Introduction
Good morning, everyone. Thank you for joining us. We are thrilled to report exceptional results for the fourth quarter of fiscal 2024, where both comps and profits exceeded expectations. This year marked another milestone for BJ’s Wholesale Club with record-breaking net sales, unprecedented membership growth, and adjusted earnings per share.
Membership and Engagement
Our consistent strategy resulted in increased traffic and market share gains at both our clubs and gas stations. The outstanding performance is largely credited to our team’s dedication to offering exceptional value and their excellent execution of strategic priorities. Membership has reached an all-time high with over 7.5 million members and a renewal rate of 90%. Our innovative merchandising initiatives and digital conveniences have boosted member engagement, and our new club performance indicates the strength of our expansion strategy.
Business Investments and Growth
Our business investments are yielding positive returns and strengthen our belief in long-term growth. During the fourth quarter, comparable club sales, excluding gas sales, grew by 4.6%, with traffic contributing over 3 percentage points. This marks the 12th consecutive quarter of traffic growth. Enhanced units led to increased basket sizes, with our perishables, grocery, and sundries division growing by over 4% in Q4, driven primarily by strong performance in perishables.
Division Performance
Our general merchandise and services division outpaced consumables for the first time since the pandemic, with over 5% growth in the fourth quarter. Successful initiatives in gifting categories and consumer electronics, led by video games, tablets, and audio, resulted in high single-digit comps despite industry softness. Toys and apparel also saw significant growth fueled by improved assortments, indicating continued progress in our general merchandise strategies.
Strategic Priorities
Our long-term growth is rooted in four strategic priorities: enhancing member loyalty, creating unbeatable shopping experiences, delivering convenience, and expanding our footprint. Our credit card enhancements, gas discounts for Club Plus members, and additions such as two free same-day deliveries each year have been instrumental in growing our overall member count.
Impacts of Fresh 2.0
We observed a positive impact from our Fresh 2.0 initiative, which increased demand for produce, leading to double-digit comps in produce over recent quarters. This success highlights our efforts in gaining control of our perishable supply chain, logistics, team training, club presentation, and marketing. This initiative not only validates our work in produce but also has positively influenced overall member behavior.
Digital and Expansion Efforts
Our digital conveniences have continued to drive double-digit growth, with a 26% increase year over year in the fourth quarter. Our members enjoy multiple options like BOPIC, curbside pickup, and same-day delivery, with about 60% engaging digitally. We are also seeing growth in our real estate strategy, having opened several new clubs and gas stations to expand our reach.
We recently celebrated the opening of our 250th club in Louisville, Kentucky and anticipate further club openings in several new locations in the coming weeks. Our growth agenda remains robust, and we aim to open 25 to 30 clubs across the next two fiscal years. This growth is backed by strong performances, especially from clubs opened since 2020.
Future Projections and Conclusion
Our forward-looking strategy includes entering the Dallas-Fort Worth region in 2026, a market rife with potential due to its growth and demographic landscape. While consumer sentiments remain value-conscious and discretionary spending is scrutinized, BJ’s aims to be the go-to shopping destination, ensuring our growth momentum continues into fiscal 2025 and beyond.
Despite potential uncertainties ahead, including economic and geopolitical challenges affecting costs, we remain optimistic about our business’s inherent strengths. Our focus on key priorities will continue to provide exceptional member value and ongoing traffic and market share gains. I express gratitude towards our dedicated team members who fulfill our purpose of supporting family needs every day. We are excited about the continued journey of growth together. Thank you for your continued support of BJ’s Wholesale Club.
Financial Overview
Laura Felice, our CFO, shared more on our financials, revealing a quarterly net sales increase to $5.1 billion, with significant contributions from membership and digital sales. As we continue into fiscal-year 2025, BJ’s will leverage strategies supporting low to mid-single-digit growth while being mindful of potential big-picture economic impacts. Additionally, our capital expenditures are set to enhance our footprint, focusing on new club builds and a new highly automated distribution center.
