Analyst Report: BJ`s Wholesale Club Hldgs In

Summary

BJ’s Wholesale Club Holdings owns BJ’s Wholesale Club, which operates a chain of warehouse clubs in the Eastern U.S. BJ’s positions itself between traditional grocery stores and warehouses like Sam’s Club and Costco, and offers a wider range of items and smaller pack sizes than Costco and Sam’s. The company posted total revenue of $20 billion in FY24, which ended on February 3, 2024. Income from membership fees represented 2.2% of total revenue and 53% of operating income. The company sells name-brand merchandise and food to members, who are small business owners and consumers. Based in Westborough, Massachusetts, the company also offers specialty services, including tire installation, optical services, and photo developing. At the end of FY24, the company operated 244 BJ’s clubs and 175 gas stations in 20 states. More than half of the clubs are in four states: New York, Florida, Massachusetts, and New Jersey. About 23% of FY24 sales were generated in the New York City metro area (down from 25% in FY21 and FY20). Clubs range from 44,000 to 177,000 square feet. BJ’s sells a relatively narrow assortment of approximately 7,000 SKUs, which it plans to trim to about 6,000 to improve inventory turnover. Groceries represented 70% of the company’s FY24 net sales (67% in FY23, 71% in FY22); general merchandise and services accounted for 11% in FY24, and 12% in FY23 and 14% in FY22 and gasoline rose to 21% in FY23 from 15% in FY22 and 9% in FY21. Gas was 19% of sales in FY24. A predecessor company, BJ’s Wholesale Club, traded as a public company until it was acquired on September 30, 2011 by an investor group led by Leonard Green & Partne