BJ's Wholesale Q4 Earnings Top, Comparable Club Sales Rise 4%

BJ’s Wholesale Club Holdings, Inc. BJ reported its fourth-quarter fiscal 2024 results, showcasing mixed performance. While revenues fell short of the Zacks Consensus Estimate, earnings surpassed expectations. Both the metrics declined year over year. Nonetheless, comparable club sales growth accelerated sequentially.See the Zacks Earnings Calendar to stay ahead of market-making news.BJ’s Fourth-Quarter InsightsBJ’s Wholesale Club reported adjusted earnings of 93 cents a share, which came ahead of the Zacks Consensus Estimate of 87 cents but decreased from $1.11 reported in the year-ago period.This operator of membership warehouse clubs generated total revenues of $5,278.5 million, which fell 1.5% from the year-ago quarter’s level and missed the consensus mark of $5,309 million. Net sales decreased 1.7% to $5,161.5 million, while membership fee income jumped 7.9% to $117 million.Total comparable club sales during the quarter under discussion rose 4% year over year, following an increase of 1.5% registered in the third quarter. Excluding the impact of gasoline sales, comparable club sales jumped 4.6%, led by robust traffic, and fared better than our estimate of a 2.8% increase. Robust traffic boosted comparable sales by more than 3 percentage points, marking the 12th consecutive quarter of growth. Markedly, digitally enabled comparable sales advanced 26% during the quarter. BJ's Wholesale continued its expansion in fiscal 2024, adding seven new clubs and 12 gas stations. The company plans to open five new clubs in the first quarter of fiscal 2025 and targets 25 to 30 new club openings over the next two fiscal years.Shares of BJ's Wholesale hit a 52-week high of $113.80, before closing at $112.33 yesterday. Shares of this Zacks Rank #2 (Buy) company rose 12.2% during the trading session yesterday. In the past six months, the stock has advanced 44.5% against the industry’s decline of 2.2%.BJ's Wholesale Club Holdings, Inc. Price, Consensus and EPS Surprise BJ's Wholesale Club Holdings, Inc. price-consensus-eps-surprise-chart | BJ's Wholesale Club Holdings, Inc. QuoteA Look at BJ’s MarginsGross profit decreased to $949 million from $963.3 million in the year-ago period. The merchandise gross margin rate, which excludes gasoline sales and membership fee income, contracted 10 basis points from the year-ago quarter’s level. Merchandise margin was adversely impacted by the mix of sales as well as continued investments in the business.Operating income declined 16.6% year over year to $178.4 million, while operating margin, as a percentage of total revenues, shrunk 60 basis points to 3.4%. We note that adjusted EBITDA fell 9% to $264.6 million during the quarter, while the adjusted EBITDA margin contracted 40 basis points to 5%. We had anticipated 80 and 70 basis points of decline in operating and EBITDA margins, respectively.Selling, general and administrative (SG&A) expenses rose 2.3% from the year-ago quarter to $758.2 million. This reflects higher labor and occupancy costs stemming from new club and gas station openings in addition to an increase in incentive compensation. As a percentage of total revenues, SG&A expenses deleveraged 60 basis points to 14.4%. We had anticipated SG&A expenses to deleverage 80 basis points.BJ’s Wholesale Financial SnapshotBJ’s Wholesale Club ended the quarter with cash and cash equivalents of $28.3 million. The long-term debt was $398.8 million, while stockholders’ equity was $1,847.5 million.Net cash provided by operating activities and adjusted free cash flow totaled $271.9 million and $111.5 million, respectively, for the 13 weeks ended on Feb. 1, 2025. As part of its share repurchase program, the company bought back 645,294 shares worth $61.6 million in the quarter. Since launching the program in the fourth quarter of fiscal 2021, the company has repurchased 6,826,153 shares, fully utilizing its $500 million authorization.Last year in November, BJ’s board of directors approved a new share repurchase program, authorizing the repurchase of up to $1 billion worth of shares, with the program set to expire in January 2029.Here’s What BJ GuidedBJ’s Wholesale Club anticipates fiscal 2025 comparable club sales, excluding gasoline sales, to increase between 2% and 3.5% year over year. Management guided adjusted earnings per share between $4.10 and $4.30 compared with $4.05 reported for fiscal 2024. The company foresees capital expenditures of about $800 million for fiscal 2025.Don’t Miss These Other Solid BetsSprouts Farmers SFM, which is engaged in the retailing of fresh, natural and organic food products, currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 15.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings implies growth of 12.1% and 22.4%, respectively, from the year-ago reported numbers.Costco COST, a membership warehouse club, currently carries a Zacks Rank #2. COST has a trailing four-quarter earnings surprise of 2%, on average. The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings implies growth of 7.4% and 11.9%, respectively, from the year-ago reported numbers.Post Holdings, Inc. POST, a consumer packaged goods holding company, currently carries a Zacks Rank #2. POST has a trailing four-quarter earnings surprise of 22.3%, on average. The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and earnings suggests growth of around 0.3% and 2.2%, respectively, from the year-ago reported numbers.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BJ's Wholesale Club Holdings, Inc. (BJ): Free Stock Analysis Report Costco Wholesale Corporation (COST): Free Stock Analysis Report Sprouts Farmers Market, Inc. (SFM): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks