BJ's Wholesale Club Holdings, Inc. Q4 FY2024 earnings call

• Bob mentioned that fiscal 2024 was a milestone year with record net sales, membership, and adjusted earnings per share. Membership is at an all-time high with a 90% renewal rate. - Merchandising initiatives and digital conveniences are driving member engagement. The fresh initiatives have boosted produce demand. - The new club performance is proof of the accelerating expansion strategy, with seven new clubs and 12 gas stations opened in fiscal 2024. - Digitally enabled comp sales have grown double-digit each year for the past four years, with 60% of members engaging digitally.

In the fourth quarter, net sales were $5.1 billion, increasing 5.4% year-over-year on a comparable 13-week basis. Merchandise comp sales, excluding gas sales, grew by 4.6% year-over-year, led by traffic. Total comparable club sales including gas sales grew 4% year-over-year. Digitally enabled comp sales for the fourth quarter grew 26% year-over-year. Membership fee income grew 7.9% to approximately $117 million. Perishables, grocery and sundries division delivered over 4% comp growth in the fourth quarter, with perishables leading the way. General merchandise and services division comps grew by more than 5% in the fourth quarter. Membership is at an all-time high above 7.5 million members with a 90% renewal rate.

• Expect fiscal 2025 comp sales excluding gas to grow 2% to 3.5%. - Membership fee income is expected to outpace the mid-single digit growth goal due to the fee increase. - Adjusted EPS is expected in the $4.10 to $4.30 range. - Plan for an effective tax rate of approximately 27% for the year, with the lowest rate in the first quarter.

• Tariffs could raise prices for Americans and disrupt supply chains, running counter to BJ's purpose of delivering value to members. - Consumer uncertainty and unpredictability in the economy pose risks to the business.

Q: Could you provide more color around the cadence of the comp throughout the fourth quarter and how you're looking at 2025 given the implied slowdown?

A: Bob said the comp cadence through November, December were very good months, January was the strongest month. Laura mentioned the first half of 2025 will be a little stronger than the second half.

Q: Can you remind us how you managed tariffs last time and why it could be similar or different this time? And what's driving the strength of digital?

A: Bob said tariffs may raise prices and disrupt supply chains, but BJ's has robust muscle to deal with inflation in COGS. Laura added 90% of digital business is fulfilled through clubs.