BJ - Earnings call transcript Q4 2021 | BJ's Wholesale Club Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to BJ's Wholesale Club Fourth Quarter Fiscal 2021 Earnings Conference Call. My name is Candice and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference call over to our host, Cathy Park.

Your line is now open. Please go ahead.

Catherine Park

thank Fiscal for XXXX and Club's BJ's everyone, Quarter Fourth Earnings morning, you joining all Wholesale Good Conference Call. and Bill President, President Financial on Eddy, Chief Laura Officer; Bob Felice, the Officer; call. and and Werner, Strategy Vice Executive Development, are Executive Chief of during meaning federal remember within that make statements call, this Please securities may laws. we forward-looking the the expectations call. results expectations uncertainties that and statements These to materially involve differ and are this based on risks described from our cause our actual on current could Please Factors XX-Q recent with uncertainties. description Risk see XX-K the Form risks those a most the our of section for and and filed Form of SEC

Finally, please the this financial not in a as I'll intended believe financial accordance the certain prepared refer we will for call of to on Please note provide comparable that, in most with a to section our in to Bob. useful substitute be information today's over of refer the is considered posted investors. release that measures isolation of today's accordance reconciliation GAAP. to press with we'll information or to the information financial presentation GAAP. that call, With non-GAAP measures for website turn these for presented Investors on measures non-GAAP The

Robert Eddy

Good fourth joining morning. Thank us call. you our quarter earnings for today on

$XXX the performance the the above was board. President impressive I'd in has tremendous EBITDA in us our with to join priorities. XXXX on company's Vice million We're most best begin, strong XXXX Investor year of even just to and adjusted Cathy Please our introduce her like as year Relations. on history we EPS, to results joined $X.XX profitable the Before XXXX. and Cathy in Park, adjusted in of us of who progress our financial been history, generating BJ's. strategic excited welcoming have

invest quality years real best each have still yielded X And shareholder for years. part the cash nearly capture progress of to returns membership, and X debt ahead the than X considerable to in balance off our and digital opportunity look on members. and versus The merchandising, been Beyond we the at made as of XXXX our over consecutive used in sheet, have X.X this over our looking of size have turn less a million membership authorization. that more membership and business in years business the Taking industry we base investment repurchase in of is We never and there We million past our $XXX in perspective, X profitability, robust our company When ago. paying issuing a collective an leverage of cash XXXX, bringing of we delivered share us among been transformation significant flow evidence the of from free we efforts had plenty first. turns new to in is also improvements have buying just beyond. to to the cash $XXX and stronger. $XXX This back million shares to value our the has portfolio. of shareholders, million now estate offer and building business return

Along X% XX% X% has year; years our versus count X also base, over size sequentially, quality by has member improved. last the ago. of Our grown and the membership with

X%. out history, over to our in compound member proud in are XX%, Tying story. size base, annual Our year improvements grown our not membership X together, and higher increase year. by at point tier over past the improvement highest year record. and members has now just over also each closing last last a year's points pandemic are an a a these our of X comprise company's renewal rates, of been had the renewal a XX% improvements X In the of report which years, rates growth quality we rate The

our have size we quality record improved the and we've new of also membership fee grown As highs. base, income our to membership

member over dollars up per fee the to X% last is years, income risen over year. MFI just of X And $XX. over last Our member just from per shy membership $XX have

membership As representing X%. never year XX% the a put of it we years in result, had full compound in average progress I structural The our we've when life. than $XXX more a years business. of are the ago, in XX rate more way. exceeded gains member we now XX%, we ago began another years Think company than reported $XXX approximately improvements in more nearly growth renewal reported MFI what made and years, million, million X grown sight. annual To context, In our lasting by that X the tenure over more last our is than my rate have XX% few and with tenure of

accomplished our initiatives. across We all are have we of membership proud incredibly that

QX members eclipse this in expect of X.X likely to We million year.

in also earlier, As I will of mentioned and targeting important be are our XX% tenured different a company. marker rate, better renewal becoming success very a a which we

