BJ's Wholesale (BJ) Rides on Value Proposition & Digitization
BJ's Wholesale Club Holdings, Inc. BJ 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 third quarter of fiscal 2023, membership fee income witnessed a year-over-year increase of 6.6%, fueled by strong renewal rates and successful membership acquisition. We foresee a sustained improvement in membership fee income as new club openings ramp up.
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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, delivery.bjs.com, and the BJ’s mobile app, the company is ensuring an engaging and seamless digital shopping experience.
Teaming up with DoorDash for on-demand grocery delivery and introducing Same-Day Select, which offers members unlimited or a set number of same-day grocery deliveries in as little as two hours, further highlights BJ's commitment to meeting evolving consumer needs.
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 16% in the third quarter. Clubs fulfill approximately 90% of digitally enabled sales.
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.
As part of its long-term financial targets, BJ’s Wholesale Club projected a low-to-mid-single-digit-percentage increase in comparable club sales, excluding the impact of gasoline sales. The company guided total revenue growth of a mid-single-digit percentage. It expects a high-single-to-low-double-digit-percentage increase in earnings per share in the long run.
This Zacks Rank #3 (Hold) stock has risen 7.9% in the past six months compared with the industry’s rise of 14.3%.
3 Picks You Can’t Miss Out On
Here, we have highlighted three better-ranked stocks, namely Vital Farms VITL, The Kraft Heinz Company KHC and Celsius Holdings CELH.
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 145%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Vital Farms’ current financial-year sales suggests growth of 29.4% from the year-ago reported figure.
Kraft Heinz, which manufactures and markets food and beverage products, currently has a Zacks Rank #2. KHC has a trailing four-quarter earnings surprise of 9.9%, on average.
The Zacks Consensus Estimate for Kraft Heinz’s current financial-year sales and earnings suggests growth of 1.1% and 6.5%, respectively, from the year-ago reported numbers.
Celsius Holdings, the maker of the leading global fitness drink, CELSIUS, currently carries a Zacks Rank #2. Celsius Holdings has a trailing four-quarter earnings surprise of 110.9%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current financial-year sales and earnings suggests growth of 98.5% and 185.2%, respectively, from the year-ago reported numbers.
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BJ's Wholesale Club Holdings, Inc. (BJ) : Free Stock Analysis Report
Kraft Heinz Company (KHC) : Free Stock Analysis Report
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