BJ's Wholesale Club Passes Tariff Refunds to Members as Price Cuts

Quick Facts

BJ’s CFO said tariff refund benefits provided a 50-basis-point lift to merchandise margin last quarter, worth roughly $20 million.
CEO Bob Eddy said the move created about 0.5% deflation in BJ’s retail pricing and widened its price gap over competitors.
BJ’s Q1 net sales rose nearly 10% year-over-year to $5.5 billion, with membership fee income up 9.9% to $132.4 million.

BJ’s Wholesale Club passed tariff refunds directly to members in the form of lower prices, CEO Bob Eddy told investors on the company’s May 22 earnings call. The move generated roughly $20 million in merchandise margin benefit last quarter and drove approximately half a percentage point of deflation across BJ’s retail pricing.

The refunds stem from a February 2026 Supreme Court ruling in Learning Resources, Inc. v. Trump, which found that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. All IEEPA-based tariffs terminated at 12:00 a.m. on February 24, 2026. A subsequent federal court ruling confirmed that U.S. importers were entitled to refunds on tariffs already paid.

BJ’s had previously raised in-store prices due to those same tariffs. Eddy framed the decision to redirect the refunds toward pricing as a long-term membership play. “We will continue to use any source of gain that we can to really bring that value back to our members so that we can build the franchise for the long term,” he said.

CFO Laura Felice confirmed the refund impact was baked into the company’s current outlook but noted uncertainty remains. “We’re certainly watching the tariff environment that’s continually moving,” she said.

Q1 Performance

BJ’s posted strong first-quarter results alongside the pricing news. Comparable club sales rose 6.3% year-over-year, though the figure excluding gasoline grew a more modest 1.5%. Digitally enabled comparable sales jumped 28%, reflecting a two-year stacked comp of 63%.

Membership fee income climbed to $132.4 million from $120.4 million in the prior year’s first quarter, driven by gains in new member acquisition, retention, and penetration of higher-tier memberships. Merchandise gross margin slipped about 10 basis points year-over-year, a result the company attributed to deliberate price investment.

Gas was a major factor in the quarter. Eddy said members spent $143 million more at BJ’s gas stations in April alone compared to the prior year. “By the end of Q1, retail gas prices were up nearly 50% compared to the start of the quarter,” he said. He added that if fuel prices fall, BJ’s would likely return those gains to members as well.

Consumer Pressures and Competitive Positioning

Eddy acknowledged a split consumer picture. The “vast majority” of comparable sales growth came from higher-income members, while lower-income households face a “more pressured environment.” That dynamic is shaping BJ’s merchandising strategy.

“We want to take our assortment upmarket a little bit in the good, better, best construct,” Eddy said. “We have too much in the good level, and we need more better and best.”

BJ’s Texas expansion continues to outperform, with new club membership running 33% ahead of plan. The company plans to open 26 new clubs over a two-year period and held its fiscal 2026 adjusted EPS guidance at $4.40 to $4.60. Comparable club sales excluding gasoline are expected to grow 2% to 3% for the full year.

The tariff refund strategy puts BJ’s in a position to close the value gap with Costco and Sam’s Club. In Q4 2025, BJ’s comparable club sales excluding gas rose 2.6%, lagging behind both rivals. Redirecting refund dollars into pricing gives the chain a concrete tool to compete on value heading into the second half of fiscal 2026.