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Bj's Wholesale Club Holdings (BJ)
NYSE:BJ
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Bj's Wholesale Club Holdings
(NYSE:BJ)
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Rating:68Neutral
Price Target:
$107.00
▲(10.54% Upside)
Action:DowngradedDate:03/06/26
The score is driven primarily by solid (but not exceptional) financial fundamentals with thin margins and weaker free-cash conversion, partially offset by a constructive earnings outlook emphasizing membership/digital strength, expansion execution, and buybacks. Technicals are broadly neutral, while valuation (P/E ~23.9 with no dividend yield provided) provides limited downside support.
Positive Factors
High-quality recurring membership revenue
A large, growing membership base with a stable 90% tenured renewal rate and rising fee income creates durable, predictable recurring revenue. High renewal and higher-tier penetration (42%) increase customer lifetime value and cushion core cash flow versus transactional retail swings.
Strong digital penetration and club fulfillment
Accelerating digital sales and in-club fulfillment leverage existing real estate to boost frequency and convenience, lowering incremental fulfillment costs. This omni-channel capability is structural, supports member retention, scales with new clubs, and strengthens competitive differentiation vs. pure-play rivals.
Improving leverage and cash returns
Low net leverage and active buybacks reflect stronger capital flexibility. Continued debt paydown and real estate ownership improve balance-sheet optionality, enabling sustained investment in expansion and supply chain while keeping capacity for shareholder returns and downside protection in tougher cycles.
Negative Factors
Thin operating margins
EBIT margins near 3% leave limited room to absorb input inflation, wage pressure, or deliberate price investments. With low structural margins, small adverse mix or cost moves can materially depress earnings, making profitability highly sensitive to execution over the medium term.
Weak free-cash conversion
Subpar FCF conversion versus net income signals working-capital and reinvestment drain. High planned FY26 capex (~$800M) and aggressive new-club rollout raise the risk that discretionary returns (buybacks, debt paydown) could be constrained if cash conversion weakens or capex timing slips.
Margin mix pressure and tariff exposure
A shift into lower-margin categories and deliberate price investments compress gross margins; combined with management's cited tariff/geopolitical uncertainty, this mix and supply risk can persistently weigh on margin sustainability and make forecasts more volatile across inventory cycles.
Bj's Wholesale Club Holdings (BJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.67B
Dividend YieldN/A
Average Volume (3M)1.93M
Price to Earnings (P/E)21.0
Beta (1Y)0.07
Revenue Growth2.82%
EPS Growth3.77%
CountryUS
Employees33,000
SectorConsumer Defensive
Sector Strength42
IndustryDiscount Stores
Share Statistics
EPS (TTM)0.96
Shares Outstanding130,847,720
10 Day Avg. Volume2,001,601
30 Day Avg. Volume1,932,110
Financial Highlights & Ratios
PEG Ratio2.29
Price to Book (P/B)5.52
Price to Sales (P/S)0.57
P/FCF Ratio36.64
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue0.71
Enterprise Value/Gross Profit3.83
Enterprise Value/Ebitda13.69
Forecast
1Y Price Target
$103.23Price Target Upside6.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)4.55
Revenue Forecast (FY)$22.72B
Bj's Wholesale Club Holdings Business Overview & Revenue Model
Company DescriptionBJ's Wholesale Club Holdings, Inc., together with its subsidiaries, operates warehouse clubs on the east coast of the United States. It provides perishable, general merchandise, gasoline, and other ancillary services. The company sells its products through the websites BJs.com, BerkleyJensen.com, Wellsleyfarms.com, and Delivery.bjs.com as well as the mobile app. As of June 10, 2022, it operated 229 warehouse clubs and 160 gas locations in 17 states. The company was formerly known as Beacon Holding Inc. and changed its name to BJ's Wholesale Club Holdings, Inc. in February 2018. BJ's Wholesale Club Holdings, Inc. was founded in 1984 and is headquartered in Westborough, Massachusetts.
How the Company Makes MoneyBJ's Wholesale Club generates revenue primarily through membership fees and product sales. Membership fees are a significant revenue stream, as customers must pay an annual fee to shop at BJ's clubs, which provides access to discounted prices on bulk items. The company also earns money through the sale of a wide range of products, including consumables, perishables, and general merchandise. BJ's leverages strategic partnerships with suppliers to offer exclusive products and competitive pricing, enhancing its value proposition. Additionally, ancillary services such as the BJ's gas stations and online ordering for delivery or curbside pickup contribute to its earnings by attracting more customers and increasing overall sales volume.
Bj's Wholesale Club Holdings Key Performance Indicators (KPIs)
Any
Revenue by Type
Categorizes revenue streams, offering a view of the company's diverse income sources and identifying which areas drive growth or present risks.
Categorizes revenue streams, offering a view of the company's diverse income sources and identifying which areas drive growth or present risks.
