BJ's Wholesale Q3 Earnings Top, FY24 View Up, Membership Hike Ahead

Core Insights - BJ's Wholesale Club Holdings, Inc. reported mixed third-quarter fiscal 2024 results, with revenues missing estimates but earnings exceeding expectations, both metrics showing year-over-year improvement supported by comparable club sales growth [1][4]. Financial Performance - Adjusted earnings per share were $1.18, surpassing the Zacks Consensus Estimate of 91 cents and increasing from $1.00 in the prior year [4]. - Total revenues reached $5,099.4 million, a 3.5% increase year-over-year, but fell short of the consensus estimate of $5,126 million. Net sales rose 3.4% to $4,984.4 million, while membership fee income increased by 8.4% to $115 million [5]. - Comparable club sales grew by 1.5% year-over-year, with a 3.8% increase when excluding gasoline sales, outperforming the estimate of a 2% increase. Digitally enabled comparable sales surged by 30% [6]. Membership and Shareholder Value - The company expanded its membership base to 7.5 million and announced its first membership fee increase in seven years, effective January 1, 2025, raising the annual fee by $5 to $60 and the Club+ membership by $10 to $120 [2][12]. - A new $1 billion share repurchase program was introduced, reflecting the company's commitment to enhancing shareholder value [2][11]. Operational Efficiency - Gross profit increased to $975.5 million from $902.5 million in the previous year, with the merchandise gross margin rate expanding by 20 basis points due to effective cost management [7]. - Operating income rose by 15.1% year-over-year to $229.4 million, and the operating margin improved by 50 basis points to 4.5%. Adjusted EBITDA increased by 13.5% to $308.3 million, with the adjusted EBITDA margin also expanding by 50 basis points to 6% [8]. Guidance and Future Outlook - The company raised its fiscal 2024 guidance, projecting fourth-quarter comparable club sales growth (excluding gasoline) between 2.5% and 3%, leading to full-year growth of 2.3% to 2.4% [13]. - Management expects fourth-quarter adjusted earnings per share to range between 78 cents and 88 cents, with full-year adjusted earnings projected between $3.90 and $4.00 per share, an upgrade from previous guidance [14].