MW BJ's Wholesale stands out by not warning on sales due to tariffs. Stock soars.

By Tomi Kilgore

Tariffs will raises prices for Americans, but BJ's will use it's 'muscle' when negotiating with suppliers to keep inflation down

Shares of BJ's Wholesale Club Holdings Inc. soared toward a record high Thursday, after the membership-based warehouse retailer pleased investors by doing what many others have not done: provide a full-year outlook that wasn't below expectations despite all the tariff uncertainties.

The company also beat expectations for all three key earnings metrics for its fourth quarter, including posting the fastest growth for comparable-club sales in nearly two years. The results were boosted by a 12th straight quarter of traffic growth, a big jump in sales through digital channels and record-high membership.

The stock $(BJ)$ shot up 11.9% in morning trading, to buck the broader-market selloff. It was trading well above its Feb. 11 record close of $106.97, and was on track for its biggest one-day gain since it powered up 19.9% on Nov. 18, 2021.

For the full fiscal year ending January 2026, the company expects comparable-club sales to increase 2% to 3.5%, while analysts were modeling a 2.9% rise.

And the company projects full-year adjusted earnings per share of $4.10 to $4.30, which surrounds the current FactSet consensus of $4.28.

One of the prevailing themes of the latest earnings-reporting season for consumer-facing companies has been to post fourth-quarter results that beat analysts' consensus estimates but provide downbeat outlooks, as fellow discount retailers Walmart Inc. $(WMT)$ and Target Corp. $(TGT)$ have done.

BJ's said the potential impacts of tariffs are not included in current assumptions for the year, but acknowledged that changes in inflation and consumer demand due to tariffs could influence results.

When asked on the post-earnings call with analysts about what tariffs mean for BJ's, Chief Executive Bob Eddy said they will "likely raise prices for Americans," and "may disrupt consumer spending."

But Eddy said that previous periods of rising prices and supply chain disruptions, as companies look to alternate vendors to avoid tariffs, "have often been good for our company" as consumers search for lower-priced goods.

Eddy also pointed out that BJ's has less exposure to tariffs than many other retailers.

Regarding exposure to China, he said only 15% to 16% of its sales are general merchandise, of which only a couple percent comes from China.

But since most of BJ's sales are groceries, there is more exposure to Mexico and Canada. He's hopeful that the company will be able to use its "robust muscle" in dealing with its suppliers to figure to mitigate tariff-induced inflation.

"We'll use that muscle that I talked about in negotiating with our suppliers, moving things around, doing all the things that we know how to do," Eddy said, according to a FactSet transcript.

Back to earnings. For the fourth quarter, ending Feb. 1, BJ's comparable-club sales, or sales at locations open at least 13 months, climbed 4.6% from a year ago, the biggest increase since the quarter ending April 2023. That beat the average analyst estimate compiled by FactSet, which was for 3.1% growth.

Digitally enabled comparable-club sales surged 26%, following 30% growth in the sequentially previous quarter and a 28% increase over last year's fourth quarter.

D.A. Davidson analyst Michael Baker said BJ's earnings report was "a stand out print," given accelerating comparable-club sales and "solid" guidance, which bracketed Wall Street expectations.

Net income for the fourth quarter declined to $122.7 million, or 92 cents a share, from $145.9 million, or $1.08 a share, a year ago.

Adjusted earnings per share, which excludes nonrecurring items, fell to 93 cents from $1.11 a year ago, but that was above the FactSet consensus of 88 cents.

And total revenue was down 1.5% to $5.28 billion, but was just above the analyst consensus forecast of $5.27 billion.

"Our terrific fourth-quarter performance contributed to a record year at BJ's, powered by all-time high membership results," CEO Eddy said. "Our improved assortment, investments in value and significant growth in digital sales drove our 12th consecutive quarter of traffic growth."

BJ's stock has run up 17.1% over the past three months, while shares of rival Costco Wholesale Corp. $(COST)$ have tacked on 4.9% and the S&P 500 index SPX has dropped 4.9%.

-Tomi Kilgore

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March 06, 2025 11:00 ET (16:00 GMT)

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