We of will our also continue to membership increase base. the quality

our MasterCard important part the value of that years members knowing directly they us with Our an this several product is reward initiative. we value. out ago, lifetime created set this offering created, benefit more to When co-branded we would have from

has to X.X continues the in us which allowed be to cardholders. among million prop, industry, the grow best to value about Our

take program the have chosen to this One next help to us level. We Capital

be that look pass year the members, progress efforts are will over having their in over comp sundries. This year. presentation less to seen our our have exceeding partner reward feature of this and our improving in We've our in performance seeing categories. also with sundries early of days to simplified powerful reductions moving spend merchandising, forward make next We're despite effort knowing strong margin will results even that us again, value will allowed a such ahead categories more will as and and SKUs. now We new has that continued affected they much continuing the fiscal our pre-simplification next to we program The the very We SKU expand simplification designing XX% in rate. The to categories time, in us. believe better shopability. currently

see we've external Brands building Officer to the improve look merchandising continue After think quarter, We and we announcing Senior Rachael capability Vice new of will here. sales. on last talent. we Merchandising making, of steady focus we own significant have been we additions to good as and Own Presidents accelerate Chief and With increased internal with BXB to improvements opportunities our beginning Vegas added the runway brands, our

in points divisions. by XX%, and strength up sundries year-over-year driven our basis perishable Our penetration this was quarter XXX

of the including reacting that brands, item are at during by approximately brands shop members to points rates X up owned brands our valuable. year find least baskets, Our improved are basis we well and this and purchase XXX our that most year. own was The number repeat members among

In already increasing offering addition is focus Fresh simplification progress. take of business, we're ensure sundries value have GM a providing can to a and the we higher need assortment our completing the it will that better most. anchor of as own merchandise share the our of and And more we our quality penetration, we brands too, members to on renewed in fresh we our and the begin general will go. yet want here, of update to reinvention also place better, products relevant increasing make opportunity to a where considerable finally, we the more business. think we will see you We version

year The this of our shows to our our our digital for business members. Turning objective performance convenience of improving success.

And these the our For over with same-day XX% time, X% in we first are delivery. from services like fulfilled a sales the of now enabled in last sales XX% has comprise almost about over by our business, year. of XX% stacked This $X grown total clubs year-over-year and BOPIC, digitally billion basis. and Approximately over generated increased digitally having sales on XXXX. XXX% our curbside enabled

finding that increasingly they know often and that us because who visit. members are engaging of is and exciting are younger, we purchase this digital members digitally We more are engaged when also more our offerings, with all our visit

is to We continue that technology products We been our using a The shop. as long-term deliver club convenient the lines of never That across for new place to went our game thought ExpressPay, business. live channel skip for has a changer like members to know experience the the to your our leveraging more phone. QX. in also most launch ability checkout chain convenient

this have that in this our and our to to This expect members by the partners and and will model, Under Our DoorDash the are us. our that. now of on our and for same-day driven live new orders live we better digital that better last paradigm, the value delivery, convenience reward for work us better members. team will bj.com believe continuing our days, and To April. a and make members increasingly marketplace in will assets will economics members. model our excited we in few to end, we're deliveries about value just bring experience will for chain to the We're and changing members allow pick be our for delivery model this

to our testing, launch as program results unlimited a package, we'll year. crystallize. our our same-day also will for and an from In allow for encouraging share members deliveries we've members, an will fixed which get unlimited and price We deliveries X response seen more specifics

We efforts. to X proud report to clubs opened new that stations and we Moving continue gas new I'm in accelerate our real X to XXXX. estate.

