MARLBOROUGH, Mass.–(BUSINESS WIRE)–BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) today announced its financial results for the thirteen weeks and thirty-nine weeks ended November 2, 2024.
“Our third quarter results demonstrate the combination of great value and strong execution. We delivered robust membership growth and hit a milestone of 7.5 million members. Our value proposition continues to resonate in new and existing markets,” said Bob Eddy, Chairman and Chief Executive Officer, BJ’s Wholesale Club. “I want to thank our team members for their commitment to our purpose of ‘taking care of the families who depend on us’. We are excited about our future.”
Key Measures for the Thirteen Weeks Ended November 2, 2024 (Third Quarter of Fiscal 2024) and for the Thirty-nine Weeks Ended November 2, 2024 (First Nine Months of Fiscal 2024):
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BJ’S WHOLESALE CLUB HOLDINGS, INC. |
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Thirteen |
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Thirteen |
|
% |
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Thirty-nine |
|
Thirty-nine |
|
% |
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Net sales |
$ |
4,984,385 |
|
$ |
4,818,670 |
|
3.4 |
% |
|
$ |
14,883,793 |
|
$ |
14,299,132 |
|
4.1 |
% |
|
Membership fee income |
|
114,979 |
|
|
106,053 |
|
8.4 |
% |
|
|
339,485 |
|
|
312,273 |
|
8.7 |
% |
|
Total revenues |
|
5,099,364 |
|
|
4,924,723 |
|
3.5 |
% |
|
|
15,223,278 |
|
|
14,611,405 |
|
4.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Operating income |
|
229,383 |
|
|
199,375 |
|
15.1 |
% |
|
|
593,813 |
|
|
586,414 |
|
1.3 |
% |
|
Income from continuing operations |
|
155,748 |
|
|
130,467 |
|
19.4 |
% |
|
|
411,755 |
|
|
377,780 |
|
9.0 |
% |
|
Adjusted EBITDA (a) (b) |
|
308,292 |
|
|
271,738 |
|
13.5 |
% |
|
|
826,027 |
|
|
791,385 |
|
4.4 |
% |
|
Net income |
|
155,748 |
|
|
130,467 |
|
19.4 |
% |
|
|
411,755 |
|
|
377,869 |
|
9.0 |
% |
|
EPS (c) |
|
1.17 |
|
|
0.97 |
|
20.6 |
% |
|
|
3.08 |
|
|
2.79 |
|
10.4 |
% |
|
Adjusted net income (a) (d) |
|
157,254 |
|
|
135,538 |
|
16.0 |
% |
|
|
416,994 |
|
|
384,688 |
|
8.4 |
% |
|
Adjusted EPS (a) (d) |
|
1.18 |
|
|
1.00 |
|
18.0 |
% |
|
|
3.12 |
|
|
2.84 |
|
9.9 |
% |
|
Basic weighted-average shares outstanding |
|
132,083 |
|
|
133,069 |
|
|
|
|
132,304 |
|
|
133,232 |
|
|
||
|
Diluted weighted-average shares outstanding |
|
133,333 |
|
|
134,984 |
|
|
|
|
133,764 |
|
|
135,338 |
|
|
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| (a) |
See “Note Regarding Non-GAAP Financial Information.” |
|
| (b) |
Adjusted EBITDA for the thirteen and thirty-nine weeks ended October 28, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition, and include adjustments for restructuring charges to conform to the current period presentation. |
|
| (c) |
EPS represents net income per diluted share. |
|
| (d) |
Adjusted net income for the thirteen and thirty-nine weeks ended October 28, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation. |
Additional Highlights:
- Total comparable club sales increased by 1.5% and 2.0% in the third quarter and first nine months of fiscal 2024, respectively, compared to the same periods in fiscal 2023. Excluding the impact of gasoline sales, comparable club sales increased by 3.8% and 2.3% in the third quarter and first nine months of fiscal 2024, respectively, compared to the same periods in fiscal 2023. 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.
- Membership fee income increased to $115.0 million in the third quarter of fiscal 2024 from $106.1 million in the third quarter of fiscal 2023. Membership fee income increased to $339.5 million in the first nine months of fiscal 2024 from $312.3 million in the first nine months of fiscal 2023. The increase in both comparative periods was primarily driven by strength in membership acquisition, retention and higher tier membership penetration across both new and existing clubs.
- The Company announced plans for its first membership fee increase in seven years, effective January 1, 2025. The Club membership fee will increase by $5 to $60 a year. The Club+ membership fee will increase by $10 to $120 a year. The Company also announced a new benefit for new and existing Club+ members, including BJ’s One+ Mastercard® cardholders. Effective January 1, 2025, these members will receive two free same-day deliveries on eligible orders of $50 or more during each annual membership period. Since the last membership fee increase, the Company has transformed its business with a relentless focus on delivering value to members. Today’s announcement allows the Company to invest in an even stronger value proposition for its 7.5 million member base, which continues to grow.
