BJ’s Wholesale Club Holdings, I (BJ) stock forecasts

Summary

BJ’s Wholesale Club Holdings owns BJ’s Wholesale Club, which operates a chain of warehouse clubs in the eastern US. BJ’s positions itself between traditional supermarkets and warehouses such as Sam’s Club and Costco, offering a wider range of items and smaller package sizes than Costco and Sam’s. The company posted total revenue of $20 billion in FY24, which ended February 3, 2024. Membership fee revenue represented 2.2% of total revenue and 53% of operating income. The company sells branded merchandise and food to members, small business owners and consumers. Based in Westborough, Massachusetts, the company also offers specialty services including tire installation, optical services and photo development. At the end of FY24, the company operated 244 BJ’s clubs and 175 gas stations in 20 states. More than half of the clubs are located in four states: New York, Florida, Massachusetts and New Jersey. Approximately 23% of FY24 revenue was generated in the New York City metro area (up from 25% in FY21 and FY20). Clubs range from 44,000 to 177,000 square feet. BJ’s sells a relatively limited range of about 7,000 SKUs, but plans to reduce this to about 6,000 to improve inventory turnover. Groceries represented 70% of the company’s net sales in FY24 (67% in FY23, 71% in FY22); General goods and services accounted for 11% in FY24, 12% in FY23 and 14% in FY22, and petrol rose from 15% in FY22 to 21% in FY23 and 9% in FY21. Gas was 19% of revenue in FY24. A predecessor company, BJ’s Wholesale Club, traded as a publicly traded company until it was acquired by an investor group led by Leonard Green & Partne on September 30, 2011