BJ's Wholesale Club Holdings, Inc. has recently released its 10-K report, providing a comprehensive overview of its fiscal year 2024 performance. The company operates warehouse clubs across the eastern half of the United States, offering groceries, general merchandise, gasoline, and other services through various online platforms. In fiscal year 2024, BJ's Wholesale Club reported net sales of $20.0 billion, marking a 2.5% increase from the previous year, driven by strength in perishables, grocery, and sundries division, increased gasoline sales, and the opening of seven new clubs.
Comparable club sales, a key performance indicator, increased by 2.5% in fiscal year 2024, with merchandise comparable club sales rising by 2.8%. This growth was propelled by increased sales of perishables, general merchandise, and services, particularly driven by fresh produce, dairy, fresh beef, nutrition, beverages, and paper categories. Additionally, demand for toys, electronics, apparel, and home categories contributed to the upsurge in general merchandise and services sales.
Membership fee income also saw a notable 8.5% increase, reaching $456.5 million in fiscal year 2024, primarily due to robust membership acquisition, retention, and higher tier membership penetration across new and existing clubs.
Cost of sales accounted for 83.5% of net sales in fiscal year 2024, slightly up from the previous year. The merchandise gross margin rate, excluding gasoline sales and membership fee income, decreased by approximately 10 basis points compared to fiscal year 2023, mainly due to the sales mix and ongoing business investments.
Selling, general, and administrative expenses (SG&A) increased by 5.0% to $3.0 billion in fiscal year 2024, primarily driven by increased labor and occupancy costs resulting from new club and gas station openings, along with an increase in incentive compensation. Pre-opening expenses for new clubs and distribution centers also rose to $28.3 million in fiscal year 2024.
The company's interest expense decreased to $51.4 million in fiscal year 2024 from $64.5 million in the previous year, primarily due to a reduction in average outstanding borrowings and fluctuations in interest rates.
BJ's Wholesale Club's effective income tax rate decreased to 25.9% for fiscal year 2024 from 28.8% in fiscal year 2023, primarily due to higher tax benefits from stock-based compensation.
The company also provides non-GAAP measures, including adjusted net income, adjusted EPS, adjusted EBITDA, and adjusted free cash flow, to present more accurate year-over-year comparisons and exclude items not indicative of its core operating performance.
As of February 1, 2025, the company had cash and cash equivalents totaling $28.3 million and $1.0 billion of unused capacity under its ABL Revolving Facility, with the belief that its current resources and anticipated cash flows will be sufficient to finance operations for at least the next twelve months.
In fiscal year 2024, BJ's Wholesale Club repurchased 2,181,885 shares under the 2021 Repurchase Program for a total purchase price of $190.9 million, fully exhausting the $500.0 million authorization under the program.
The company does not have any off-balance sheet arrangements that are expected to have a material effect on its results of operations or financial position. It also provides a summary of its cash flows from operating, investing, and financing activities, detailing the net cash provided by operating activities, net cash used in investing activities, and net cash used in financing activities for fiscal year 2024. The market has reacted to these announcements by moving the company's shares 1.0% to a price of $109.07. For more information, read the company's full 10-K submission here.
