Core Insights - BJ's Wholesale Club is opening its 25th location in Whippany, New Jersey, on March 21, 2025, featuring an on-site gas station and a focus on providing value-driven shopping experiences [1][2]. Product Offering - The Whippany location will offer a wide range of products, including fresh foods, household essentials, and consumer electronics, with members enjoying savings of up to 25% off grocery store prices [2][7]. Membership Benefits - New members can sign up for a one-year Club Card Membership for $25, with a Club+ Card Membership available for $70, offering additional benefits such as gas discounts and rewards [6][7]. Growth Metrics - BJ's Wholesale has achieved a membership growth of over 7.5 million members with a 90% renewal rate, contributing to its strong growth trajectory [8][9]. Digital and E-commerce Initiatives - The company reported a 26% year-over-year increase in digitally enabled comparable sales, driven by enhanced e-commerce experiences and expanded product assortments [9][10]. Expansion Strategy - BJ's plans to open 25-30 more locations over the next two fiscal years, continuing its expansion strategy alongside the opening of seven clubs and 12 gas stations in fiscal 2024 [9][10]. Stock Performance - BJ's stock has gained 17.9% over the past three months, outperforming the industry growth of 1.6% [11].

Operations and Membership - As of fiscal year end 2024, the company operates 250 warehouse clubs and 186 gas stations across 21 states[35]. - The company has over 7.5 million members, with annual membership fee income of $456.5 million for fiscal year 2024[36]. - The annual membership fee for Club Card increased from $55 to $60, and for Club+ from $110 to $120 effective January 1, 2025[36]. - BJ's has over 7.5 million paid memberships as of February 1, 2025, targeting price-sensitive customers with large household sizes[50]. - Club+ members accounted for 39% of total memberships and 50% of merchandise spend (excluding gas and membership fee income) in fiscal year 2024[53]. Sales and Merchandise - The company claims to provide members with savings of over 25% on a representative basket of manufacturer-branded groceries compared to supermarket competitors[24]. - Private label brands, Wellsley Farms and Berkley Jensen, account for approximately 26% of total net sales, excluding gasoline[36]. - In fiscal year 2024, perishables, grocery, and sundries constituted approximately 87% of merchandise sales, while general merchandise and services made up about 13%[51]. - The company limits its merchandise offerings to approximately 7,000 core active SKUs, significantly fewer than supermarkets and supercenters[44]. - BJ's private label products accounted for approximately 26% of total net sales, excluding gasoline, in fiscal year 2024[47]. Strategic Initiatives and Expansion - The company completed the acquisition of four distribution centers and a private transportation fleet from Burris Logistics on May 2, 2022[36]. - The company aims to achieve high sales volumes and efficient operations by purchasing directly from manufacturers and minimizing handling costs[41]. - The company operates in a market where warehouse clubs attract customers from various retail channels, offering lower prices than traditional retailers[37]. - The company has made significant investments in enhancing fresh offerings and new club openings, indicating a commitment to operational improvements[80]. - The company is focused on market expansion and strategic initiatives under the leadership of William C. Werner, executive vice president of strategy and development[81]. Financial Management and Debt - As of February 1, 2025, the total outstanding debt was $575.0 million, including $175.0 million under the ABL Revolving Facility and $400.0 million under the First Lien Term Loan at interest rates of 5.41% and 6.08% respectively[264]. - A 100 basis point change in prevailing market rates would result in an annual interest cost change of approximately $5.8 million[264]. - The company is exposed to interest rate risk, with substantially all borrowings carrying variable interest rates, which may impact net interest expense and cash flow from operations[263]. - The company aims to limit the impact of interest rate changes on earnings and cash flows, reflecting a proactive financial management strategy[263]. - The company may utilize interest rate caps and/or swap agreements in the future to manage interest rate risks associated with variable rate debt[263]. Leadership and Workforce - The executive team includes Robert W. Eddy as chairman and CEO, Laura L. Felice as CFO, and Paul Cichocki as chief commercial officer, among others, indicating a strong leadership structure[78][79][80][81]. - The company has expanded its executive team with Anjana Harve as chief information officer, effective September 2023, enhancing its IT leadership[79]. - The leadership team has extensive experience in retail and consumer products, which supports the company's strategic objectives and operational effectiveness[78][79][80][81]. - The company employs over 33,000 full-time and part-time team members as of February 1, 2025, with no union representation[69]. Community Engagement - BJ's Charitable Foundation has awarded over $37 million to nonprofit organizations since its inception in 2004, supporting community initiatives[74].

