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BJ's Wholesale (BJ) Rides on Value Proposition & Digitization
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BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) recognizes the importance of adaptability and innovation, which have become crucial for success in the dynamic retail landscape. The company's relentless commitment to expanding its membership base, advancing its digital capabilities and pursuing operational excellence has not only widened its spectrum but also set the stage for sustained growth.
BJ's Wholesale Club emphasizes quality and pricing and delivering a seamless shopping experience, thus fortifying its position in the industry. The strategic focus on refining product assortments, expediting club openings and scaling up delivery services has proven to be a winning formula for the company.
Delving Deeper Into Strategies
BJ's Wholesale Club’s commitment to bolstering marketing and merchandising capabilities, coupled with its foray into high-demand categories and expansion of its own-brand portfolio, has yielded remarkable results. It has played a pivotal role in driving membership signups and renewals, resulting in a notable surge in membership fee income.
In the fourth quarter of fiscal 2023, membership fee income witnessed a year-over-year increase of 6.5%, fueled by strong renewal rates and successful membership acquisition. We foresee a sustained improvement in membership fee income as new club openings ramp up.
BJ's Wholesale Club's focus on expanding digital capabilities is another key aspect of its growth trajectory. The company offers members convenient ways to shop, including same-day delivery, curbside pick-up and buy online, pick up in-club. With a robust digital portfolio encompassing Bjs.com, BerkleyJensen.com, Wellsleyfarms.com, and the BJ’s mobile app, the company is ensuring an engaging and seamless digital shopping experience.
Management believes that digitally engaged members have higher average baskets and make more trips per year than members who shop in-club only. Digitally enabled comparable sales rose 28% in the fourth quarter. Clubs fulfill approximately 90% of digitally enabled sales.
Image Source: Zacks Investment Research
Conclusion
We believe that BJ's Wholesale Club’s growth strategies, better price management, decent membership trends and digitization should keep supporting comparable sales trends. The company aims for mid-single-digit revenue growth and high-single to low-double-digit earnings per share increases. Its long-term target also indicates low-to-mid single-digit comparable sales growth, excluding gasoline sales.
This Zacks Rank #3 (Hold) stock has risen 14.6% in the past three months compared with the industry’s growth of 4%.
3 Picks You Can’t Miss Out On
Here, we have highlighted three better-ranked stocks, namely Sprouts Farmers Market (SFM - Free Report) , Vital Farms (VITL - Free Report) and Grocery Outlet (GO - Free Report) .
Sprouts Farmers is engaged in the retailing of fresh, natural and organic food products. It currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 10%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 6.7% and nearly 3.9%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 155.4%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings calls for growth of 18.7% and nearly 30.5%, respectively, from the year-ago reported numbers.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 9.6% and 10.3%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 17%, on average.
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BJ's Wholesale (BJ) Rides on Value Proposition & Digitization
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) recognizes the importance of adaptability and innovation, which have become crucial for success in the dynamic retail landscape. The company's relentless commitment to expanding its membership base, advancing its digital capabilities and pursuing operational excellence has not only widened its spectrum but also set the stage for sustained growth.
BJ's Wholesale Club emphasizes quality and pricing and delivering a seamless shopping experience, thus fortifying its position in the industry. The strategic focus on refining product assortments, expediting club openings and scaling up delivery services has proven to be a winning formula for the company.
Delving Deeper Into Strategies
BJ's Wholesale Club’s commitment to bolstering marketing and merchandising capabilities, coupled with its foray into high-demand categories and expansion of its own-brand portfolio, has yielded remarkable results. It has played a pivotal role in driving membership signups and renewals, resulting in a notable surge in membership fee income.
In the fourth quarter of fiscal 2023, membership fee income witnessed a year-over-year increase of 6.5%, fueled by strong renewal rates and successful membership acquisition. We foresee a sustained improvement in membership fee income as new club openings ramp up.
BJ's Wholesale Club's focus on expanding digital capabilities is another key aspect of its growth trajectory. The company offers members convenient ways to shop, including same-day delivery, curbside pick-up and buy online, pick up in-club. With a robust digital portfolio encompassing Bjs.com, BerkleyJensen.com, Wellsleyfarms.com, and the BJ’s mobile app, the company is ensuring an engaging and seamless digital shopping experience.
Management believes that digitally engaged members have higher average baskets and make more trips per year than members who shop in-club only. Digitally enabled comparable sales rose 28% in the fourth quarter. Clubs fulfill approximately 90% of digitally enabled sales.
Image Source: Zacks Investment Research
Conclusion
We believe that BJ's Wholesale Club’s growth strategies, better price management, decent membership trends and digitization should keep supporting comparable sales trends. The company aims for mid-single-digit revenue growth and high-single to low-double-digit earnings per share increases. Its long-term target also indicates low-to-mid single-digit comparable sales growth, excluding gasoline sales.
This Zacks Rank #3 (Hold) stock has risen 14.6% in the past three months compared with the industry’s growth of 4%.
3 Picks You Can’t Miss Out On
Here, we have highlighted three better-ranked stocks, namely Sprouts Farmers Market (SFM - Free Report) , Vital Farms (VITL - Free Report) and Grocery Outlet (GO - Free Report) .
Sprouts Farmers is engaged in the retailing of fresh, natural and organic food products. It currently sports a Zacks Rank #1 (Strong Buy). SFM has a trailing four-quarter earnings surprise of 10%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Sprouts Farmers’ current financial-year sales and earnings suggests growth of 6.7% and nearly 3.9%, respectively, from the year-ago reported numbers.
Vital Farms offers a range of produced pasture-raised foods. It currently has a Zacks Rank #2 (Buy). VITL has a trailing four-quarter earnings surprise of 155.4%, on average.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales and earnings calls for growth of 18.7% and nearly 30.5%, respectively, from the year-ago reported numbers.
Grocery Outlet, the extreme value retailer of quality, name-brand consumables and fresh products, currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Grocery Outlet’s current financial-year sales and earnings implies growth of 9.6% and 10.3%, respectively, from the year-ago reported numbers. GO has a trailing four-quarter earnings surprise of 17%, on average.