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BJ's Membership Growth Hits Record: Is Loyalty the Key Driver?
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Key Takeaways
BJ grew past 8M members in fiscal 2025, adding 500K in its biggest annual gain.
BJ Q4 membership fee income rose 10.9% to $129.8M on strong acquisition and retention.
BJ held a 90% tenured renewal rate for four straight years; digitally enabled sales rose 31% in Q4.
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) achieved a significant milestone in fiscal 2025 by expanding its membership base to more than 8 million members. The company added more than 500,000 members during the year, marking its largest annual increase in recent history. This growth translated into financial gains as membership fee income rose 10.9% year over year to $129.8 million in the fourth quarter, driven by strong acquisition, retention and higher-tier penetration.
For the fiscal year, membership fee income totaled $499.8 million, growing steadily from about $56 million in fiscal 1997, implying more than 8% compounded annual growth rate. Loyalty appears to be the primary engine behind these record figures. The company maintained a 90% renewal rate for tenured members throughout fiscal 2025, a peak level it has held consistently for four consecutive years.
Management attributes this retention to a value proposition that saves members approximately 25% compared to traditional grocery store prices. Higher-tier membership penetration reached 42%, indicating strong adoption of BJ’s enhanced membership offerings.
Digital engagement is also bolstering this loyalty loop as digitally enabled sales grew 31% in the fourth quarter. Engaged omnichannel members are approximately twice as valuable as those shopping only in clubs because they tend to visit more frequently and renew at higher rates. This combination of deep value and digital convenience continues to strengthen the company’s membership annuity.
Walmart and Costco’s Benchmark Loyalty Trends
Walmart Inc. (WMT - Free Report) is increasingly leaning on membership as part of its omnichannel ecosystem. Walmart reported global membership fee revenue growth of 15.1%, supported by strong adoption of Walmart+ and improved engagement across digital platforms. Walmart continues to pair membership with convenience, as global e-commerce sales rose 24%, reinforcing stickiness through faster delivery and personalization.
Costco Wholesale Corporation (COST - Free Report) remains the gold standard in membership-driven retail. Costco delivered 13.6% growth in membership income, with a robust 89.7% global membership renewal rate, underscoring deep customer loyalty. Costco also benefits from scale, with 82.1 million paid members and rising executive membership penetration, which drives higher spending per user.
What the Latest Metrics Say About BJ's Wholesale
BJ's Wholesale has seen its shares tumble 22.7% over the past year compared with the industry’s decline of 16.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, BJ's forward 12-month price-to-earnings ratio stands at 20.18, higher than the industry’s ratio of 17.6. BJ carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BJ’s current financial-year sales and earnings per share implies year-over-year growth of 5.7% and 2.7%, respectively. For the next fiscal year, the consensus estimate indicates a 6.9% rise in sales and 8% growth in earnings.
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BJ's Membership Growth Hits Record: Is Loyalty the Key Driver?
Key Takeaways
BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) achieved a significant milestone in fiscal 2025 by expanding its membership base to more than 8 million members. The company added more than 500,000 members during the year, marking its largest annual increase in recent history. This growth translated into financial gains as membership fee income rose 10.9% year over year to $129.8 million in the fourth quarter, driven by strong acquisition, retention and higher-tier penetration.
For the fiscal year, membership fee income totaled $499.8 million, growing steadily from about $56 million in fiscal 1997, implying more than 8% compounded annual growth rate. Loyalty appears to be the primary engine behind these record figures. The company maintained a 90% renewal rate for tenured members throughout fiscal 2025, a peak level it has held consistently for four consecutive years.
Management attributes this retention to a value proposition that saves members approximately 25% compared to traditional grocery store prices. Higher-tier membership penetration reached 42%, indicating strong adoption of BJ’s enhanced membership offerings.
Digital engagement is also bolstering this loyalty loop as digitally enabled sales grew 31% in the fourth quarter. Engaged omnichannel members are approximately twice as valuable as those shopping only in clubs because they tend to visit more frequently and renew at higher rates. This combination of deep value and digital convenience continues to strengthen the company’s membership annuity.
Walmart and Costco’s Benchmark Loyalty Trends
Walmart Inc. (WMT - Free Report) is increasingly leaning on membership as part of its omnichannel ecosystem. Walmart reported global membership fee revenue growth of 15.1%, supported by strong adoption of Walmart+ and improved engagement across digital platforms. Walmart continues to pair membership with convenience, as global e-commerce sales rose 24%, reinforcing stickiness through faster delivery and personalization.
Costco Wholesale Corporation (COST - Free Report) remains the gold standard in membership-driven retail. Costco delivered 13.6% growth in membership income, with a robust 89.7% global membership renewal rate, underscoring deep customer loyalty. Costco also benefits from scale, with 82.1 million paid members and rising executive membership penetration, which drives higher spending per user.
What the Latest Metrics Say About BJ's Wholesale
BJ's Wholesale has seen its shares tumble 22.7% over the past year compared with the industry’s decline of 16.6%.
Image Source: Zacks Investment Research
From a valuation standpoint, BJ's forward 12-month price-to-earnings ratio stands at 20.18, higher than the industry’s ratio of 17.6. BJ carries a Value Score of B.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for BJ’s current financial-year sales and earnings per share implies year-over-year growth of 5.7% and 2.7%, respectively. For the next fiscal year, the consensus estimate indicates a 6.9% rise in sales and 8% growth in earnings.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.