Core Insights - BJ's Wholesale Club Holdings, Inc. reported mixed results for Q1 of fiscal 2025, with revenues below expectations but earnings exceeding them, supported by modest growth in comparable club sales [1][2]. Financial Performance - Adjusted earnings per share were $1.14, surpassing the Zacks Consensus Estimate of 91 cents and increasing from 85 cents in the previous year [2]. - Total revenues reached $5,153.5 million, a 4.8% increase year over year, but fell short of the consensus estimate of $5,179 million [2]. - Net sales increased by 4.7% to $5,033.1 million, while membership fee income rose 8.1% to $120.4 million [2]. Comparable Sales - Total comparable club sales increased by 1.6% year over year, with a 3.9% increase when excluding gasoline sales, outperforming the estimate of 3.7% [3]. - Robust traffic contributed 2.5 percentage points to comparable sales growth, marking the 13th consecutive quarter of growth [3]. - Digitally enabled comparable sales surged by 35% during the quarter [3]. Expansion Plans - BJ's Wholesale Club continued its expansion by adding five new clubs and four new gas stations, with a target of 25 to 30 new club openings over the next two fiscal years [4]. Margin Analysis - Gross profit increased to $969.5 million from $883.4 million year over year, with the merchandise gross margin rate expanding by 30 basis points [5]. - Operating income rose by 26.7% year over year to $203.6 million, and the operating margin expanded by 70 basis points to 4% [6]. - Adjusted EBITDA increased by 20.9% to $285.8 million, with the adjusted EBITDA margin expanding by 70 basis points to 5.5% [6]. Expense Overview - Selling, general and administrative (SG&A) expenses rose by 5.4% year over year to $760.9 million, reflecting higher labor and occupancy costs due to new openings [7]. Financial Snapshot - At the end of the quarter, cash and cash equivalents stood at $39.5 million, with long-term debt at $398.9 million and stockholders' equity at $1,971.6 million [8]. - Net cash provided by operating activities was $208.1 million, and adjusted free cash flow totaled $67.6 million for the 13 weeks ended May 3, 2025 [8]. - The company repurchased 55,000 shares worth $6.2 million during the quarter [8]. Guidance - BJ's Wholesale Club expects fiscal 2025 comparable club sales, excluding gasoline sales, to increase between 2% and 3.5% year over year [9]. - Management guided adjusted earnings per share to be between $4.10 and $4.30, compared to $4.05 reported for fiscal 2024 [9]. - Capital expenditures are anticipated to be around $800 million for fiscal 2025 [9].
BJ's Wholesale Q1 Earnings Beat, Comparable Club Sales Rise 1.6%