Group 1 - Zacks Premium offers various tools to help investors become more confident and informed, including daily updates, research reports, and stock screens [1][2] - The Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, providing complementary indicators to the Zacks Rank [2][3] - Stocks are assigned ratings from A to F based on their Style Scores, with A indicating the highest potential for outperformance [3] Group 2 - The Value Score identifies attractive and discounted stocks using ratios like P/E and Price/Sales, appealing to value investors [3] - The Growth Score focuses on a company's financial strength and future outlook, analyzing projected earnings and sales for sustainable growth [4] - The Momentum Score helps investors capitalize on price trends by evaluating recent price changes and earnings estimate shifts [5] Group 3 - The VGM Score combines all three Style Scores, serving as a key indicator alongside the Zacks Rank to identify stocks with strong value, growth, and momentum [6] - The Zacks Rank model, based on earnings estimate revisions, has shown a strong track record, with 1 (Strong Buy) stocks averaging a +25.41% annual return since 1988 [8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9][10] Group 4 - BJ's Wholesale Club has become a preferred shopping destination by simplifying product assortments and enhancing digital capabilities, leading to increased membership [11] - The company is rated 2 (Buy) on the Zacks Rank, with a VGM Score of B and a Value Style Score of B, indicating attractive valuation metrics [12] - BJ's earnings estimates have been revised higher, with a Zacks Consensus Estimate of $4.22 per share for fiscal 2026 and an average earnings surprise of 12% [12][13]

Core Insights - BJ's Wholesale Club Holdings, Inc. reported mixed fourth-quarter fiscal 2024 results, with revenues missing estimates while earnings exceeded expectations [1][2] Financial Performance - Adjusted earnings were 93 cents per share, surpassing the Zacks Consensus Estimate of 87 cents but down from $1.11 in the prior year [2] - Total revenues reached $5,278.5 million, a decline of 1.5% year over year, and below the consensus estimate of $5,309 million [2] - Net sales decreased by 1.7% to $5,161.5 million, while membership fee income increased by 7.9% to $117 million [2] Comparable Sales Growth - Comparable club sales rose by 4% year over year, improving from a 1.5% increase in the third quarter [3] - Excluding gasoline sales, comparable club sales increased by 4.6%, driven by strong traffic, outperforming the estimate of a 2.8% increase [3] - Digitally enabled comparable sales surged by 26% during the quarter [3] Expansion Plans - The company added seven new clubs and 12 gas stations in fiscal 2024, with plans to open five new clubs in the first quarter of fiscal 2025 and target 25 to 30 new club openings over the next two fiscal years [4] Stock Performance - BJ's shares reached a 52-week high of $113.80, closing at $112.33, with a 12.2% increase during the trading session [5] - Over the past six months, the stock has risen by 44.5%, contrasting with a 2.2% decline in the industry [5] Margin Analysis - Gross profit decreased to $949 million from $963.3 million year over year, with merchandise gross margin rate contracting by 10 basis points [6] - Operating income fell by 16.6% year over year to $178.4 million, and operating margin shrank by 60 basis points to 3.4% [7] - Adjusted EBITDA declined by 9% to $264.6 million, with the adjusted EBITDA margin contracting by 40 basis points to 5% [7] Expense Overview - Selling, general and administrative (SG&A) expenses rose by 2.3% year over year to $758.2 million, reflecting higher labor and occupancy costs [8] - SG&A expenses as a percentage of total revenues decreased by 60 basis points to 14.4% [8] Financial Snapshot - The company ended the quarter with cash and cash equivalents of $28.3 million and long-term debt of $398.8 million [9] - Stockholders' equity stood at $1,847.5 million [9] Cash Flow and Share Repurchase - Net cash provided by operating activities was $271.9 million, with adjusted free cash flow totaling $111.5 million [10] - The company repurchased 645,294 shares worth $61.6 million during the quarter, fully utilizing its $500 million authorization since the program's launch [10][11] Guidance - BJ's anticipates fiscal 2025 comparable club sales, excluding gasoline sales, to increase between 2% and 3.5% year over year [12] - Management guided adjusted earnings per share between $4.10 and $4.30, compared to $4.05 reported for fiscal 2024 [12] - The company expects capital expenditures of about $800 million for fiscal 2025 [12]

