BJ's Wholesale Q3: EPS Beat, Digital Boom, $1B Buyback Program & More

BJ’s Wholesale Club Holdings, Inc. BJ shares are trading higher in the premarket session on Thursday.

The company reported third-quarter adjusted earnings per share of $1.18, beating the street view of 91 cents. Quarterly revenues of $5.10 billion were in line with the analyst consensus.

Comparable club sales rose 1.5% year-over-year, with a 3.8% increase excluding gasoline. Digitally enabled comparable sales growth was 30.0%, reflecting two-year stacked comp growth of 47.0%.

Membership fees grew 8.4% to $115 million. Adjusted EBITDA gained by 13.5% to $308.292 million.

The company estimates that an increase in sales, temporarily driven by a port strike and hurricanes, had a favorable impact of slightly less than one percentage point on its third-quarter comparable club sales, excluding gasoline.

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Merchandise gross margin rate increased by 20 basis points year over year, primarily driven by the continued execution of long-term initiatives and improved cost management. 

“We expect fourth quarter fiscal 2024 comparable club sales, excluding the impact of gasoline sales, to increase 2.5% to 3.0% year-over-year, bringing the full year fiscal 2024 growth to between 2.3% and 2.4%,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ’s Wholesale Club.

The company exited the quarter with cash and equivalents worth $33.87 million and merchandise inventories of $1.72 billion. The company’s long-term debt stands at $398.66 million.

Outlook: BJ’s Wholesale Club expects fourth-quarter adjusted EPS to be between $0.78 and $0.88. For FY2024, adjusted EPS is forecasted at $3.90 – $4.00, up from previous guidance for a low end of $3.75 – $4.00 and above the consensus estimate of $3.84.

BJ’s Wholesale Club expects fourth quarter comparable club sales, excluding gasoline, to rise 2.5%-3.0% year-over-year.

On November 18, the company approved a new share repurchase program. The authorization allows the company to repurchase up to $1.0 billion of its outstanding common stock and will expire in January 2029.

Price Action: BJ shares are trading higher by 2.67% to $87.99 premarket at last check Thursday.

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