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Bj's Wholesale Club Holdings (BJ)
:BJ
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Bj's Wholesale Club Holdings
(NYSE:BJ)73Outperform
Positive Factors
Earnings
3Q24 results with a 14% EBIT beat on better MFI and gross margin are a showcase of BJ’s determination to invest in the long term health of its business.
Membership Growth
BJ's reached a 7.5 million member milestone and announced a membership fee raise, which should yield additional revenue for reinvestment.
Negative Factors
Financial Performance
Management is expected to brush Street EPS estimates down due to ongoing price investments and other cost pressures.
Bj's Wholesale Club Holdings (BJ) vs. S&P 500 (SPY)
Market Cap
$13.35B
Dividend YieldN/A
Average Volume (3M)1.55M
Price to Earnings (P/E)24.3
Beta (1Y)0.26
Revenue Growth5.32%
EPS Growth10.61%
CountryUS
Employees34,000
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)4.16
Shares Outstanding132,093,720
10 Day Avg. Volume1,763,930
30 Day Avg. Volume1,547,998
Financial Highlights & Ratios
PEG Ratio2.29
Price to Book (P/B)N/A
Price to Sales (P/S)0.64
Price to Cash Flow (P/CF)15.90
P/FCF Ratio117.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$108.71Price Target Upside7.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Bj's Wholesale Club Holdings Business Overview & Revenue Model
Company DescriptionBJ's Wholesale Club Holdings, Inc. engages in the operation of warehouse club. The company was founded on June 24, 2011 and is headquartered in Westborough, MA.
How the Company Makes MoneyBJ's Wholesale Club generates revenue primarily through the sale of goods to its members. The company's revenue model revolves around annual membership fees, which provide access to its warehouse clubs and exclusive pricing on a broad range of products. This membership model not only ensures a steady revenue stream but also fosters customer loyalty. In addition to merchandise sales, BJ's derives income from its fuel sales at on-site gas stations, which attract members with competitive pricing. The company also benefits from strategic vendor partnerships and private label offerings that enhance its product margins. Furthermore, BJ's engages in various promotional activities and partnerships that contribute to its overall earnings.
Bj's Wholesale Club Holdings Financial Statement Overview
Summary
BJ's Wholesale Club Holdings exhibits strong financial health, driven by consistent revenue growth and operational efficiency. The company maintains solid profitability margins, though leverage management remains a key focus area. Overall, the financial statements indicate a well-managed business with a positive growth trajectory, backed by effective cash flow management.Income Statement
The income statement shows a strong performance, with consistent revenue growth over multiple periods. The TTM revenue growth rate is solid, indicating healthy business expansion. Gross profit margins have remained robust, highlighting effective cost management. Net profit margins have improved, reflecting enhanced profitability. Both EBIT and EBITDA margins are stable, underscoring operational efficiency.85
Very Positive
Balance Sheet
The balance sheet reveals a moderate level of financial leverage, as evidenced by the debt-to-equity ratio. Although the equity ratio indicates a relatively lower proportion of equity financing, the return on equity demonstrates high profitability relative to equity, which is a positive sign. However, careful management of debt levels is advisable to mitigate potential risks.70
Positive
Cash Flow
Cash flow analysis indicates strong operating cash flow relative to net income, showcasing effective cash generation from operations. The free cash flow has grown steadily, supporting business reinvestments and potential debt reduction. The cash flow metrics highlight a stable cash position, though continuous focus on maintaining free cash flow growth is crucial.75
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 20.58B | 19.97B | 19.32B | 16.67B | 15.43B | 13.19B | Gross Profit |
| 3.78B | 3.64B | 3.43B | 3.08B | 2.98B | 2.43B | EBIT |
| 816.83M | 800.42M | 737.99M | 617.32M | 642.39M | 352.20M | EBITDA |
| 1.07B | 1.03B | 951.24M | 815.37M | 809.85M | 509.20M | Net Income Common Stockholders |
| 557.63M | 523.74M | 513.18M | 426.65M | 421.03M | 187.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 36.05M | 36.05M | 33.91M | 45.44M | 43.52M | 30.20M | Total Assets |
| 6.68B | 6.68B | 6.35B | 5.70B | 5.41B | 5.27B | Total Debt |
| 2.99B | 2.99B | 3.09B | 2.98B | 3.23B | 3.79B | Net Debt |
| 2.96B | 2.96B | 3.05B | 2.93B | 3.18B | 3.76B | Total Liabilities |
| 5.22B | 5.22B | 5.30B | 5.05B | 5.09B | 5.32B | Stockholders Equity |
| 1.46B | 1.46B | 1.05B | 648.11M | 319.33M | -54.34M |
| Cash Flow | Free Cash Flow | ||||
| 356.63M | 251.81M | 417.63M | 527.14M | 650.21M | 158.24M | Operating Cash Flow |
| 903.31M | 718.88M | 788.16M | 831.65M | 868.55M | 355.14M | Investing Cash Flow |
| -546.68M | -454.76M | -747.06M | -304.51M | -192.44M | -175.29M | Financing Cash Flow |
| -356.31M | -261.98M | -52.63M | -525.23M | -662.79M | -176.79M |
Bj's Wholesale Club Holdings Technical Analysis
Positive
101.09
Price Trends
98.25
Positive
94.35
Positive
89.73
Positive
Market Momentum
0.46
Positive
49.11
Neutral
24.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BJ, the sentiment is Positive. The current price of 101.09 is below the 20-day moving average (MA) of 103.83, above the 50-day MA of 98.25, and above the 200-day MA of 89.73, indicating a neutral trend. The MACD of 0.46 indicates Positive momentum. The RSI at 49.11 is Neutral, neither overbought nor oversold. The STOCH value of 24.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BJ.
