BJ’s Logs Record Q4 Adjusted EBITDA, Healthy Comps

BJ’s Wholesale Club Holdings Inc.’s results for its 13-week fourth quarter of fiscal 2018 ended Feb. 2 included record adjusted EBITDA of $165.4 million. Comparable-club merchandise sales for the quarter, excluding the impact of gasoline sales, grew 2.9 percent – the company’s sixth straight quarter of positive merchandise comps.

Also for Q4 2018, the retailer reported income from continuing operations of $63.7 million; net income of $64.3 million, or 46 cents per diluted share; adjusted net income of $62.1 million, or 44 cents per diluted share; and a gross profit increase to $628.9 million, from $621.3 million in the year-ago period.

For the full year ended Feb. 2, the company posted adjusted EBITDA of $578.4 million; comps excluding gasoline sales up 2.2 percent; income from continuing operations of $127.1 million; net income of $127.3 million, or $1.05 per diluted share; adjusted net income of $186.2 million, or $1.33 per diluted share; and a gross profit increase to $2.36 billion, from $2.24 billion in fiscal 2017.

BJ’s attributed its rise in gross profit for the quarter and full year primarily to “continued progress in our category profitability improvement program.”

“We’re pleased with our fourth-quarter and full-year performance, which exceeded our expectations for sales and earnings,” said BJ’s Chairman and CEO Christopher J. Baldwin. “We ended the year with all-time high renewal rates and membership fee income. We delivered strong fourth-quarter merchandise comp sales, supported by a successful holiday season and continued momentum through January. Looking ahead, we intend to continue to invest in our strategic priorities and look forward to driving further improvement in our business in 2019 and beyond.”

On the company’s March 6 earnings call, Baldwin observed: “Our results show the investments we started to make as we began our transformation in 2016 and 2017 are continuing to pay off. As an example, last year marked the first time that BJs members were able to take advantage of our full omnichannel offering.”

Also on the call, Robert Eddy, the company’s, EVP, CFO and chief administrative officer, said that in perishables, edible grocery and nonedible grocery, “the two-year stack comps outpaced fourth-quarter comps, underscoring the growing momentum in our business.” In perishables, he noted, “Key drivers of growth include strong performances in [the] bakery, fresh meat and produce categories.”

Meanwhile, according to Eddy, edible grocery comps were up 3 percent during the fourth quarter of 2018, “driven by growth in salty snacks, water and specialty beverages … We were encouraged by the continued improvement in this division which is supported by strong holiday and Super Bowl marketing and merchandising activities.”

Westborough, Mass.-based BJ's operates 216 clubs and 138 BJ's Gas locations in 16 states.