- Gross profit increased to $975.5 million in the third quarter of fiscal 2024 from $902.5 million in the third quarter of fiscal 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 20 basis points over the same quarter of fiscal 2023, primarily driven by the continued execution of our long-term initiatives and improved cost management. Gross profit increased to $2,815.4 million in the first nine months of fiscal 2024 from $2,679.3 million in the first nine months of fiscal 2023. Merchandise gross margin rate remained flat in the first nine months of fiscal 2024 compared to the first nine months of fiscal 2023.
- Selling, general and administrative expenses (“SG&A”) increased to $733.6 million in the third quarter of fiscal 2024 compared to $697.1 million in the third quarter of fiscal 2023. SG&A increased to $2,205.7 million in the first nine months of fiscal 2024 compared to $2,081.4 million in the first nine months of fiscal 2023. The increase in both comparative periods was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings in addition to other investments to drive strategic priorities, such as the restructuring of certain corporate functions, and an increase in accrued incentive compensation. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense. The increases in SG&A were partially offset by the net impact of legal settlements reached of approximately $20 million during the third quarter of fiscal 2024.
- Income from continuing operations before income taxes increased to $216.8 million in the third quarter of fiscal 2024 compared to $181.4 million in the third quarter of fiscal 2023. Income from continuing operations before income taxes increased to $554.5 million in the first nine months of fiscal 2024 compared to $537.4 million in the first nine months of fiscal 2023.
- Income tax expense increased to $61.0 million in the third quarter of fiscal 2024 compared to $50.9 million in the third quarter of fiscal 2023. The increase in income tax expense is primarily driven by an increase in income from continuing operations before taxes compared to the prior year period. Income tax expense decreased to $142.8 million in the first nine months of fiscal 2024 compared to $159.7 million in the first nine months of fiscal 2023. The decrease in income tax expense is primarily driven by higher tax benefits from stock-based compensation, partially offset by an increase in income from continuing operations before income taxes.
- Net income increased to $155.7 million in the third quarter of fiscal 2024 compared to $130.5 million in the third quarter of fiscal 2023. Net income increased to $411.8 million in the first nine months of fiscal 2024 compared to $377.9 million in the first nine months of fiscal 2023.
- Adjusted EBITDA increased by 13.5% to $308.3 million in the third quarter of fiscal 2024 compared to $271.7 million in the third quarter of fiscal 2023. Adjusted EBITDA increased by 4.4% to $826.0 million in the first nine months of fiscal 2024 compared to $791.4 million in the first nine months of fiscal 2023.
- Under its existing share repurchase program, the Company repurchased 679,499 shares of common stock, totaling $58.2 million, inclusive of associated costs, in the third quarter of fiscal 2024. In the first nine months of fiscal 2024, the Company repurchased 1,536,591 shares of common stock, totaling $129.3 million, inclusive of associated costs, under such program ($61.0 million remained available to purchase). This existing share repurchase program expires in January 2025. On November 18, 2024, the Company’s Board of Directors 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. This authority may be exercised from time to time and in such amounts as market conditions warrant. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements, market conditions, and other corporate liquidity requirements and priorities.
- On November 4, 2024, the Company amended its senior secured first lien term loan. The interest rate was reduced from the Secured Overnight Financing Rate (“SOFR”) plus 200 basis points per annum to SOFR plus 175 basis points per annum.
Fiscal 2024 Ending February 1, 2025 Outlook
“As we look ahead, we remain confident in our ability to drive long-term growth and shareholder value led by our continued focus on our strategic priorities,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ’s Wholesale Club. “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%. We continue to expect fiscal 2024 merchandise gross margins to remain approximately flat year-over-year. Finally, we expect fourth quarter fiscal 2024 adjusted EPS to range from $0.78 to $0.88, bringing the full year fiscal 2024 range to $3.90 to $4.00.”
On August 22, 2024, the Company previously guided to fiscal 2024 comparable club sales, excluding the impact of gasoline sales, at the high end of a 1% to 2% year-over-year growth range; fiscal 2024 merchandise gross margins to be approximately flat year-over-year; and fiscal 2024 adjusted EPS potentially toward the low end of a $3.75 to $4.00 range.
About BJ’s Wholesale Club Holdings, Inc.
BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) is a leading operator of membership warehouse clubs focused on delivering significant value to its members and serving a shared purpose: “We take care of the families who depend on us.” The Company provides a wide assortment of fresh foods, produce, a full-service deli, fresh bakery, household essentials and gas. In addition, BJ’s offers the latest technology, home decor, apparel, seasonal items and more to deliver unbeatable value to smart-saving families. Headquartered in Marlborough, Massachusetts, the Company pioneered the warehouse club model in New England in 1984 and currently operates 247 clubs and 182 BJ’s Gas® locations in 20 states. For more information, please visit us at www.bjs.com.