Financial Data and Key Metrics Changes - Net sales for the fourth quarter reached $5.1 billion, an increase of 5.4% year over year on a comparable thirteen-week basis [6] - Merchandise comparable sales, excluding gas sales, increased by 4.6% year over year, driven by strong traffic [6] - Total comparable club sales for the fourth quarter, including gas sales, grew by 4% year over year [7] Business Line Data and Key Metrics Changes - The company reported robust traffic and market share gains across its clubs and gas stations, indicating strong performance in both areas [4] - General merchandise continues to show progress, with ongoing efforts to differentiate and grow this segment [5] Market Data and Key Metrics Changes - The company is experiencing strong traffic trends, with expectations that the first half of the fiscal year will be stronger than the second half [11] - The club industry as a whole is gaining market share as consumers seek alternatives to high grocery store prices [30] Company Strategy and Development Direction - The company’s four strategic priorities include improving member loyalty, enhancing the shopping experience, delivering value conveniently, and expanding its footprint [5] - The digital business is significantly contributing to growth, with 90% of digital orders fulfilled through clubs, enhancing convenience for members [16] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong performance for the fourth quarter and highlighted the importance of member value and strategic execution [4] - There are ongoing initiatives to optimize new store openings and improve overall productivity, with a focus on driving clubs to their mature run rates as quickly as possible [35] Other Important Information - The company is cautious about capital allocation and aims to grow sustainably without overextending, despite a significant capital expenditure budget for the year [30] - Management acknowledged challenges related to merchandise margins due to rising commodity prices but remains optimistic about overall performance [46] Q&A Session Summary Question: Can you provide more color around the cadence of the comp throughout the fourth quarter? - Management noted that the comp cadence was strong throughout the quarter, with positive trends in traffic [10][11] Question: How do you manage tariff risks? - Management provided context on past tariff management and indicated that they are monitoring the situation closely [14] Question: What is driving the strength of the digital business? - The strength is attributed to expanded online offerings and increased app usage, with a focus on convenience for members [15][16] Question: Can you frame your exposure to China and Mexico? - Management addressed concerns regarding exposure to these markets, particularly in relation to the food business [20] Question: What are your expectations for merchandise margins this year? - Management indicated that while margins were slightly below expectations due to rising commodity costs, they had a good year overall [46] Question: What is the long-term outlook for new store openings? - Management discussed the potential for continued growth in both existing and new markets, emphasizing a measured approach to expansion [28][30] Question: How is the Fresh 2.0 initiative performing? - Management highlighted the success of the Fresh 2.0 initiative and its positive impact on basket size and customer engagement [40]

Company Expansion Plans - BJ's Wholesale Club plans to open between 25 and 30 new locations over the next two fiscal years, with several in the Dallas-Fort Worth area as early as next year [1] - Recently opened locations include Brooksville, Florida, and Myrtle Beach, South Carolina, with a new location in Southern Pines, North Carolina, set to open soon [2] - Additional openings are planned in Delray Beach and Casselberry, Florida, Warner Robins, Georgia, and Sevierville, Tennessee, throughout the fiscal year [4] Job Creation - Each new location is expected to provide 100 to 150 job opportunities in the local communities [4] Membership Fee Increase - BJ's Wholesale Club will increase membership fees for the first time in seven years [3]

Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $5.1 billion, an increase of 5.4% year-over-year on a comparable 13-week basis [35] - Merchandise comparable sales, excluding gas sales, increased by 4.6% year-over-year, driven by strong traffic [35][36] - Adjusted earnings per share for the quarter was $0.93, reflecting strong membership and traffic, merchandising improvements, and digital conveniences [42][47] Business Line Data and Key Metrics Changes - The perishables, grocery, and sundries division delivered over 4% comparable growth in the fourth quarter, with perishables leading the way [8] - The general merchandise and services division saw comps grow by more than 5% in the fourth quarter, outpacing consumables for the first time since the pandemic [9] - Consumer electronics experienced high-single digit comps, driven by video games, tablets, and audio [10] Market Data and Key Metrics Changes - Comparable club sales for the fourth quarter, including gas sales, grew by 4% year-over-year, with comp gallons growing 3% year-over-year [36] - Digitally enabled comp sales grew by 26% year-over-year, contributing significantly to overall growth [37][24] Company Strategy and Development Direction - The company focuses on four strategic priorities: improving member loyalty, enhancing shopping experience, delivering value conveniently, and expanding footprint [12] - Membership fee income increased by 8.5%, with a renewal rate of 90%, indicating strong member engagement [13][14] - The company plans to open 25 to 30 new clubs over the next two fiscal years, with a robust pipeline of approved new clubs [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate economic and geopolitical uncertainties while focusing on long-term growth drivers [47][54] - The company expects fiscal 2025 comparable sales growth, excluding gas, to be between 2% to 3.5% [48] - Management noted that members remain value-conscious, which has led to increased spending across all income levels [32] Other Important Information - The company ended the fourth quarter with the lowest level of debt since its IPO and no near-term maturities [45] - Capital expenditures for fiscal 2024 were approximately $588 million, supporting the growing real estate pipeline [46] Q&A Session Summary Question: Can you provide more color around the cadence of the comp throughout the fourth quarter and outlook for 2025? - Management noted strong performance throughout November and December, with January being the strongest month, and traffic momentum continuing into Q1 [63][64] Question: Can you remind us how you managed tariff risks previously? - Management indicated that tariffs could raise prices and disrupt supply chains, but periods of rising prices often lead consumers to seek value, benefiting BJ's [74][75] Question: What is driving the strength of the digital business? - The digital growth is attributed to convenience features like BOPIC, curbside pickup, and same-day delivery, along with improvements in the app and website [78][82] Question: Can you share insights on new club performance and future growth? - Management expressed confidence in new club performance, with clubs opened since 2020 contributing significantly to comp sales [29][95] Question: What is the long-term potential for club openings? - Management sees opportunities for growth in various markets and plans to continue expanding at a measured pace [110][112]

