BJ’s calls 2021 “the best year in our history”

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BJ’s Wholesale Club added to strong net and same-store sales growth a year ago in its fourth quarter and fiscal 2021, including hitting the $1 billion mark in online sales.

In the fourth quarter ended Jan. 29, net sales climbed 10.4% to $4.266 billion from $3.86 billion a year earlier, Westborough, Mass.-based BJ’s said Thursday. Membership fees increased by 9.5% to reach $94.3 million. Comparable club sales increased 8.8% overall, but increased slightly 0.9% excluding fuel, for two-year battery growth of 21.8% (16.8% excluding fuel ).

BJ’s net sales for fiscal 2021 totaled $16.31 billion, up 8% from $15.1 billion in 2020. Membership revenue increased 8.4% to 360 $.9 million as the membership base grew 3% year-over-year, including a 4% gain at the top end. members. Comparable annual club sales increased 6.5% overall, but fell 0.5% excluding gasoline, translating to two-year growth of 22.4% (20.8 % without fuel).

“Our food business remained very strong during the quarter.” — Robert Eddy, President and CEO of BJ’s (Photo courtesy of BJ’s)

“2021 was our best year ever, with tremendous financial results and impressive progress on our strategic priorities,” Chairman and Chief Executive Robert Eddy told analysts on a conference call Thursday. “2021 was the most profitable year in company history, generating $880 million in adjusted EBITDA and $3.25 in adjusted EPS, even above the strong performance of 2020.

On the sales side in fiscal 2020, BJ’s posted net sales gains of 13.7% for the fourth quarter and 17.1% for the full year. Compensated sales increased by 13% (15.9% excluding fuel) for the quarter and by 15.9% (21.3% excluding gasoline) for the year.

Groceries proved to be a catalyst in the fourth quarter of 2021, according to chief financial officer Laura Felice.

“Our food business remained very strong in the quarter, while sales of sundries and general merchandise lagged our plans. Compounds from our grocery, perishables and sundries division were up 2% and 19% on a stacked basis,” Felice said on the call.

“Digging deeper into the results, we found that perishables and dry groceries continued to perform well, generating an offset of 5% and a two-year stack of 23% in the quarter,” he said. she explains. “But this strength was offset by weaker sundries sales. In the review mirror, it is clear that our miscellaneous business was impacted by a surge in purchases in the third quarter. Members made outbound purchases in September and October which impacted sales in November and December. We are confident that our fourth quarter results in miscellaneous were not caused by recent assortment work. Combining the third and fourth quarters into various elements shows a two-year stack acceleration in the second half of about 60 basis points.

Big BJ clubBJs Wholesale Club-curbside pick-up-car.jpg

BJ’s said sales of online services like curbside and club pickup and same-day delivery were up around 45% from a year ago.

Own-brand penetration increased 200 basis points to 23% in the fourth quarter as more members put BJ’s brands in their shopping carts, topping perishable and miscellaneous items, Eddy reported.

“By focusing more on our own brands, we will look to accelerate the steady improvement we have made and we believe we have a good racing pace here,” he said. “Our members respond well to our brands, and we find that members who buy their own brands are some of our most valuable. The number of baskets including at least one own brand is up this year and the repeat purchase rate improved by around 400 basis points over the year.

“As well as completing the simplification of sundries and increasing the penetration of own brands, we will also begin the reinvention of our new offering to ensure that we provide a higher quality and better value version of the products. that our members want the most,” Eddy added. “Freshmen are already the anchor of our business, but we also see tremendous opportunities there.”

BJ’s saw its online sales increase by 19% in the fourth quarter of 2021, for a 187% increase over two years. Full-year digital sales grew 22% and more than 250% over a two-year period.

“For the first time, we generated over $1 billion in digital sales in 2021. And those sales now represent nearly 8% of our total business,” according to Eddy.

BJs Gas customer-fill-up.jpgCEO Robert Eddy said BJ’s will “significantly increase our gas station footprint” in 2022. (Photo courtesy of BJ’s)

“Around 80% of our digital sales are made by our clubs with services like BOPIC [buy online, pickup in club], curbside and same day delivery. It’s up about 45% from last year,” he said. “We’re seeing our members engaging with all of our digital offerings, and that’s exciting because we also know that members who are increasingly engaging digitally are younger, visit us more often, and buy more when they visit.”

BJ’s went live on the DoorDash live e-marketplace “in the last few days only,” Eddy said, noting that the delivery service will provide members with added convenience. BJ’s had announced the DoorDash partnership when releasing third quarter results in November.

“We continue to work on the same-day delivery model piloted by BJs.com and expect it to be live in April,” Eddy said. “According to this model, our team members will prepare the orders and our delivery partners will make the deliveries to our members. This model will allow for a better experience and better value for our members and a better economy for us. We will also be launching an unlimited deliveries plan, which will allow members to get unlimited same-day deliveries for a fixed price for one year. In our testing, we have seen encouraging response and results from our members. »

BJ’s opened five new clubs and seven new BJ’s gas stations in 2021, ending the year with 226 clubs and 157 gas stations in 17 states, compared to 221 clubs and 151 gas stations at the end of fiscal 2020.

In 2022, plans are for the warehouse club chain to open 11 clubs, including in new markets such as Columbus, Ohio; Indianapolis; and Nashville, Tennessee; and existing markets such as Atlanta; Miami and Orlando, Florida; Richmond, Virginia; Detroit and the New York metropolis.

“Our confidence here continues to grow as new clubs opened in recent years have performed better than expected, with stronger sales and operational performance leading to faster returns on investment than originally expected,” Eddy told analysts. .

BJ’s announced Thursday that the first phase of expansion will include four new clubs, in Warwick, RI; Lady Lake, Florida; Canton, Michigan; and Greenburgh, NY

“We will also significantly increase our service station footprint, with a total of 12 new service stations planned within the year,” Eddy said. “This would bring our percentage of clubs with petrol stations to nearly 75% by the end of 2022. Fuel is an important value driver on its own, but becomes even more important when paired with our co-branded Mastercard, which is offering these members a 10 cents per gallon discount off our already great prices. »

Warwick’s upcoming club will carry a new banner, BJ’s Market, and serve as an innovation hub to test new assortments, displays, product demonstrations and convenience initiatives, according to BJ’s.

“As we consider the different ways to develop new units, we will also be opening a small box pilot this year,” Eddy said on the call. “While this may become a new vector for expansion for us, it will initially function as an innovation lab.”

On the earnings side, BJ’s totaled net income of $107.6 million, or 78 cents per diluted share, compared to $95.9 million, or 69 cents per diluted share, a year ago. Net income for the year was $426.7 million, or $3.093 per diluted share, compared to $421 million, or $3.03 per diluted share, for fiscal 2020.

Adjusted net income for the quarter was $109.9 million, or 80 cents per diluted share, compared to $97.2 million, or 70 cents per diluted share, in the same prior year period . Adjusted net income for fiscal 2021 was $448.9 million, or $3.25 per diluted share, compared to nearly $429 million, or $3.09 per diluted share, in 2020.

On average, analysts had expected fourth-quarter 2021 adjusted earnings per share of 74 cents, with a range of 64 cents to 98 cents, according to Refinitiv. Wall Street’s consensus estimate for the full year was adjusted EPS of $3.20, with projections ranging from $2.97 to $3.65.

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