Yahoo Finance Live anchors Julie Hyman and Ines Ferre discuss the rise in stock for BJ’s Wholesale Club following fourth-quarter earnings.
Video Transcript
JULIE HYMAN: Let's also talk about some other movers here. We've got BJ's Wholesale Club, that stock popping after reporting a beat on the top and bottom line. It said it achieved a record 90% tenured member renewal rate in the fourth quarter. The shares are moving higher.
Like, you know, many of the companies that cater to consumers who are trying to save money, this is a company that seems to be benefiting from that. If you look at the comp sales, excluding gasoline, up 8.7%. Much better than what analysts had been estimating here. Inventories also climbing less than had been anticipated. And membership fee income up 8%. So overall, you know, performing pretty well.
INES FERRÉ: Yeah, that membership income of 8%, that's significant because membership fees tend to be going straight to the bottom line. I mean, this is something that's also positive for Costco, as well. But just taking a look at some of the comments that were said by the Chief Financial Officer Laura Felice saying that looking ahead to fiscal 2023, that they have the understanding that there are still significant uncertainty in the macroeconomic backdrop, as well as its influence on the US consumer.
So certainly taking in mind-- keeping in mind the consumer, which has gravitated and did gravitate during the pandemic, as well to big-box retailers, getting more in bulk. Making less trips to the store. And now, it's about inflation and about getting more value when you go shop, and buying in bulk is better.
JULIE HYMAN: Well, and we heard from Costco that they suffered a little bit from people not buying as many discretionary items at the stores. I, frankly, don't know the product mix at BJ's, if it offers as many as those like giant teddy bears and sort of cool items like Costco does. But it does not seem to be necessarily suffering from that.
If you look at even their forecast for the full year for the fiscal year, they're looking at comps, ex-gasoline, to be up 4% to 5%. Membership fee income, to your point, an area that goes straight to the bottom line, up 5% to 6% year-over-year. And merchandise gross margins to rise about 40 basis points. At the same time, BJ's says earnings-per-share are gonna remain about flat year-over-year.
One more thing quickly I just want to mention since I just did mention Costco and we talk a lot about Costco. Just to put these two companies in perspective that compete against each other, BJ's has about 237 clubs. I believe that they are all in the United States, compare that with Costco, 848 locations, 584 of them in the US. So Costco a much bigger operation obviously.
INES FERRÉ: A much bigger player.
JULIE HYMAN: But BJ's, it looks like doing well in this environment.