Data provided by:
The Fly
The FlyBj's Wholesale Club Holdings Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 21, 2026
Earnings Call Sentiment Positive
The call reflected solid top-line growth, strong membership gains, accelerating digital adoption, successful new-club openings, and a healthy balance sheet with active buybacks — all indicating positive momentum and confident long-term execution. Offsetting items included modest margin pressure (mix and deliberate price investments), slight SG&A deleverage tied to expansion, category variability (home/seasonal), and macro/tariff uncertainties that could affect near-term cadence. Overall the positives (membership growth, digital penetration, new-club performance, and cash generation) meaningfully outweigh the headwinds.Q4-2025 Updates
Positive Updates
Revenue Growth
Q4 net sales of ~$5.4B, up 5.5% year-over-year.
Comparable Club Sales and Traffic
Total comparable club sales (including gasoline) rose 1.6% in Q4; merchandise comparable sales excluding gas increased 2.6%. The company reported its 13th consecutive quarter of market share gains and 16th consecutive quarter of traffic growth.
Membership Expansion and Quality
Membership base grew by more than 500,000 members in the year to a new high of over 8.0M members. Tenured renewal rate remained at 90% for the fourth consecutive year; higher-tier penetration increased to 42%. Membership fee income rose 10.9% to roughly $129.8M in Q4.
Digital Adoption
Digitally enabled sales penetration reached 16% of sales; digitally enabled sales grew 31% in the quarter. Digital business posted record single-day sales on Black Friday and then again on Cyber Monday. Over 90% of digital orders are fulfilled from clubs.
New Club Expansion
Opened 14 new clubs in fiscal 2025 (7 in Q4), the most in a single year; new-club performance (sales, membership, profit) is delivering well above expectations. Company remains on track to open 25–30 new clubs over 2025–2026.
Profitability and Cash Returns
Q4 adjusted EBITDA increased 1% to $266.5M. Adjusted EPS for the full year was $4.40 (reaching the high end of revised guidance); Q4 adjusted EPS was $0.96, up 3.2% year-over-year. Over three years the company reported $3.3B in adjusted EBITDA and $2.6B in operating cash flow.
Capital Allocation and Balance Sheet Strength
Net leverage ended at 0.4x. During the year repurchased ~2.6M shares for ~$252.4M (Q4 buybacks ~1.3M shares for $117.7M) with ~$750M remaining authorization. Paid down well over $300M of debt and added ~ $500M of owned real estate.
Inventory and In-Stock Improvements
Total inventory up 3.1% year-over-year in absolute terms but down ~2% on a per-club basis; in-stock levels improved by ~40 basis points versus last year, indicating better merchandising and supply execution.
Forward Guidance
Fiscal 2026 guidance: comparable sales excluding gas expected to grow 2%–3%; adjusted EPS guidance of $4.40–$4.60; planned effective tax rate ~27% and continued investments in club growth and digital/supply chain capabilities.
Negative Updates
Merchandise Margin Pressure
Merchandise gross margin rate (excluding gasoline) declined approximately 50 basis points year-over-year in Q4, primarily driven by mix shift toward general merchandise and consumer electronics (lower-margin categories) and by deliberate price/value investments in grocery.
Modest Profitability Gains in Q4
Q4 adjusted EBITDA increased only 1% year-over-year and Q4 adjusted EPS grew 3.2% — both modest improvements, reflecting margin and investment pressures despite sales growth.
SG&A Deleverage and Higher Depreciation
SG&A totaled $818.2M in Q4 and showed slight deleverage as a percentage of sales due to accelerated new-club openings and continued strategic investments; heavier depreciation expected as new clubs come online.
Weakness in Home and Seasonal Categories
Home and seasonal merchandise remained a drag on general merchandise results in Q4, contributing to mix-driven margin decline and being more exposed to tariff-related inventory cuts.
Tariff and Macro Uncertainty
Management cited tariff-related and geopolitical uncertainties and did not model potential tariff impacts into current assumptions. Tariffs could influence inflation, consumer demand, and results in 2026.
Weather-Related Volatility
Winter storm Fern drove significant stock-up activity (noted as a slight net positive for Q4) but also produced post-storm declines and some negative carryover into February/Q1, introducing near-term cadence volatility.
Inventory Posture for Discretionary
After a conservative posture last year on discretionary buys due to tariff risk, the company is being slightly more aggressive this year. While planned, incremental discretionary inventory purchases raise execution and assortment risk if consumer demand or tariffs shift.
