BJ's Wholesale Club Holdings, Inc. Q4 FY2025 earnings call

Bob mentioned closing fiscal 2025 with strong momentum, growing membership by over 500,000, opening 14 new clubs (most in a year), and digital sales penetration at 16%. Laura discussed financial highlights like net sales growth, membership fee income increase, gross margin changes, SG&A expenses, adjusted EBITDA, and balance sheet details. They also highlighted team efforts in serving members during winter storm Fern, new club openings, and digital capabilities progress.

Merchandise comparable club sales growth was 2.6%, with perishables, grocery, and sundries division comps up 2.3% driven by unit growth and improved assortment/merchandising. General merchandise and services comps increased 4.3% due to merchandise mix changes. Membership fee income rose 10.9% to ~$129.8 million. Net sales for Q4 were ~$5.4 billion, up 5.5% y-o-y. Total comparable club sales including gasoline rose 1.6%, with fuel prices down mid-single digits y-o-y. Excluding gas, merchandise comparable sales grew 2.6%. Inventory levels increased 3.1% y-o-y in absolute terms, down 2% per club, and in-stock levels improved ~40 basis points.

For fiscal 2026, expects comparable sales excluding gas to grow 2%-3%, and adjusted EPS of $4.40-$4.60. SG&A expected to slight deleverage due to accelerated new club openings. Plan to invest in supply chain, membership, merchandising, digital capabilities. Effective tax rate expected to be ~27% for the year, with lowest rate in Q1 due to stock compensation windfall. Not contemplating impact of recent tariff news and macro uncertainty on current assumptions.

Q: About merchandise margins down 50 basis points, what drove it?

A: Mix towards general merchandise, with consumer electronics good but home and seasonal tough due to tariffs.

Q: How long can club openings continue?

A: Have a robust pipeline, new clubs performing well with high membership and renewal rates.

Q: Impact of winter storm Fern on comps?

A: Slight positive to quarter with build-up before and slight negative after, some downside leaked into February.

Q: Membership trends and MFI increase?

A: Membership grew by 500,000, 90% renewal rates, MFI growth including fee increase.

Q: Digital growth and store fulfillment?

A: Digital growth strong with 31% growth, ~90% digital orders fulfilled from clubs, relatively unconstrained but investing to support growth.

Q: SG&A investments and merchandise margin outlook for 2026?

A: Slight SG&A deleverage due to new club ramp, merchandise margin fourth quarter low but full year flat, continue managing business for value.

Q: Texas ramp and supply chain challenges?

A: Engagement in Texas strong, using existing distribution infrastructure and hyper local support, investing in market.

Q: General merchandise variability and fresh/future catalysts?

A: General merchandise mix varied, fresh 2.0 still showing gains, home and seasonal as long-term growth, merchandising team working on improvements.

Q: Inventory thoughts?

A: Inventory in great shape, general merchandise more aggressive in buying this year to support new clubs and growth.