BJ's Wholesale Membership and Digital Strategies Drive Growth

BJ's Wholesale Club Holdings, Inc. BJ continues to demonstrate strong performance, fueled by its strategic focus on membership growth and digital innovations. The company’s results for fiscal 2024 reflect its commitment to enhancing member loyalty, refining product assortments, improving digital capabilities and expanding its club network — all of which are crucial for driving growth.

Membership Growth Fuels BJ’s Momentum

BJ’s Wholesale has long recognized that membership is the cornerstone of its business model. In the fourth quarter of fiscal 2024, the company reported an all-time high in membership, surpassing 7.5 million members. This milestone was complemented by a solid renewal rate of 90%, demonstrating the strength of BJ's value proposition. In the fourth quarter of fiscal 2024, BJ’s reported a 7.9% year-over-year increase in membership fee income.

Key to this is BJ’s multifaceted membership strategy. Over the past few years, the company has enhanced its offerings by improving its credit card program, introducing a gas discount for Club Plus members and adding more benefits, such as two free same-day deliveries annually for Plus members. As a result, higher-tier membership penetration has now reached nearly 40%, solidifying the company’s membership base.

BJ's value-driven model continues to resonate with members, particularly in today’s inflationary environment. The company offers up to 25% better pricing than its grocery competitors, a significant advantage that appeals to value-conscious consumers. By maintaining its pricing edge while offering a curated assortment, BJ’s delivers exceptional value across various categories, from perishables to general merchandise.

Shares of this Zacks Rank #3 (Hold) company have advanced 30.8% in the past three months compared with the industry’s growth of 5.7%.

BJ’s Digital Transformation Drives Engagement

BJ’s Wholesale has made significant strides in enhancing its digital capabilities, a move that has paid off handsomely. In the fourth quarter of fiscal 2024, digitally enabled comparable sales grew 26% year over year, contributing substantially to overall sales growth. The company has embraced various digital conveniences such as BOPIC (Buy Online, Pick Up In Club), curbside pickup, and same-day delivery, all of which are designed to streamline the shopping experience and drive engagement.

The BJ’s mobile app, which is now used by 60% of members, has become an integral part of the company’s digital strategy. Members can use the app to clip coupons, navigate stores and utilize features like Express Pay Checkout, making the in-store experience more efficient. Additionally, the app’s personalization features, including product recommendations and AI-powered shopping lists, keep members engaged between visits, enhancing their overall experience and boosting loyalty.

BJ’s Expanding Footprint

BJ’s Wholesale is also making substantial progress on its real estate strategy, with the opening of seven new clubs and 12 gas stations in fiscal 2024. The company plans to open between 25 to 30 new clubs over the next two fiscal years, bolstering its expansion efforts in both existing and adjacent markets.

Final Thoughts on BJ

BJ’s Wholesale’s impressive membership and digital strategies have proven highly effective in driving growth. With a focus on delivering exceptional value, enhancing the shopping experience, and expanding its digital and physical footprint, the company is well-positioned to maintain its momentum. As part of its long-term financial targets, BJ’s Wholesale Club guided total revenue growth of a mid-single-digit percentage. The company also projected a low-to-mid single-digit percentage increase in comparable club sales, excluding the impact of gasoline sales. It expects a high-single to low-double-digit percentage increase in earnings per share in the long run.

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