On March 7, BJ's Wholesale Club Holdings Inc. (BJ) announced results for Q4 and FY 2023 ending February 3rd 2024. The Company posted topline and EPS consistent with consensus estimates resulting in a sharp increase in share price following the Q4 release.
For the period, the company earned $145.9 million on revenue of $5,357 million with a diluted EPS of $1.10. Comparable figures for Q4 FY 2022 were net earnings of $129.8 million on revenue of $4,930 million with a diluted EPS of $0.95. For the most recent quarter, BJ’s achieved a gross margin of 16.2 percent (16.6 percent Q4, FY 2022) and an operating margin of 4.0 percent (3.9 percent Q4 FY 2022).
For FY 2023, the company earned $523.7 million on revenue of $19,969 million with a diluted EPS of $3.88. Comparable figures for FY 2022 were net earnings of $513.2 million on revenue of $19,315 million with a diluted EPS of $3.76.
During the quarter, comparable club store sales (excluding fuel) increased by 0.5 percent compared to Q4 FY 2022. Digital sales increased by 28.0 percent.
In commenting on the quarter Bob Eddy, President and Chief Executive Officer stated “We ended fiscal 2023 on a strong note. 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. We improved our merchandising and value proposition meaningfully during the year and increasingly delivered both with greater convenience through our digital offerings. We also continued to grow our chain with six new clubs since the third quarter. I’m proud of our team and our progress and look forward to more growth in the future.”
Guidance for FY 2024 included a 1 to 2 percent increase in comparable store sales; a 20 basis point improvement in gross margin with an adjusted EPS of $3.75 to $4.00.
The Company operates 244 warehouse stores with 175 fuel stations in 20 states. BJs intends to open 12 stores in FY 2024 with five announced openings in TN; SC; FL and IN.
On February 3rd 2023 BJ’s posted total assets of $6,678 million including $1,116 million in goodwill and intangibles, offset by long-term debt and lease obligations of $2,675 million. BJ's had a market capitalization of $10,060 million 0n March 28th. The company has traded over the past fifty-two weeks in a range of $60.33 to $78.97 with a 50-day moving average of $70.48. Following release of the Q4 results, BJ opened at $78.79 up 9.0 percent. Over the trailing twelve-month period, operating margin was 4.3 percent and profit margin 2.6 percent. Return on assets was 7.8 percent and return on equity, 41.8 percent.
BJ’s is a bellwether for the retail sector along with larger competitor big box warehouse clubs Costco and Sam’s. The current retail environment was characterized in the earnings call by comments that consumers are “trading down” and “more discerning.” These sentiments were expressed in recent Target and Walmart investor calls.