leading initially continues in Our operating stronger last performance contemplated. than had have the expectations few been to sales clubs confidence years opened increase new paybacks faster than with here better to as and performed

to in XXXX We XX expect and open markets. existing clubs in new

being Metro. New with New to Indianapolis Miami, Nashville, markets and Detroit and Richmond, include Columbus, markets Atlanta, expected Orlando, are York existing

gas $X.XX an to would total right an its clubs XX% gas of expected with at station with great paired prices. offers significantly is gas our with will Fuel those discount our becomes nearly year. in bring XX on but co-branded important a when already stations gallon even We which a in important new the our stations end This MasterCard, value the own our members more also increase driver percentage footprint per XXXX. of of

ahead the look open ways we units, we we As new box also will various grow at small this pilot can year. a

initiatives. assortments, vector an us convenience as will become lab could for to product expansion this demonstrations initially function a us, it new innovation While new and test out displays, for

performance both progress QX, we and area. how in evident key investments In cash underpinning financial our strategic the we made is use X our also in Our flow. logistics business,

independents our perishable center in also our This opened serve but better will Midwest, market volume markets us our take we by of the First, balance in facility fourth some currently allow to operated core distribution Kentucky. to facilities. Logistics, new our Burris

phenomenal food been acquisition over partners to we our Burris Burris distribution One all the welcome And of members and family. years once over thing X the of is not the once to considerably. and chain. as we've members importantly, purchase our announced The of allows to complex from excited our over derisks perishable business Logistics. We're resilient the most learned over us the is have and as control supply supply for family chain years. thought. the us XXX team direct Second, important that XX complete, team centers part Burris This most past

important, strategic deal is reduction merit. risk While has also this

our optimize over perishable network why and to our to to deal in business. mentioned prepared shop and critical offerings. discuss should that, of much will for And a fresh to in foods. items. quality and to in foundation effort our aggressively these results a provide clubs, which Our financial more are Controlling more us This do foods our great can terms our areas allow it a assortment to lag with which freshness I we reason more distribution freshness we build future improve Laura like I'll turn be the flexible of on better our new in earlier assortment, detail. our in members

Laura Felice

and as challenging fourth you, of everyone. shortages and year was enabled in team drove the team We incredibly morning, suppliers' Omicron as fantastic very is well members. delivered and good members of hard share changing significant environment. the of an keep to disruptions their business operating hard resulted and facilities Bob, year, with quarter Thank work at you contributions and our of facilities as to proud our our The by work excited products the are together. and that we as building member purchase of bay. the work team results well I'm I members habits I'm am were for hard thankful strong in infections it our results, another of today. this

As the earlier, Bob year mentioned transformational this our most best been year has and company's in history.

a robust real ever digital today will stronger is is than grow growing and growth. long-term and future revamped balance sheet that membership we our and pipeline. is it The relevant record this base to rates, of extend estate look BJ's a have membership business, We renewal and been, and company a deliver to poised health has position.

turn to by $X.X our were sales Net the gasoline, of XX.X%. billion. driven the fourth comp by sales, Now sales let's ticket. Merchandise comp quarter. for increased X-year by of quarter grew On results a and sales X.X% exclude which stack, were

Our is in quarter. and business business saw strong in by X% a September a the Delving well, impacted into it perform strength deeper be generating perishable the sales. that top the sales division lagged sundries. while But the quarter. and purchasing Members Comps third of food basis. we pull-forward in X% and grocery grew that to into and purchases sales continued results, quarter, continuing stack in of our our a impacted grocery, stacked offset comp weaker perishables and a items, to In the XX% merchandise in very November general on mirror, by by sundries this outside our sundries clear and XX% dry rear-view sundries plans. December made line October and was was X-year of

confident recent the sundries in and stack that not XX third results QX quarters an in were X-year our work. the basis about acceleration the the are Combining by in sundries second We caused in of points. half fourth shows assortment

driven due categories in Our inventory from X% televisions cadence. product general and supply comp. chain product and division electronics services suffered was generated performance basis stacked a on holiday declined as assortment shortages promotional headwinds to X% seasonal and availability, a This merchandise items. key in We X-year and comp such and

sales quarter approximately the enabled grew XXX% by in a nearly Our and XX% X-year on digitally stack.

