BJ’s Surpasses $1B in Adjusted EBITDA for 1st Time

Club retailer’s impressive financial results punctuate record Q4, full fiscal year

3/9/2023

BJ's achieved record results in FY22, including a tenured member renewal rate of 90%.

BJ’s Wholesale Club hit its stride in the fourth quarter and full fiscal year 2022, marking myriad records with continued club growth, comparable club sales and all-time high renewal rates. As it expanded its footprint to new states and market areas, BJ’s also surpassed $1 billion in adjusted EBITDA for the first time in the company’s history.

In Q4 of FY22, BJ’s saw total comparable club sales increase by 9.8% year-over-year, with comparable club sales, excluding gasoline sales, increasing by 8.7%. Membership fee income increased by 8.0% to $101.8 million, and digitally enabled sales growth was 22%. Gross profit increased to $903.2 million from $797.2 million in Q4 of FY21 and operating income increased to $192.8 million, or 3.9% of total revenues.

Full FY22 brought a record adjusted EBITDA increase of 18.0% to $1.04 billion in FY22 compared to $879.6 million in FY21. Gross profit increased to $3.43 billion from $3.08 billion in FY21, comparable club sales increased by 13.4% year-over-year and inventory increased to $1.38 billion at the end of FY22.

During the first investor day broadcast from its new club support center in Marlborough, Mass., BJ’s CEO Bob Eddy touted the retailer’s transformation since going public in 2018, including a reinvention of the company’s club-opening model, continued investment in digital operations and record revenue growth.

“2022 was a record year, having surpassed $1 billion in adjusted EBITDA for the first time in the company’s history,” said Bob Eddy, president and CEO, BJ’s Wholesale Club. “Our membership base is stronger than ever with our tenured renewal rate reaching an all-time high of 90%.”

Continued Eddy: “Our continued focus on value has driven traffic and market share gains all year. Our digital business is growing and we’re successfully expanding our footprint. The investments we continue to make in our company position us well for long-term growth and sustainable value creation.”

After a fiscal year full of new club openings and an expanded footprint across the northeast, BJ’s expects to open 11 to 12 new locations in FY23. The retailer will enter two new states when it cuts the ribbon on stores near Nashville and Huntsville, Ala., later this year, and additional store openings are planned for Johnson City, N.Y., Lewis Center, Ohio, and North Jacksonville, Fla. BJ's anticipates opening approximately 10 new clubs per year for the foreseeable future.

Looking toward the rest of FY23, BJ’s anticipates comparable club sales, excluding the impact of gasoline sales, to increase 4% to 5% year-over-year, membership fee income to increase 5% to 6%, merchandise gross margins to improve approximately 40 basis points, and EPS to remain approximately flat.

“We remain confident that our advantaged business model, continued focus on executing our strategic priorities, and commitment to delivering great value to our members will continue to drive strong results for our business,” said Laura Felice, EVP and CFO. “We look ahead to fiscal 2023 with the understanding that there is still significant uncertainty in the macroeconomic backdrop as well as its influence on the U.S. consumer.”

Marlborough, Mass.-based BJ's operates more than 230 clubs, 160-plus BJ’s Gas locations and seven distribution centers in 18 states. The company is No. 26 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America.