BJ's Wholesale Surpasses Q4 Earnings Expectations as Strong Membership Fuels Expansion

BJ’s Wholesale Club Holdings, Inc. Delivers Strong Q4 Performance

BJ’s Wholesale Club Holdings, Inc. reported impressive results for the fourth quarter of fiscal 2025, with both revenue and earnings exceeding analyst expectations and showing growth compared to the previous year. The company’s performance was fueled by robust membership growth, increased digital activity, and higher store traffic. Leadership emphasized that record-high membership and ongoing expansion of club locations played a significant role in these positive results.

Key Highlights from the Fourth Quarter

Adjusted earnings per share reached $0.96, surpassing the consensus estimate of $0.93 and marking a 3.2% increase year over year. This improvement was attributed to effective cost controls and consistent operational strength.

Total revenue climbed to $5.58 billion, up 5.6% from the same period last year and ahead of projections. Net sales rose 5.5% to $5.45 billion, while income from membership fees jumped 10.9% to $129.8 million, reflecting successful member recruitment, retention, and growth in premium memberships.

Comparable club sales grew 1.6% year over year, slightly below internal forecasts, but when excluding gasoline, comparable sales increased 2.6% thanks to higher foot traffic and member engagement. Digital sales saw a remarkable 31% increase, building on a two-year cumulative growth of 57%, highlighting the popularity of services like buy-online-pickup-in-club, same-day delivery, and ExpressPay.

BJ’s Wholesale Club Holdings, Inc. Price, Consensus and EPS Surprise

Margin Performance Overview

Gross profit increased to $1.01 billion from $949 million a year earlier. However, the merchandise gross margin rate, excluding gasoline and membership fees, declined by about 50 basis points due to changes in product mix.

Operating income was $178.1 million, a slight decrease of 0.2% year over year. Adjusted EBITDA rose 0.7% to $266.5 million, reflecting steady execution.

SG&A expenses grew to $818.2 million from $758.2 million, driven by higher labor, occupancy, and operational costs associated with new club and gas station openings, as well as increased depreciation from a larger number of owned locations.

Membership Growth and Club Expansion

BJ’s Wholesale Club continued to strengthen its membership base, maintaining a 90% renewal rate among long-term members and achieving significant growth in membership fee income, supported by a fee increase implemented in January 2025.

During the quarter, the company opened seven new clubs and seven gas stations, bringing its total to 263 clubs and 199 gas stations across 21 states. Looking ahead, BJ’s plans to open 25 to 30 new clubs over fiscal years 2025 and 2026 combined, underscoring its commitment to expansion.

Financial Position at Year-End

At the close of fiscal 2025, BJ’s Wholesale Club reported $46.2 million in cash and cash equivalents and $399.1 million in long-term debt. Shareholders’ equity stood at $2.2 billion.

Net cash from operating activities for the quarter was $391 million, and adjusted free cash flow was approximately $189.9 million. The company continues to invest in growth initiatives, including new distribution centers.

In the fourth quarter, BJ’s repurchased 1.26 million shares for $117.7 million. For the full year, 2.6 million shares were bought back for $252.4 million, with $749.7 million remaining under the current authorization.

Fiscal 2026 Outlook

For fiscal 2026, BJ’s expects comparable club sales (excluding gasoline) to rise between 2% and 3% year over year. Adjusted earnings per share are projected to be in the range of $4.40 to $4.60, compared to $4.40 in fiscal 2025.

Capital expenditures are anticipated to total around $800 million, reflecting ongoing investments in new club openings, supply chain improvements, and distribution network enhancements.

Over the past three months, BJ’s shares have gained 7.6%, while the broader consumer staples industry has advanced 13.2%.

Other Noteworthy Investment Opportunities

• Mama's Creations, Inc. (MAMA): Specializing in fresh deli-prepared foods, Mama’s Creations currently holds a top Zacks Rank #1 (Strong Buy). The company is expected to achieve sales growth of 39.9% and earnings growth of 44.4% for the current fiscal year, with a four-quarter average earnings surprise of 133.3%.
• Ollie's Bargain Outlet Holdings, Inc. (OLLI): This leading off-price retailer, with a Zacks Rank #2 (Buy), has delivered an average earnings surprise of 5.2% over the past four quarters. Current year sales and EPS are projected to grow by 16.8% and 17.7%, respectively.
• Boot Barn Holdings, Inc. (BOOT): As a premier retailer of western and work-related apparel and footwear, Boot Barn also carries a Zacks Rank #2. The company has posted an average four-quarter earnings surprise of 4.9%, with anticipated sales and EPS growth of 17.6% and 26% for the current fiscal year.

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