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BJ's Wholesale Club (BJ +12%) is trading nicely higher to a new all-time high after reporting Q4 (Jan) earnings results this morning. This warehouse club chain beat on EPS. Revenue declined 1.5% yr/yr to $5.28 bln, but that was in-line. However, the mid-point of its FY25 EPS guidance was below analyst expectations. But investors do not seem to mind. BJ expects FY25 comps (ex-fuel) to be +2.0-3.5%.

• The metric that really jumps out at us is its Q4 comps (ex-fuel) at +4.6%. This continues an impressive upward trend in recent quarters: +3.8% in Q3, +2.4% in Q2 and +0.6% in Q1. BJ has been seeing continued strength in traffic, which contributed over 3 pts to its comp. This was BJ's 12th consecutive quarter of traffic growth. Growth in units also drove increased basket size.
• BJ said its strength in perishables has been a recurring theme all year as more members make BJ their weekly destination for produce, dairy and meat. Its perishables Grocery and sundries division delivered over +4% comp growth in Q4. Its general merchandise and services division comps grew by more than +5%, outpacing its consumables business for the first time since the pandemic. BJ cited a refined and expanded assortment in its gifting categories.
• The company's expansion continues. It opened 7 new clubs and 12 gas stations in FY24, including its 250th club in Louisville at the end of Q4, marking entry into its 21st state. Over the past 2 years, BJ has expanded into Tennessee, Alabama and Kentucky. In 2026, it has plans to enter Texas in the Dallas-Fort Worth region. DFW is a high-growth market with favorable demographics.
• BJ also continues to drive strong membership growth with a 7.9% increase in membership fee income in Q4. Membership is at an all-time high, above 7.5 mln members, with another impressive renewal rate performance of 90%. BJ sees membership as the cornerstone of its business. Since FY18, BJ has grown its member base by 40%. BJ also just instituted its first membership fee increase in seven years. Effective January 1, 2025, its Club membership fee increased by $5 to $60 a year and its Club+ fee increased by $10 to $120 a year.

Overall, there is a lot to like in this report, including the big EPS upside and strong comp growth. What really stands out are the comps trends, having accelerated each quarter of the year. BJ has also done a great job improving its grocery assortment as well as its general merchandise offerings. Finally, the stock is trading at a new all-time high following this report. It is trading above $110 for the first time ever and has been showing good momentum. Costco (COST) and Sam's Club (WMT) are still the behemoths in the warehouse space, but BJ's Wholesale is making a name for itself.