BJ's Wholesale Q4 Earnings Top, Comparable Club Sales Rise 4%

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]