we've on we're a Fresh just to the so reminder, a is just X.X and

the coming kind of just chain company. And really all showing what that so for the and did we're acquiring that supply it members starting see market and our to to

from question next the line Grom Haskett. Chuck of Gordon of The comes

can you merchandise. little about a bit general talk Bob, more

little of to CE parts X%. slack up that the there's business that pick And category, overall were other on apparel, good noticed really the need obviously but a down sound bit. services You including the I

So I weighing the on services that's guess in category. on what's going

few things Chuck, there. you've Look, in got a

lies You've through. you've you've other. That's what got of or GM, sort services, where co-brand core accounting and call ancillary got got the we

the of fine well. of negative. working. There's as drag to a really key been going slightly expect CE apparel, is the the the the at we're these of the to services it's pleased honestly, for And way continuing there. We quality, we the can categories. results is biggest business slightly would in and Members brands, that sure magic of in right the a the the [ stuff some negative. is the about timing making shop make what sure GM at in on talked and strong sure SKU apparel business very particular be GM is to and that's I'm in making it's So The number We're number was making doing. talked a doing QX. this, lot the about. Really on making making in was it's trend. home on there. part that vision still Services reducing is through so quite ] with value we've sure sure reducing correct, really assortment ways sure That's negative reacting new here color sort understand easily have and right of we shelf, making simple, trend, member the

seasonal, That delighted business alive. thought members. that and resonated category no the And But the fix done. that this done by we to very have highly means weighted. certainly, was one be quarter so we we stuff going to we is with So home harder was our see in are were to have far that come

XX-point we a this that prepared in differential impact our to as GM. But such really becomes so overall Southeast core and clubs warmer it's into our north category on Northeast we As of in south. seasonal ugly pretty of actually time calculation in the get remarks, part saw on a [indiscernible] big because I those about it that big talked weather positive comps from year, the for or with weather, had clubs a the all summer business

that here, will weather turn quarter. we're positive GM stuff pretty of So confident to that the to the some we'll in starts turn as back get second comps in And on.

margin all to Okay. related. Capital on And down just sounds core Laura, It That's hear. gross XX. was that One the then, like good

tie XQ you And help the drivers line? get of other your balance could margin ahead work, through that we SKU year, upside the if the there? the of the on look you as CMP to rationalization So can in efforts gross and you talk about

got think Yes, there. of look, I part the answer you

we we things. come? work good at bps right, That is So comes still for about the I a that think XX started full year-end say, from does talked the would and doing with two number. year How CMP.

So assortment deliver that's really our looking right members. value, and across shelves the right sure on have assortment the that to categories we making at the to

our efforts. brand we little on then to that. And continue own bit So a from work

Longer progress really to think in that we've And there. is the continue happy so we term, we're made with sight. penetration XX%

And really us. progress so bit that remarks, and gross continues for talked the to we bags, a storage of come some to the continue the we little that's us of margin that from do excitement those and year what gives paper trash about that. In well will prepared work expansion we on on And as continue the about efforts. remainder

comes question the Melich of next ISI. Greg The of from line Evercore

sounds came quarter. we gas on profits you where us profit? update Or like the Is It are down alleviated? in that could penny

-- couple on been at being last share a segment our years. market number to a sorry, perspective top of a members tougher growing that and quarter day a pretty Despite value of our up same growth market bounds. now We've every we're business of of profitability great significant was proud our for Yes. year leaps They're last from react big share in quarter gas. in a to time. X% gallon continuing the it and Certainly, in very growth,

take we'll all long. that day So

day. sell As every out you typically we of gas know,

And ground we so of are putting in competitors who like sell we more a rising the QX, in cost everyday saw normal far gas volume constantly less and in we sort more our environment versus expensive do. than

cost compresses and rising environment. it margin So

and That quarter on given as pretty bit rose what so far. a costs has better gone we exactly that's So in precipitously the world. here in saw going gasoline what's oil in first the QX

dollars, so today, good And to try We it is QX plan million sit can below Gas a million you of so our don't we quarter QX one. reasonable tell year. our by, impossible still was And do year as dollars. call is couple better. with it, We plan a certainty quarter. far few by the a a predict. and here for is

drive changed We're that still bottom not our line confident have get into can confident well. a continue it. We clubs. grow from profitable part gas the grow we're as And we our to business it's interaction We're the our our business with the still folks business. will our business confident core of of pumps continue and we can to still and

on I back Bob. would follow-up great, be That's margins. guess my

not you that's of merch help margin Laura, think, line down changeover but credit the because was card you impacting the said Could of how top I the card the changeover rest from mostly gross that. all margin SG&A? and credit unpack the

Yes.

So that lapping the the you're There a driven right. What is slightly. co-brand. QX of the comp rate merch it depression by margin in down largely component of is was dragging quarter of first

remainder said before, year. I the go dissipates of As we that the into as

efforts, be grow at about, talked already QX, be will and that there expect margins. Again, co-brand of it QX, I we any the about lapping brand work and thinking will disruption the that the CMP really QX merchants and we from like as won't are those of XX penetration doing, members about our expect our that assortments we core the course we from great over year, So look largely business, own every merch all that day. and our bps, to and offer value

as year, it a but I my to of got sure last just this year, the top on it year, make impact think, the have right. I is And X/X somewhere, I note switch that last at reminder, that least want -- roughly in was was I line. what

the of again, number, for year, it's remainder So kind the quarter, year. a the we'll know first and ] that but of last I [ nonevent quantified lap the transition it, don't we've

