BJ's Wholesale Club Holdings, Inc., a prominent membership warehouse retailer, is poised to unveil its Q4 earnings tomorrow morning, accompanied by an earnings call thereafter. Analysts anticipate earnings per share (EPS) of $1.06 and revenue of $5.39 billion. Notably, comparable club sales remain pivotal, especially after last quarter's flat performance, excluding gasoline sales impact.
Investors keenly await signs of robust growth from BJ's, especially considering the notable sales uptick witnessed by its larger counterpart, Costco, particularly in consumer electronics, jewelry, and appliances. However, BJ's lower-income member base faces challenges stemming from waning government stimulus effects and persistent inflation pressures.
Despite these challenges, BJ's has demonstrated solid membership growth, with a 6.6% increase in membership fee income last quarter. The company's strategy of gaining market share against grocery chains by offering bulk items at value prices has been paying off, evident in the 2% growth in comps for grocery, perishables, and sundries in Q3.
Moreover, BJ's has seen an enhancement in merchandise gross margin, expanding by 70 basis points over the first nine months of FY23, attributed to improved inventory management and moderating supply chain costs. Investors anticipate BJ's to provide initial EPS and comp guidance for FY25, with expectations of at least $4.00 in EPS.
The stock has exhibited notable strength leading up to tomorrow's report, rallying approximately 13% since the start of February. Consequently, BJ's will need to deliver a robust performance to sustain this momentum.
BJ's Wholesale Club Holdings, Inc. operates warehouse clubs primarily on the eastern half of the United States, offering a wide range of products including perishables, general merchandise, and gasoline, alongside various ancillary services. The company's products are available through its websites and mobile app.