BJ's Wholesale Q3 2025: Membership Growth Drives Resilience

For investors tracking the retail sector, the warehouse club model—dominated by giants like Costco and Sam’s Club—offers a unique window into consumer behavior. Today, we are digging into the latest quarterly filing from BJ's Wholesale Club Holdings, Inc. (BJ).

BJ's, a leading operator of membership warehouse clubs primarily on the East Coast of the United States, recently released its 10-Q for the third quarter of fiscal year 2025, which ended on November 1, 2025. Operating on a model that prioritizes volume and membership loyalty over high markups, BJ's results provide insight into how consumers are balancing grocery budgets against discretionary spending.

You can view the full filing here: .

To understand how BJ's translates bulk sales into bottom-line profit, we have visualized their income statement below. This diagram illustrates the flow of funds for the quarter, from top-line revenue down to net income.

The Membership Engine

The heart of the warehouse club business model is membership income. While BJ's sells billions in merchandise, the profit margins on those goods are razor-thin by design. The real stability comes from the recurring revenue of membership fees, which flows almost entirely to the bottom line.

For this quarter, BJ's reported $126.3 million in membership fee income, a robust 9.8% increase compared to the same period last year. This growth is a positive signal for the company's health, indicating that despite economic fluctuations, customers see value in paying upfront for access to lower prices.

Breaking Down Sales: Groceries vs. Gas

Total revenue for the quarter hit $5.35 billion, driven primarily by $5.22 billion in net sales. However, the composition of these sales tells a nuanced story about the current economic environment.

BJ's reported a 1.1% increase in comparable club sales (a key metric measuring sales at locations open for at least 13 months). However, this number was dragged down by gasoline sales. While members bought more gallons, the average retail price of gasoline dropped year-over-year. Excluding gasoline, merchandise comparable sales were actually up 1.8%.

The sales mix confirms that BJ's serves primarily as a grocery destination for its members:

• 72% of net sales came from Perishables, Grocery, and Sundries.
• 18% came from Gasoline and Other.
• 10% came from General Merchandise and Services.

Profitability and Rising Costs

While revenue grew, profitability saw a slight compression. Net Income for the quarter came in at $152.1 million ($1.16 per share), a slight dip from $155.7 million ($1.18 per share) in the same quarter of the previous year.

The primary driver for this dip appears to be in Selling, General and Administrative expenses (SG&A)—essentially the overhead costs to run the business. SG&A rose 7.4% to $788.2 million. The company attributes this increase to investments in member engagement, marketing, and digital strategies. In the highly competitive retail space, these are necessary expenditures to protect market share, even if they temporarily squeeze operating margins, which settled at 4.1% for the quarter.

Conclusion

BJ's Wholesale Club continues to demonstrate the resilience of the subscription-based retail model. With membership income growing nearly 10% and gross margins holding steady at roughly 19%, the core business remains healthy.

However, the slight decline in net income highlights the challenge of balancing growth investments with operational efficiency. As a smaller player compared to industry titan Costco, BJ's must remain agile, ensuring that their increased spending on digital infrastructure and marketing yields long-term loyalty in an environment where consumers are watching every penny.