John Park

John Park from Wells Fargo asked about BJ's Wholesale Club's merchandise gross margins remaining flat despite price investments, seeking to understand the offsetting factors within gross margins and the outlook for Q4 merchandise margins.

Answer

Chairman and CEO Bob Eddy confirmed price investments widened price gaps in Q3 and explained that various efficiency levers, such as distribution center and transportation efficiency, along with growth in the retail media program, helped offset these investments to fund member value.

John Park, on behalf of Ed Kelly from Wells Fargo, asked about BJ's Wholesale Club's investment in price, how merchandise margins remained flat despite these investments, and the offsets in gross margins that contributed to this outcome, along with the outlook for Q4 merchandise margins.

Answer

Chairman and CEO Bob Eddy confirmed significant price investments in Q3, which widened price gaps against competitors. He explained that these investments were offset by various efficiency levers across the business, including distribution center efficiency, transportation improvements, and the growth of the retail media program. He stated the company will continue to prioritize member value and operate for the long term, balancing margin and value.

John Park from Morgan Stanley asked about the gross margin impact of third-party clinical solutions and the value proposition for partners to integrate with Amwell. He also followed up on how macro factors are affecting sales cycles and pricing.

Answer

CEO Dr. Ido Schoenberg explained that Amwell's platform reduces customer acquisition costs for partners and simplifies outcomes reporting for sponsors, creating a high-margin revenue stream for Amwell. He noted the current macro focus on cost savings can accelerate sales cycles for solutions that demonstrate clear financial ROI, which is a strength for Amwell's platform.

John Park, on for Craig, asked if management planned to revisit its withdrawn long-term financial targets and what agency partners were saying about the post-election spending environment.

Answer

CFO Anna Bryson stated that the company will not issue new long-term targets in the near term, pending more clarity on the pharma digital market growth rate and the full impact of the client portal. CSO Dr. Nate Gross commented that the post-election outlook is still uncertain but that Doximity's platform is relatively insulated. He noted market stability in pharma ETFs suggests significant risk has not been priced in.