Bj's Wholesale Club Holdings Risk Analysis
Bj's Wholesale Club Holdings disclosed 52 risk factors in its most recent earnings report. Bj's Wholesale Club Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bj's Wholesale Club Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $460.27B | 60.89 | 30.98% | 0.44% | 5.35% | 16.22% | |
77 Outperform | $762.93B | 39.41 | 22.33% | 0.85% | 5.07% | 25.86% | |
73 Outperform | $13.35B | 24.28 | 35.79% | ― | 5.32% | 10.61% | |
70 Outperform | $53.67B | 12.41 | 30.16% | 3.69% | 0.64% | 20.16% | |
68 Neutral | $45.51B | 16.64 | 21.45% | 1.99% | 1.41% | 46.58% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
56 Neutral | $15.67B | ― | -13.67% | ― | 5.19% | -190.36% |
* Consumer Defensive Sector Average
Performance Comparison
BJ
Bj's Wholesale Club Holdings
101.09
27.87
38.06%
COST
Costco
1,036.87
281.06
37.19%
DLTR
Dollar Tree
66.68
-82.40
-55.27%
KR
Kroger Company
63.18
14.76
30.48%
TGT
Target
117.14
-46.40
-28.37%
WMT
Walmart
94.97
35.64
60.07%
Bj's Wholesale Club Holdings Earnings Call Summary
Earnings Call Date: Nov 21, 2024 | % Change Since: 17.96% | Next Earnings Date: Mar 6, 2025
Earnings Call Sentiment Neutral
The call reflected a mix of positive trends in membership growth, market share gains, and digital sales, contrasted by challenges in merchandise sales and a cautious consumer environment. Despite some headwinds, the company's long-term strategies appear to be on track.Highlights
Strong Membership Growth
BJ's reported accelerating membership growth, with member counts growing nearly 6% year-over-year in the third quarter, reaching over 7 million members. The company also maintained a 90% renewal rate.
Market Share Gains
BJ's continued to gain market share, with third-party data showing share gains over each of the prior two quarters and the last three years. Their consumables business delivered a 2% comp in the third quarter.
Gasoline Business Performance
The gasoline business delivered comp gallon growth of nearly 3%, while industry volumes were down double digits. Profit per gallon exceeded expectations.
Digital Sales Growth
Digitally enabled comp sales grew 16% year-over-year in the third quarter, now comprising over 10% of net merchandise sales.
Adjusted EBITDA and EPS
BJ's reported third quarter adjusted EBITDA of approximately $275 million and adjusted earnings per share of $0.98, slightly better than expectations.
Lowlights
Flat Merchandise Comparable Sales
Merchandise comparable sales, excluding gas sales, were flat year-over-year, with a decrease in basket size due to disinflation.
General Merchandise Decline
General merchandise and services comp decreased by 11% in the third quarter, despite sequential improvement.
Pressure on Lower Income Members
Sales from lower income members dipped below last year levels due to waning government aid and macroeconomic pressures.
Challenging Consumer Environment
The consumer environment remained cautious, with continued disinflation and pressures on discretionary spending.
Company Guidance
During the Q3 2023 earnings call for BJ's Wholesale Club, the company provided robust guidance metrics highlighting its strategic priorities and financial performance. BJ's reported net sales growth of approximately 3%, with merchandise comparable sales remaining flat year-over-year, excluding gas sales. The company experienced a nearly 3% increase in comp gallons at its gas stations, a testament to its low-priced gas offering, while its consumables business achieved a 2% comp growth. BJ's adjusted EBITDA for the quarter was approximately $275 million, with adjusted earnings per share of $0.98. Membership fee income grew by nearly 7% to approximately $106.1 million, supported by a renewal rate projected to hold at 90%. For the fourth quarter, BJ's anticipates comp sales growth, excluding gas, to range from down 2% to positive 1%, aided by continued membership growth and strategic enhancements in general merchandise and services. The company remains confident in its long-term growth trajectory, focusing on improving member loyalty, expanding its digital footprint, and optimizing its merchandise offerings.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.