BJ's delivers Q4 earnings beat but guidance impacted by 'macro-driven uncertainty'

By James Rogers

Stock falls 1.7% in early trade

BJ's Wholesale Club Holdings Inc. reported better-than-expected fourth-quarter earnings but the membership-based warehouse retailer gave guidance at the low end of analysts estimates, citing macroeconomic uncertainty.

Shares fell 1.6% in premarket trades.

BJ's (BJ) reported fourth-quarter net income of $145.9 million, or $1.08 a share, compared with $129.8 million, or 95 cents a share, in the prior year's quarter. On an adjusted basis, BJ's earned $1.11 a share, above the FactSet consensus of $1.06 a share.

The company's fourth-quarter results included one additional week compared to the prior year's fourth quarter.

Read more: BJ's CEO says lower prices are good for you, but bad for our sales

Revenue grew 8.7% to $5.357 billion, compared with $4.93 billion in the same period last year. Analysts surveyed by FactSet were looking for revenue of $5.391 billion.

Total comparable club sales decreased by 0.4% compared with the prior year's quarter. Analysts surveyed by FactSet were looking for a decrease of 0.3%. Excluding gasoline sales, comparable club sales increased by 0.5% year-over-year led by accelerating traffic, according to BJ's.

For fiscal 2024, BJ's expects adjusted earnings between $3.75 and $4 a share, at the low end of analysts' estimates. Analysts surveyed by FactSet are looking for adjusted earnings of $4 a share.

The retailer expects comparable club sales, excluding the impact of gasoline sales, to increase 1% to 2% year-over-year. Analysts surveyed by FactSet are looking for total same-club sales to increase 1.6%.

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"As we look to fiscal 2024, we continue to navigate macro-driven uncertainty in the operating environment," Chief Financial Officer Laura Felice said in a statement. "We remain confident that our structural operating advantages, continued focus on executing our strategic priorities, and commitment to delivering great value to our members will drive strong results for our business."

BJ's executives used the conference call to discuss the results to again address the issue of lower inflation. "Inflation continued to moderate in the quarter, as it has all year," said BJ's Chief Executive Bob Eddy, who cited the broader economy, geopolitical risk, and "ongoing disinflation" as challenges in 2024.

BJ's shares have risen 10.5% in the last three months, compared with the S&P 500 index's gain of 12.2%.

-James Rogers

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03-07-24 0915ET

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