• Net Sales: $5.1 billion, a 5.4% increase year over year.
• Comparable Club Sales (Excluding Gas): Increased by 4.6% year over year.
• Total Comparable Club Sales (Including Gas): Grew 4% year over year.
• Digitally Enabled Comp Sales: Grew 26% year over year.
• Membership Fee Income: Increased by 7.9% to approximately $117 million.
• Merchandise Gross Margins: Decreased by approximately 10 basis points year over year.
• SG&A Expenses: Approximately $758.2 million, increased due to new unit growth and strategic investments.
• Fourth-Quarter Earnings Per Share: $0.92; Adjusted EPS: $0.93.
• Inventory Levels: Up 4% year over year, flat on a per club basis.
• Capital Expenditures: Approximately $588 million in fiscal 2024.
• New Clubs and Gas Stations: Opened seven new clubs and 12 gas stations in fiscal 2024.
• Membership: Above 7.5 million members with a 90% renewal rate.

• Warning! GuruFocus has detected 4 Warning Sign with BJ.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BJ's Wholesale Club Holdings Inc (NYSE:BJ) reported record net sales, membership, and adjusted earnings per share for fiscal 2024.
• Membership reached an all-time high with over 7.5 million members and a renewal rate of 90%.
• Comparable club sales, excluding gas sales, grew by 4.6% in the fourth quarter, marking the 12th consecutive quarter of traffic growth.
• The company's digital conveniences fueled a 26% year-over-year growth in digitally enabled comp sales for the fourth quarter.
• BJ's opened seven new clubs and 12 gas stations in fiscal 2024, with plans to open 25 to 30 clubs over the next two fiscal years.

Negative Points

• Fourth-quarter merchandise gross margins decreased by approximately 10 basis points year over year.
• The company anticipates slight deleverage in SG&A due to accelerated new club openings and increased depreciation.
• BJ's faces economic and geopolitical uncertainties that could impact costs and consumer behavior in fiscal 2025.
• The company is cautious about potential impacts from tariffs, which could raise prices and disrupt supply chains.
• There is a noted sensitivity to discretionary purchasing among consumers, which could affect general merchandise sales.

Q & A Highlights

Q: Could you provide more color around the cadence of the comp throughout the fourth quarter and how you're looking at 2025, given the implied slowdown? A: Robert Eddy, CEO: The comp cadence was strong throughout the fourth quarter, with November and December being very good months, and January being the strongest. Traffic momentum has continued into Q1, although there's been some sensitivity to discretionary purchasing. Laura Felice, CFO: We expect the first half of 2025 to be stronger than the second half, with the business currently trending well from a traffic perspective.

Q: How are you generally thinking about the tariff risk and its potential impact? A: Robert Eddy, CEO: Tariffs could raise prices for Americans and disrupt supply chains. However, BJ's has less exposure to tariffs than many retailers and has strong capabilities in managing cost inflation. Rising prices often lead consumers to seek value, benefiting BJ's. We remain focused on delivering outstanding value to our members.

Q: What's driving the strength in your digital business? A: Robert Eddy, CEO: The strength is driven by saving members time and making shopping more convenient. Our digital offerings like BOPIC, Curbside Pickup, Same-Day Delivery, and Express Pay are popular. We've enhanced our app and website to improve the shopping experience, and 90% of our digital business is fulfilled through our clubs.

Q: Can you provide insights into the performance of new clubs and your expansion strategy? A: William Werner, EVP Strategy and Development: New clubs are performing well above plans, both in new and existing markets. We see opportunities for growth in both infill and new markets. The company plans to open 25 to 30 new clubs over the next two years, supported by a strong real estate strategy and a robust pipeline.

Q: What are your expectations for merchandise margins in the coming year? A: Robert Eddy, CEO: We had a good year in terms of merchandise margins, although we invested in price to support members amid rising commodity costs. We have efforts in place to raise margins through better sourcing and efficiencies. The impact of tariffs is uncertain, but we are committed to providing value to our members.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.