BJ’s Wholesale Club (NYSE:BJ) executives said the company finished fiscal 2025 with “strong momentum,” pointing to comparable sales growth, record full-year earnings per share, and continued market share and traffic gains despite a cautious consumer backdrop and lingering uncertainty tied to tariffs and geopolitics.
On the company’s fourth-quarter fiscal 2025 earnings call, Chairman and CEO Bob Eddy highlighted several full-year milestones, including membership growth of more than 500,000 members, the opening of 14 new clubs (the most in a single year for the company), and digitally enabled sales penetration reaching 16%. CFO Laura Felice said fourth-quarter adjusted EPS rose 3.2% year-over-year to $0.96, while full-year adjusted EPS totaled $4.40, landing at the high end of the company’s revised guidance range.
Fourth-quarter results and category performance
Eddy said the 2.6% merchandise comp reflected the company’s 13th consecutive quarter of market share gains and 16th consecutive quarter of traffic growth. In grocery, perishables, and sundries, comps increased 2.3%, which management attributed to unit growth and merchandising improvements. Felice called out strong performance in non-alcoholic beverages, candy, and snacks, and said unit growth was about 1.5% as inflation moderated.
General merchandise and services comps grew 4.3% in the quarter. Felice said consumer electronics and apparel were strengths, while home and seasonal remained a drag.
Margins, value investments, and the tariff backdrop
Felice said merchandise margin rate (excluding gasoline) was down about 50 basis points year-over-year in the quarter, driven by merchandise mix. In response to an analyst question, Eddy said the “predominant cause” of the decline was a shift toward general merchandise, which he described as slightly lower margin than other parts of BJ’s business, with consumer electronics the lowest-margin portion of general merchandise.
Eddy added that the company had restricted buys in several general merchandise categories to manage exposure to tariffs and markdown risk. He said that played out as expected: consumer electronics performed well, apparel continued to grow, while home and seasonal—more subject to tariffs—posted negative comps after inventory cuts in those businesses.
Management also emphasized that BJ’s made “considerable investments in value” during the quarter, particularly in grocery. Eddy said pricing gaps improved during the fourth quarter due to those investments and that the company intends to continue prioritizing value. Felice noted the company does not guide to merchandise margin on an annual basis, and said full-year merchandise margin was “flat” after rounding.
Felice also said the company is not contemplating the impact of “recent tariff news and evolving macro uncertainty” in its fiscal 2026 assumptions, while acknowledging tariffs could influence inflation and broader consumer demand.
Membership growth and fee income
Executives repeatedly pointed to membership as a core driver of the model. Eddy said BJ’s ended the year with more than 8 million members, a new high for the company, and posted a 90% tenured renewal rate for the fourth consecutive year. Higher-tier membership penetration rose to 42% in fiscal 2025, which Eddy described as a higher-spending and more engaged cohort.
Felice said membership fee income (MFI) rose 10.9% year-over-year in the fourth quarter to roughly $129.8 million, supported by acquisition and retention trends and an annual fee increase implemented in January 2025. Looking ahead, she said the company expects MFI growth to moderate as it laps the fee increase and returns to a more normalized run rate.
Asked about underlying membership trends and discounting, Eddy said some of the MFI growth reflected the fee increase and described BJ’s approach to discounted memberships tied to automatic renewal, with members paying full price in subsequent years. He said the company aims to optimize member count, renewal rates, and membership pricing, including by varying offer constructs and channels.
Digital growth, new clubs, and Texas expansion
Eddy said digitally enabled sales grew 31% in the quarter, driven by adoption of buy online, pick up in club (BOPIC), same-day delivery, and Express Pay. He noted more than 90% of digital orders are fulfilled directly from clubs. Management said the company posted its highest digital sales day ever on Black Friday and then surpassed that record on Cyber Monday.
Responding to a question about fulfillment capacity, Eddy said BJ’s is “relatively unconstrained” and can push more volume through its clubs, though some high-volume locations face constraints that are being addressed through capital and labor investments and operational adjustments. He said the company does not see a ceiling on digital growth and intends to keep investing in digital capabilities. Eddy also described BJ’s use of AI, including its “Ask Bev” shopping assistant, and said AI is being used behind the scenes to improve merchandising enrichment and platform reliability.
On expansion, management reiterated plans to open 25 to 30 new clubs across 2025 and 2026 and said the pace could continue in the years beyond based on the pipeline. Eddy said the fiscal 2025 class of new clubs is performing above expectations, citing membership in those clubs running more than 30% above plan and on-time renewal rates roughly 900 basis points higher than the chain average at this point. He also said returns on new clubs are “well into the double digits.”
Executives discussed entering the Dallas-Fort Worth market in the first half of the year. Strategy and Development EVP Bill Werner said early engagement and membership signups are tracking to expectations 8 to 10 weeks ahead of openings, and that supply chain support will come from existing distribution infrastructure combined with local support. Felice said fiscal 2026 SG&A is expected to show slight deleverage, driven by accelerated new club openings and depreciation, alongside investments to support growth in new markets.
Cash flow, leverage, and share repurchases
Felice said BJ’s ended the quarter with net leverage of 0.4x. During the fourth quarter, the company repurchased about 1.3 million shares for $117.7 million, bringing full-year repurchases to roughly 2.6 million shares for $252.4 million. She said the company had about $750 million remaining under its current authorization and plans to be “thoughtful and opportunistic” with future buybacks.
Eddy also recapped three-year progress, including member growth of 1.5 million, digital penetration rising from 9% to 16%, $3.3 billion in adjusted EBITDA, more than $2.6 billion in operating cash flow, and 29 club openings as part of a $1.7 billion capital investment program. He said BJ’s added about $500 million of owned real estate to its balance sheet, paid down more than $300 million of debt, and repurchased “well over half a billion dollars” of shares, retiring about 5% of its share count.
Fiscal 2026 outlook
For fiscal 2026, Felice guided to comparable sales growth excluding gas of 2% to 3% and adjusted EPS of $4.40 to $4.60. She said the company’s plan implies lower comps early in the year and growth as the year progresses, noting that the first quarter of the prior year represented a “high watermark” for comps.
Felice said BJ’s plans to continue investing in its supply chain network to support long-term growth and is “excited to open” an automated distribution center in Ohio in 2027. The company expects an effective tax rate of about 27% for fiscal 2026, with the lowest rate typically occurring in the first quarter due to stock compensation windfalls.
About BJ’s Wholesale Club (NYSE:BJ)
BJ’s Wholesale Club, headquartered in Westborough, Massachusetts, is a membership-based warehouse retailer offering a wide range of products and services primarily to small businesses and individual consumers. The company operates large-format clubs that provide value-priced groceries, health and beauty products, electronics, home goods, furniture, seasonal items and automotive supplies. In addition to its in-club offerings, BJ’s features fuel stations at many locations and operates an e-commerce platform for online ordering and home delivery.
Founded in 1984 as a division of Zayre Corp., BJ’s Wholesale Club quickly expanded throughout the Northeastern United States.
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