invest the same-day together platforms, We delivery, during in fourth to gasoline of particularly business, as which XX% quarter. outpacing versus gallons In our curbside overall growth XX%, digital market share pickup gas more BOPIC, than X/X continued continue retail performance. behind prices ago. than digital drove a to increased and our grew quarter more Comp fourth approximately the gain significant year on market average in by we

members market business. mix of the the by we delivered our with strong a and in membership We quarter, and underscores prior income, during increasing results $XX that made year high delivered our growth the all-time demonstrated the the and business. share XXX new to past industry-leading grew strongly Healthy million rate retention gasoline XX% in quarter. fee member with renewals XX% during renewal fourth we new trending Over or basis progress in points have course favorable Membership of gains to over by relative along this MFI, for tenured our quarter first-year year. improving members

renewal memberships increased over higher-tier of of penetration enrollment is XX%. and to all-time easy an Our high XX%

let's Now to move gross margins.

business, Excluding last expectation quarter. by than points, gasoline margin you that gross we increased our the shared our better much rate of merchandise XX XX points basis down with basis

managing mix. $XXX increase job labor great the in was for this wage we as inflation a and benefit the primarily a attributable did SG&A as costs to margins the associated were of with quarter expenses year-over-year also earlier saw costs from year investment occupancy million, our team a merchandise pending acquisition. Our higher the associated well increased we Burris and face expenses with made

sales expansion. XX% by grew EBITDA adjusted $XXX reflecting and margin growth to million, Our

was million or Burris our related Adjusted onetime our $XXX adjusted facilities. of was quarter basis. to XX% income $X.X due $X.XX to share incurred in This in awards. metric. rate year-over-year we about were acquisition quarter tax adjusted for on relative of a it equity a for of the higher from windfall prior was pending EBITDA fourth the and XX%, per growth quarter, the than the deal lack share costs million quarter reflected Tax net costs These within per

share to Our earnings count. benefits prudently and manage growth highly in leverage ability our inflationary as P&L as environment throughout of costs lower our a a well highlights the

top and year considering out prior as we we for very initially planned the comparable pleased in how perspective. With the both with bottom-line shook formidable are this a year, our line most from the history year how and

elevated had of was generated in stack basis more a we price XX% EBITDA $XX XXXX, Adjusted of XXX% on more stacked basis. points by adjusted than XX $XXX net which And despite X%, than investments growing costs. a Membership was distribution by X-year X% we rate fee and growth X%. grew on and a basis. million, an $XXX Margin billion comp During grew stacked we merchandise of million, increase on income and sales sales. EPS XX%

allowed cash our This versus has in repaying of transform We last to than year flow funded free by also a more million generated X.Xx balance with flow us leverage million debt. this $XXX cash year. sheet, X.Xx $XXX

this flexibility debt More the the good in reduced us Burris with deal invest future to being greater allow importantly, level a of will example.

forward, cash to to is As growth business. enabled priority we new allocate going flows real our and these be by estate foremost will support plan funded and digital capital membership, our by our first flexibility. grow and our found Investments

to We At authorization. million $XXX free remaining $XXX the buy cash our also opportunistically the flow. back remaining of XXXX, million end we buyback under with shares plan had

the to aid unknowns to stimulus for agree return that While as government significant continues can we the levels that are and variability most be unprecedented could significant materialize all several we anniversary make headwinds likely to normal, coming things we that are to year. frame starting there guidance as Among efforts. for look of

that decades. some highest of of several the levels also are we've experiencing inflation We seen in

we full guidance details. year following Given offer the these uncertainties,

to a From membership merchandise the and to mid-single-digit mid-single-digit range. standpoint, sales increase revenue we total range low-single-digit the in in XXXX in expect MFI range. expect We grow the to increase comp

profit a XXXX remain typical flat. greater gasoline We than expect year. $XX conditions approximately market to million provided of merchandise margins

in retain to share that gains for unwind have We captured. we this but have we XXXX, the planned will market

d We expect currently giving is yield year. anticipated $X.XX will close in for flat acquisition. after The be to effect of pending Burris for full deal EPS the year-over-year will EPS the and QX

$XXX cadence be We to We also and weighted expenditures expect comp approximately currently of the million. capital quarters. our quarterly anticipate towards first fourth

done will a of much the remain we resulting than growth. generate algorithm profile able to revenue confident a that continue to growth had pandemic mid-single-digit in to long-term We better we be prior

to turn I'll our it back Now to prepared Bob conclude remarks.

