Q4 FY’24 Sees BJ’s Wholesale Club Beat EPS Expectations, Match Revenue

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) reported its financial results for the fourth quarter of fiscal 2024, ending February 1, 2025. The company achieved a notable performance, with comparable club sales increasing by 4.0% year-over-year. Excluding gasoline sales, this growth was even more pronounced at 4.6%, driven by a consistent rise in store traffic.

Membership fee income also saw a significant boost, increasing by 7.9% to $117.0 million for the quarter. The company maintained a robust 90% renewal rate for tenured members, underscoring the loyalty of its customer base. Digital sales were a standout component of BJ’s performance, with digitally enabled comparable sales growing by 26.0%, contributing to a two-year stacked growth of 53.0%.

Despite these achievements, BJ’s reported a decline in net sales for the quarter, which totaled $5.16 billion, a decrease of 1.7% compared to the same period last year. This decrease was partly due to the absence of a 53rd week in fiscal 2024, which had contributed to higher sales in the previous year. Earnings per diluted share for the fourth quarter were reported at $0.92, with adjusted earnings per diluted share slightly higher at $0.93.

The company’s operating income decreased by 16.6% to $178.4 million. This decline was attributed to increased selling, general, and administrative expenses, which rose to $758.2 million due to higher labor and occupancy costs.

BJ’s Wholesale Beats EPS Expectations, in Line with Revenue

When comparing BJ’s fourth-quarter performance to market expectations, the company exceeded forecasts in certain areas but fell short in others. The anticipated earnings per share (EPS) for the quarter were $0.86, while the actual EPS came in at $0.92, surpassing expectations. However, the company did not meet revenue projections, with actual revenue of $5.28 billion not beating the expected $5.28 billion. This discrepancy was largely due to the absence of a 53rd week, which had inflated the previous year’s results.

Despite the revenue shortfall, BJ’s demonstrated strong membership growth and retention, with membership fee income increasing by 7.9% year-over-year. This growth was driven by successful membership acquisition and retention strategies, as well as higher penetration of premium membership tiers. The company’s digital sales performance also exceeded expectations, with a 26.0% increase in digitally enabled comparable sales, highlighting the effectiveness of BJ’s investments in its digital infrastructure.

Operating income, however, saw a decline compared to the previous year, falling by 16.6% to $178.4 million. This decrease was primarily due to higher operating expenses, particularly in labor and occupancy costs. The company’s strategic decision to invest in new club openings and enhance its digital capabilities contributed to these increased costs. Despite these challenges, BJ’s managed to maintain a positive net income for the quarter, reflecting its ability to navigate a competitive retail environment.

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BJ’s Wholesale Club’s Outlook Optimistic Despite Macro Uncertainties

Looking ahead to fiscal 2025, BJ’s Wholesale Club remains cautiously optimistic despite macroeconomic uncertainties. The company has set a guidance range for comparable club sales, excluding gasoline, to increase between 2.0% and 3.5% year-over-year. BJ’s is also projecting adjusted EPS to range from $4.10 to $4.30, indicating confidence in its strategic initiatives and operational efficiency.

BJ’s plans to invest approximately $800 million in capital expenditures, focusing on expanding its club network and constructing a new ambient distribution center. These investments are part of the company’s strategy to enhance its supply chain capabilities and support long-term growth. The company’s commitment to delivering value to its members remains a core focus, as it seeks to strengthen its market position and drive sustainable growth.

The company has also announced a new share repurchase program, authorizing up to $1.0 billion in stock repurchases through January 2029. This initiative reflects BJ’s confidence in its financial health and ability to generate shareholder value. While the company acknowledges potential economic headwinds, its strategic priorities and disciplined financial management position it well for continued success in the coming fiscal year.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.