question D.A. from Next Davidson. Mike comes the of Baker line of

your and sort the about wasn't -- you -- are of as The here we year the the credit you better comps that gets that you bad some back? And then business comparisons a co-branded suggest comp I'll throughout you going when better monthly the quarter as go things the assumption easier do throughout that does Northeast, question. talked card in through business Can business talk come by lose that that, trends or was because Is get weather it ask does the about a that follow-up, dumb the that when better I'll should can [indiscernible] cadence weather upfront. pressure like away. get math year? correct ask

the X.X frankly, as comps the better pretty easier like co-brand through build we it of a Mike, year, Fresh of way of progress, better merchandise up and the members. throughout planned correct, will business signing lapse. Part it is more you it away. is general Part Part we things is it. get are and rolling

we inflation, of of Were -- would quarter talked better long-term our and a end a lapping year. knew bit was this our dogfight we comp at true. as towards we than We be points plan. the that sort should XX the of get our about, So algo certainly -- X.X%

differences. lower So I some we're will from we mean, March there see out. I as happy plays progress a would was and imagine the February And tell I year with followed I cadence. forgot here that. huge monthly April. weren't the than you,

no who's think surprise heard I reported. what given that's everybody we've all else from

Ours was place. same definitely in that

it's to it It's business, down. have it, we weather-sensitive summer want that driven the the belabor do early year. very GM categories in we seasonal still look don't think I at As

and So I we've and outside. until think raining there's buy when I [indiscernible] think people just need XX it's sales. to any waited really -- it's lost don't raining no wait they not

Boston. pick we'll quarter. expect do this has been in that nice in the week I And second see up So business

hopefully, So -- a is May we'll strong up on end note.

from of The Kelly comes Fargo. next line the of Edward question Wells

start to this fee around year, just, clarification wanted growth I first, membership Bob. the

is be better down Is gauge exit of trying rate of just about? I you that when the a bit think that of to number. a step to there. all is that maybe that you're I'm sort get last QX talking set year you expect to from year? little a But mentioned about full like sort

question. full-year the on commentary his was giving the for you Thanks Yes. rate. I

last were So we for were the we full year -- and X change year.

north are but QX the version number. slightly below our current We the of of that. And plan,

it. Got

for cohorts. second question Okay. And income around then you

that a That's you're we're there. [ you say than Is your what of a that lower-income seeing share snap seeing to in Just gain? sort you ] call hearing just a ]? bit heard you're kind seeing curious positive, that of I as cohort was expense think it's from talk not think more Can about better Are the customer? while. I elsewhere. been on I what you something [ lapping

go got or think things less seeing more, folks benefits. Yes. We've gain not That's time. very got of sensitive about would us, to their we're Those direction Look, up, They there. over so. I last they case share always their government year. they talked benefit largely year the have been spending have a wallet When their last before in couple of would the spending the of non-government go seen with we've with us down. frankly been been never which spending more when

them. that provide the And we've for me the we right value. more else. them need they value them tells that can So destination are a than convinced We anybody

of we're growth slightly cohort that down in wallet, don't of to dollars huge source quarters of I a back their pleased number couple positive. around in going So to has think so very far. a pleased be given particularly continue And us. Their spending pleased spending total of but just turned they that after the the it, that. are that they behavior trips continue nicely. to do very holding about to in there come we're putting to hopefully, be with fair see stuff basket. their in right They're We're their it's

Cerankosky comes of question line Chuck Research. from of Next Northcoast the

back increased of the again, Everyone. item line, you as lower per Does Bob well retail an clubs that go reflect number units about average gross talked to margin as you purchased? improvement. Laura, if and

comp units, about So our talk right? we comp units in when base. units, Chuck, it's

us. So coming new thinking what value of measure clubs this member would is looking certainly good for they're our be point. a base excluded. see They're at really And about. It's to

We So I of wallet, lap from have mark how inflation think picking it's there. much of we're tough an perspective. up share a a certainly good

grow I from would gain that to the lap and continues if here. and so wanes, comps And expect inflation share

business. of at behavior. a points we're traffic. momentum with look So the in X And mean, frankly, running pleased fantastic I we're the the the we unit traffic is have quarter-on-quarter

is comps, simply you're can is would sales you on And when had impact comp the lower? talking in pickup the merchandise because brands the what priced quantify own business, that about that

Yes. that given a members drag cases Look, there the prepared new tend it's they switching usually getting from XX% into our talked the food to be but increase is the about for time. comps. brand We a are lot own with cheaper. category first where just bags, of Certainly, in remarks on are brands storage a

about calculus, than and from So perspective. they're just more points right? brand, us basis margin cheaper that XX% X,XXX accretive to a remember the

percentage as comp it bps of growth be So margin headwind, bit well. XX a point give tends but for rate to of of every tends a growth little to us

comp all not you're see But own in that So going margin. going really brand much. see to you're to the the in it business

to that going member it kind renewal thing. of satisfaction, repeat You're see rate, in shopping,

Good luck for the year. the rest of

the concludes Q&A session. now This

closing So I'd like CEO, back conference the to hand over Bob remarks. Eddy, and to Chairman for

Thanks Thank to got forward. reported We're we've very time morning, Great. proud you. you the for going this morning, and our tremendous in of we everybody. this your business results confidence

end So great at and much. second I Thanks to the wish you you so summer, talk quarter. of we'll all the a

This today's concludes conference.

now may lines. You your disconnect