BJ's Wholesale Club: Q3 Earnings Surge, Membership Fees Rise, and Buyback Program Launched
Thursday, Nov 21, 2024 2:11 pm ET
4min read BJ's Wholesale Club (BJ) reported a strong third quarter, with earnings and membership income surpassing expectations. The warehouse retailer also announced a membership fee increase and a new stock buyback program, signaling a confident outlook for the company.
**Q3 Earnings Beat Estimates**
BJ's Wholesale Club reported $5.1 billion in revenue for the quarter, up about 3% year-over-year and just shy of the $5.11 billion analysts had projected. Net income rose by nearly 20% from last year to $155.75 million, exceeding the $124.09 million analysts had estimated. Comparable store sales rose by 1.5% in the quarter, driven by a 3.8% increase in same-store sales excluding gasoline.
**Membership Fee Increase**
BJ's announced that its membership fees will increase to $60 and $120 for the Club and Club+ memberships, respectively, effective January 1, 2025. This is the first fee increase in seven years and follows a similar move by rival Costco. The company stated that the higher fees will allow it to invest in an even stronger value proposition for its 7.5 million member base.
**New Stock Buyback Program**
The company's board approved a new $1 billion stock buyback program, which will run through January 2029. This initiative allows BJ's to repurchase up to $1 billion of its outstanding common stock, potentially reducing the number of shares available in the market and increasing the value of each share.
**Outlook and Stock Performance**
For the full fiscal year, BJ's expects comparable sales growth, excluding the impact of sales at its gas stations, to be between 2.3% and 2.4%. The company also raised its full-year adjusted earnings per share (EPS) guidance to between $3.90 and $4.00 per share. Shares of BJ's were up more than 6% to $91.42 in early trading Thursday, following the earnings report and announcements.
BJ's Wholesale Club's strong Q3 earnings, coupled with the membership fee increase and new buyback program, indicate a positive outlook for the company. The fee hike, while potentially deterring some price-sensitive customers, is likely to be offset by the strong value proposition offered by the club. The buyback program signals confidence in the company's future prospects and may boost shareholder value. As BJ's continues to invest in its value proposition and expand its membership base, investors can expect the company to maintain its competitive edge in the warehouse retail sector.
**Q3 Earnings Beat Estimates**
BJ's Wholesale Club reported $5.1 billion in revenue for the quarter, up about 3% year-over-year and just shy of the $5.11 billion analysts had projected. Net income rose by nearly 20% from last year to $155.75 million, exceeding the $124.09 million analysts had estimated. Comparable store sales rose by 1.5% in the quarter, driven by a 3.8% increase in same-store sales excluding gasoline.
**Membership Fee Increase**
BJ's announced that its membership fees will increase to $60 and $120 for the Club and Club+ memberships, respectively, effective January 1, 2025. This is the first fee increase in seven years and follows a similar move by rival Costco. The company stated that the higher fees will allow it to invest in an even stronger value proposition for its 7.5 million member base.
BJ Total Revenue YoY, Total Revenue
**New Stock Buyback Program**
The company's board approved a new $1 billion stock buyback program, which will run through January 2029. This initiative allows BJ's to repurchase up to $1 billion of its outstanding common stock, potentially reducing the number of shares available in the market and increasing the value of each share.
**Outlook and Stock Performance**
For the full fiscal year, BJ's expects comparable sales growth, excluding the impact of sales at its gas stations, to be between 2.3% and 2.4%. The company also raised its full-year adjusted earnings per share (EPS) guidance to between $3.90 and $4.00 per share. Shares of BJ's were up more than 6% to $91.42 in early trading Thursday, following the earnings report and announcements.
BJ's Wholesale Club's strong Q3 earnings, coupled with the membership fee increase and new buyback program, indicate a positive outlook for the company. The fee hike, while potentially deterring some price-sensitive customers, is likely to be offset by the strong value proposition offered by the club. The buyback program signals confidence in the company's future prospects and may boost shareholder value. As BJ's continues to invest in its value proposition and expand its membership base, investors can expect the company to maintain its competitive edge in the warehouse retail sector.