Company Guidance
Management guided fiscal 2026 to merchandise comparable sales excluding gas growth of 2%–3% and adjusted EPS of $4.40–$4.60, with an expected effective tax rate of ~27% for the year (lowest in Q1 due to a stock‑comp windfall); they expect slight SG&A deleverage driven by accelerated new‑club openings and continued outsized depreciation, remain on track to open 25–30 new clubs over 2025–2026, and noted net leverage of 0.4x and roughly $750 million remaining under the share‑repurchase authorization. They also said membership fee income growth should moderate as they lap the January 2025 fee increase, plan further supply‑chain investments (including an automated Ohio DC in 2027), and are not modeling potential tariff impacts into current assumptions.Bj's Wholesale Club Holdings Financial Statement Overview
Summary
Overall financials are sound with modest revenue growth and steady profitability, plus improving leverage over time. Offsets are structurally thin operating margins (EBIT ~3%) and weaker free-cash conversion (FCF only ~28% of net income), which can reduce resilience if costs rise or pricing intensifies.Income Statement
TTM (Trailing-Twelve-Months) revenue is $21.46B, up about 1.4% versus the prior period, indicating continued but modest top-line growth after stronger expansion earlier in the history. Profitability is steady for the model: gross margin is ~18.6% and net margin is ~2.7%, with net income of ~$578M. The key watch-out is that operating profitability remains thin (EBIT margin ~3.0%), leaving results more sensitive to cost pressures and competitive pricing.74
Positive
Balance Sheet
Leverage is meaningful but improving: total debt is ~$2.61B against equity of ~$2.50B in TTM (Trailing-Twelve-Months), bringing debt-to-equity to ~1.05 versus much higher levels in prior years. Equity has built materially over time, which strengthens the cushion under the capital structure. Returns on equity remain solid (~26% in TTM), but the company still carries enough debt that balance-sheet flexibility could tighten if operating conditions weaken.68
Positive
Cash Flow
Cash generation is positive with TTM (Trailing-Twelve-Months) operating cash flow of ~$1.03B and free cash flow of ~$337M, and free cash flow growth is strong versus the prior year. The main weakness is conversion: free cash flow is only ~28% of net income in TTM, suggesting higher reinvestment needs and/or working-capital drag, which can make discretionary cash less consistent. Overall, cash flow supports operations, but the quality/translation into free cash is not as strong as top-tier retailers.62
Positive
| Breakdown | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.46B | 20.50B | 19.97B | 19.32B | 16.67B |
| Gross Profit | 4.00B | 3.76B | 3.64B | 3.43B | 3.08B |
| EBITDA | 1.13B | 1.03B | 1.03B | 933.26M | 788.68M |
| Net Income | 578.38M | 534.42M | 523.74M | 513.18M | 426.65M |
Balance Sheet | |||||
| Total Assets | 7.51B | 7.07B | 6.68B | 6.35B | 5.67B |
| Cash, Cash Equivalents and Short-Term Investments | 46.24M | 28.27M | 36.05M | 33.91M | 45.44M |
| Total Debt | 2.61B | 2.84B | 2.98B | 3.12B | 2.96B |
| Total Liabilities | 5.31B | 5.22B | 5.22B | 5.30B | 5.02B |
| Stockholders Equity | 2.20B | 1.85B | 1.46B | 1.05B | 648.11M |
Cash Flow | |||||
| Free Cash Flow | 331.00M | 312.89M | 251.81M | 417.63M | 527.14M |
| Operating Cash Flow | 1.03B | 900.87M | 718.88M | 788.16M | 831.65M |
| Investing Cash Flow | -702.34M | -589.57M | -454.76M | -747.06M | -304.51M |
| Financing Cash Flow | -309.74M | -319.08M | -261.98M | -52.63M | -525.23M |
Bj's Wholesale Club Holdings Technical Analysis
Negative
96.80
Price Trends
95.68
Positive
93.83
Positive
98.93
Negative
Market Momentum
0.70
Positive
47.30
Neutral
62.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BJ, the sentiment is Negative. The current price of 96.8 is below the 20-day moving average (MA) of 99.06, above the 50-day MA of 95.68, and below the 200-day MA of 98.93, indicating a neutral trend. The MACD of 0.70 indicates Positive momentum. The RSI at 47.30 is Neutral, neither overbought nor oversold. The STOCH value of 62.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BJ.
Bj's Wholesale Club Holdings Risk Analysis
Bj's Wholesale Club Holdings disclosed 51 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $443.03B | 55.55 | 29.65% | 0.59% | 8.34% | 9.58% | |
73 Outperform | $986.71B | 43.44 | 22.97% | 0.85% | 4.34% | 17.27% | |
73 Outperform | $6.68B | 40.13 | 12.96% | ― | 12.58% | 7.80% | |
73 Outperform | $32.21B | 19.21 | 16.45% | 1.88% | 4.86% | -4.51% | |
68 Neutral | $12.67B | 20.97 | 28.60% | ― | 2.82% | 3.77% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $23.03B | 20.60 | 20.07% | ― | -39.27% | -182.36% |
* Consumer Defensive Sector Average
BJ
Bj's Wholesale Club Holdings
96.80
-18.58
-16.10%
COST
Costco
998.10
68.78
7.40%
DG
Dollar General
146.31
65.30
80.60%
DLTR
Dollar Tree
115.79
48.35
71.69%
WMT
Walmart
123.80
36.81
42.32%
OLLI
Ollie's Bargain Outlet Holding
108.92
10.15
10.28%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.