BJ's Wholesale Club Holdings Stock Rises On Upbeat Q3, First Fee Hike Plan In 7 Years: Retail Chatter Hits One-Year High
Synopsis
BJ’s board of directors has approved a new share repurchase program, authorizing the company to repurchase up to $1 billion of its outstanding common stock.
Shares of warehouse club chain BJ's Wholesale Club Holdings Inc ($BJ) jumped nearly 6% in Thursday’s pre-market trade after the company reported its third-quarter earnings that topped Wall Street estimates and raised its full-year earnings guidance.
Total revenues rose 3.5% year-over-year (YoY) to $5.1 billion, below an analyst estimate of $5.12 billion while adjusted EPS stood at $1.18, topping a Wall Street estimate of $0.93. Net income rose 19.4% YoY to $155.75 million during the quarter.
BJ's Wholesale Club said it reached a milestone of 7.5 million members. The company also announced plans for its first membership fee increase in seven years, effective Jan. 1, 2025. BJ’s said the Club membership fee will increase by $5 to $60 a year while the Club+ membership fee will be hiked by $10 to $120 a year.
During the quarter, comparable club sales increased by 1.5% YoY while the metric, excluding gasoline sales, increased by 3.8% YoY, led by strong traffic. Membership fee income rose to $115 million from $106.1 million in the third quarter of fiscal 2023, primarily driven by strength in membership acquisition, retention and higher tier membership penetration across both new and existing clubs.
BJ’s board of directors has approved a new share repurchase program, authorizing the company to repurchase up to $1 billion of its outstanding common stock.
The firm raised its full year fiscal 2024 comparable sales growth guidance, excluding the impact of gasoline sales, to between 2.3% and 2.4% versus an earlier forecast that stood at the high end of a 1% to 2% YoY growth range.
Full-year EPS is expected to come in at $3.90 to $4.00 compared to a prior guidance toward the low end of a $3.75 to $4.00 range.
Following the announcement, retail sentiment on Stocktwits jumped into the ‘extremely bullish’ territory (92/100) from ‘extremely bearish’ a day ago. The move was accompanied by ‘extremely high’ message volume (96/100) that hit a one-year high.
Shares of the firm have gained over 27% on a year-to-date basis.
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