Robert Eddy

the back, transformation company. in began The company. to the continue last best Laura. ago and years this back to outlook take I'm history enabled X for put position we The is the confident deliver in Thanks, bright this us us years the were performance company's years that opportunities to that to to of transform and advantage also

providing convenience have to a our been better value are than while. they than are We members ever gaps and more and our price in

result, a flywheel is faster. As our spinning

quality. membership We are growing and size

We merchandising. improving are our

We are value delivering conveniently.

We are into new broadening our markets. reach

doing We businesses we've this things co-brand offering has that are with chances delivery. unlimited membership never done, also taking pursuing like key and critical partnerships innovating and ones never taken capabilities, company around like acquiring new structures

than shareholder tremendous grow better and We've Our over value in ability today the to business demonstrated an long period have is game. future. confidence ever, by of time our we a long playing

than becomes are we We our wallets underpinned quarter less offer even stretched thin. value We opportunities are times. when and so That the more easier advantages. long-term And to ever access opportunities that more more eyes on X see. our we've value with keep will made many strategic that inflationary value digital important in several by tremendous any capabilities. Those on

many We competitors. a model have our labor than also lower of

those less As rise, are affected we labor than costs competitors.

the and these club never stronger. structural confident times are of business that the been We for have right are advantages

and team in I their that thank of new Finally, and they their efforts I'm company our I incredibly for fiscal we results the to our to together would to members. forward year. will all service members look proud the and to that like our provided, accomplish

operator Now to I'll session. turn the the call Q&A back to the over begin

Operator

Benedict from of Instructions] question the of Baird. [Operator line first Peter Our comes

Peter Benedict

this or question, be of cadence third this Capital friction One, weighted, to do merch point, will benefits BJ's are comp you assuming manage quarter quarter. Maybe quarter then comps going assuming And accrue transition to be members? comps at And are, year-over-year quarter second then the year, One, on we my basis? P&L coming second Fourth just think, you merch to kind on limit be and X curious potential as in with for would questions. down should first this a that that from you how transition you what your the perspective? the just maybe to friction or

Robert Eddy

question. the Peter, thanks for

we to think will as on we're year, The bit pretty a company out, the figure As out. the be overall. little cadence, you quarterly coming weird point bullish about

It's So that believe be necessarily that should from we negative. be comp QX hill really gave to be towards We climb weighted and may negative. QX guidance QX. the QX will highest don't the certainly we sales One see forward. out, we going a about And We're the how I partnership It's lapping perspective. the incredibly think Capital business. given how possible. plan our shaking that's bullish with

still with prop really in can a point. new a nascent what know of I us grow the we'd the been to reward our to and transmit we has like to think and at from habits best in value they years forward X next of pretty is better. taking million out we program it, business value industry that more gains best lifetime still the going co-brand purchasing And can announced is probably more among we value that might We're still we prop the able early after our $X.X current looking We're new members, the value. but ironing membership to perspective, we've run and example to our do partner. program how to this level days forward. it this the in the program the cards been show from And be. And the in

not reward there. as look economics gains it loosely, us we members over pass make time. we the in we old news program, to did any will that our lot about they'll of that those to whole our on to deal, share a might think know of the So new But

that to a building deal. you're fact process from And approach out, deliberate additional want new do sure transition seamless trying to not to our our profit that We're and really for shareholders. not we're that the overmanage point we right make to process quickly. a needs and the We in the try it, it for do be directly members take managed. we this so So to deliver correctly it to

Operator

Our next question comes Robby America. of the from Ohmes of line of Bank

Robby Ohmes

Actually, of quick a couple questions.

