BJ’s Wholesale Club Sales Grow Following IPO

Following its initial public offering (IPO), sales are on the rise at BJ’s Wholesale Club. In the second quarter, net sales at the wholesale chain increased by 4.3 percent year-over-year and arrived at $3.2 billion, Retail Dive reported.

“[BJ’s] continued to post favorable results, with the second quarter in line with our expectations,” Moody’s vice president and senior credit officer, Charles O’Shea, told Retail Dive. “Sales and membership income growth indicate that merchandise and store experience are resonating with its base, and we expect these trends to continue to improve as [the company] executes its strategic transition.”

With a portion of the proceeds from the IPO, the company sought to reduce its $623 million in principal debt along with $10.2 million in unpaid and accrued, as well as a prepayment premium. As a result, the actions aided a rise in credit ratings: BJ’s Moody’s rating increased from B3 to B1, and the company’s S&P rating rose from B- to B.

The news comes as BJ’s Wholesale Club stock was proving to be a hit with investors in June after returning to public trading. Shares jumped more than 20 percent on Thursday (June 28), reaching upwards of $21, the Financial Times reported.

The company filed for an initial public offering (IPO) just seven years after going private, The Wall Street Journal (WSJ) reported in May. The deal could value the Massachusetts-based chain somewhere between $2 billion and $3 billion. With 215 locations across 16 eastern U.S. states, BJ’s saw $12.75 billion in annual sales and drummed up profits of more than $50 million in its fiscal year ending in February.

BJ’s private equity-backed IPO listing is an unusual move at this time, noted WSJ. Retail IPOs, in general, have been rare amidst industry struggles. This time last year, 25 private equity-backed companies debuted on U.S. exchanges, raising a total of $10 billion.