BJ's Wholesale Misses Sales Mark In Q4, Navigates Mixed Quarter With Positive Outlook

BJ’s Wholesale Club Holdings Inc BJ reported fourth-quarter FY23 sales growth of 8.7% year-on-year to $5.36 billion, missing the analyst consensus of $5.39 billion.

Total comparable club sales decreased by 0.4%. Comparable club sales, excluding gasoline sales, increased by 0.5%.

Membership fee income increased by 6.5% to $108.4 million. Digitally enabled comparable sales climbed 28% Y/Y.

Gross profit rose 6.7% Y/Y to $963.3 million with a margin of 17.9%. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased by 40 basis points Y/Y.

Operating margin was 4%, and operating income for the quarter grew 11% to $214 million. Adjusted EBITDA of $290.74 million increased 8.9% Y/Y.

BJ’s Wholesale Club held $36 million in cash and equivalents as of February 3, 2024. Operating cash flow for twelve months totaled $718.8 million.

Adjusted EPS of $1.11 beat the analyst consensus estimate of $1.06.

Under its existing share repurchase program, the company repurchased 797,056 shares of common stock, totaling $53.2 million in the fourth quarter.

“Our membership grew in robust fashion and we continue to retain members at all-time high rates. We delivered impressive market share gains in our clubs and at our gas pumps, driven by acceleration in traffic and growth in units sold,” said Chairman and CEO Bob Eddy.

Outlook: BJ’s Wholesale expects FY24 EPS of $3.75-$4.00 versus the consensus of $3.98. 

BJ currently expects FY24 comparable club sales growth, excluding the impact of gasoline sales, to grow 1% – 2% Y/Y.

The company expects merchandise gross margins to improve by 20 basis points year-over-year and a capital expenditure of about $500 million.

Price Action: BJ shares traded lower by 1.59% at $71.00 in premarket on the last check Thursday.