We continue to rate BJ's Wholesale Club Holdings, Inc. (NYSE: BJ ) a cautiously optimistic hold. In late summer, shares underwent “healthy consolidation,” but we opined that the “long-term story remains intact.” The fact is that the company isLooking for more returns like this? That is what we do at BAD BEAT InvestingEnjoy more rapid-returns with our strategy to advance your savings and retirement timeline by embracing a blended trading and income approach!If you would like, you can try our service out and ...

Core Insights - The article emphasizes the investment philosophy focused on small cap companies, highlighting the importance of identifying mispriced securities through understanding financial drivers and utilizing DCF model valuation [1] Investment Philosophy - The investment approach is not confined to traditional categories such as value, dividend, or growth investing, but rather considers all prospects of a stock to assess risk-to-reward [1]

Financial Data and Key Metrics Changes - The company reported fourth quarter net sales of $5.1 billion, an increase of 5.4% year over year on a comparable thirteen-week basis [27] - Merchandise comparable sales, excluding gas sales, increased by 4.6% year over year, driven by strong traffic [27] - Adjusted earnings per share for the quarter was $0.93, reflecting strong membership and traffic, merchandising improvements, and digital conveniences [31] Business Line Data and Key Metrics Changes - The perishables, grocery, and sundries division delivered over 4% comparable growth in the fourth quarter, with perishables leading the way [8] - General merchandise and services division comparable sales grew by more than 5% in the fourth quarter, with notable performance in consumer electronics and toys [10][11] - Digitally enabled comparable sales grew by 26% year over year, contributing significantly to overall growth [28] Market Data and Key Metrics Changes - Membership reached an all-time high of over 7.5 million members, with a renewal rate of 90% [7] - The company opened seven new clubs and 12 gas stations in fiscal 2024, marking entry into its 21st state [21] - The company expects to open 25 to 30 clubs across the next two fiscal years, indicating robust growth plans [21] Company Strategy and Development Direction - The company focuses on four strategic priorities: improving member loyalty, enhancing shopping experience, delivering value conveniently, and expanding footprint [12] - Investments in digital conveniences and merchandising strategies are aimed at driving member engagement and loyalty [19][20] - The company is committed to maintaining a strong pricing position, offering up to 25% better pricing than grocery competitors [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and consumer behavior changes, emphasizing the importance of delivering value [24] - The company anticipates comp sales growth excluding gas of 2% to 3.5% for fiscal 2025, aligning with long-term growth expectations [36] - Management highlighted the importance of maintaining strong member engagement and loyalty as key drivers for future growth [19] Other Important Information - The company reported a year-over-year decrease in merchandise gross margins by approximately 10 basis points, attributed to rising costs in key products [30] - Capital expenditures for fiscal 2024 were approximately $588 million, supporting the growing real estate pipeline [33] - The company ended the fourth quarter with the lowest levels of debt since its IPO, indicating a strong balance sheet [33] Q&A Session Summary Question: Can you provide more color around the cadence of the comp throughout the fourth quarter and the outlook for 2025? - Management noted strong performance throughout the fourth quarter, with November and December being particularly good months, and January being the strongest [46] - Traffic momentum has continued into Q1, although there is increased sensitivity to discretionary purchasing due to economic uncertainty [47] Question: Can you remind us how you managed tariff risks in the past and your current thoughts on it? - Management acknowledged that tariffs could raise prices and disrupt supply chains but emphasized that periods of rising prices often benefit the company as consumers seek value [55] Question: What is driving the strength of the digital business? - The digital business is driven by convenience, with services like BOPIC, curbside pickup, and same-day delivery contributing to increased member spending [56] Question: Can you provide insights on the exposure to China and Mexico? - The company has limited exposure to China, with only a few percent of its business imported directly, while exposure to Canada and Mexico is greater but not negatively impactful [66] Question: How is the performance of new clubs and the confidence in accelerating growth? - Management expressed strong satisfaction with the performance of new clubs, which are exceeding plans on both top and bottom lines, and highlighted a robust pipeline for future openings [70]