just of in are thinking against of first, stimulus. sort The terms how you the about comparisons

the would So it the like sounds be first quarter. strongest comps in

peak was comp to I hit, then a comment how lot traffic a there income just very than think that's exposure trends when change, stemming was warehouse do versus was exposure similar? fourth is competitors. you think in of more of question previous the getting you other the or some lower the any And on have quarter that other

Robert Eddy

prospects, said, go of as of prepared our we're we're we pretty excited that progress advantage bullish the in taking strategic the we've made about forward. over I long-term years. As remarks, incredible about past couple And

last dollars of a stimulus Certainly, stimulus on has over is good and our and EBT were increased penetration couple as past EBT outside members the of programs given years. gone one. the through question the couple years, Your we've through they of

anticipate that. So laughing of effect we do a

their memberships. environment. are the renew members members extra they shop in without a They visit pandemic, lot, these even they the good often, us stimulus any they However, of

the a tenders. And also other so they on they -- these we members, into use on use members, important many focus and it's of tender, focus EBT our retaining as And these although getting try that buildings. them

great dollars franchise the year. their of going that as keep and in did they fact our understanding intend shopping keep are that they not to them still last we year so renewing as and next members try motivated forward. are and And and memberships But there many will have we

think with sense, pressure the remarks. If I hangs and traffic noted in your business negative our quarter, our sundries in fourth that prepared we about general question, the on QX business the merchandise you it that and mean our was together you slightly assume it during

Operator

question Gordon Chuck Haskett. next of Our Grom from comes

Chuck Grom

GM are next feeling that supply general And cadence on quarters? fixing the on guess chain? few merchandise, you business, curious just the you're of Bob, I how where the about over

Robert Eddy

our little from categories. general don't for and QX chain We supply some do started Chief suffered think some question. supply challenges for not are Thanks It's in it face challenges team Rachael good We've back one. the I the every chain our is categories. rocky that we like electronics we an televisions business. within general was and those lots new business do when there time have love well categories lead our And some a the the categories in We of seasonal key big merchandise a about a is anything spending We've and with but merchandise that me, day. directly that this Vegas. of and the and overall something general penetration Rachael really that to we've presenting merchandise I'd over it -- team within it needed in started of to longer business, amount our as is get increase -- other to the a will process. there. opportunity is relevant That's added sales and do to we was to The our to business. that to get it. with those of us general our changes I time. that That made in time. that X/X be what Merchandising with is reality incredible over are on times. timely assortment members team, merchandise in Officer, merchandise help way best do can

X like to to ahead just buy fix will be chain will months were of categories mainly we televisions which XX that to time. be easier harder fix It issues. supply it so seasonal And out categories like

number a the half to over the this over time, half. So better And be improve first I year for to -- of would second new hopefully, look for this the than of years.

Chuck Grom

uptick guess was quarter? issue in just the expected I for I quarter. term, the to the the dots the on first an a of which then has quarter, just near it be would, rectified relative fourth to towards nice the the in trying your sounds upper itself think, in you quarter that And connect reported. is end comment the the range like it on sundries stack just what XQ that fourth I'm to X-year imply

Robert Eddy

the Yes, great point a you that's -- X-year on stacks. make it's

You look the how really over have couple past this the many the is you're of Sundries things first in should happened at to stacks years. given the plan about X-year as the strange at X-year point nicely quarter. and thinking how quarters positive stacks

noted recovered. because protective really softness and relative in-stocks in of had took and Laura personal that And accelerated paper outsized some to QX that case The together the and spectacular to of think in the combined was comps we of equipment. we QX February. actually categories, has X second that competition, members it in and So our half. preponderance we're of Most is in positive advantage here with that proves cleaning QX, fact the sort back our and really made the buys. that the in QX I of

QX of proposition just important was an to to and hopefully, members. value So blip, continue our it a we that as part can overall business incredibly our it's build

Operator

you. Thank

Our from of next Mike comes question Baker Davidson. D.A.

Mike Baker

on the important issues. all A membership couple questions

are out as that relatively they're new that now talk in grow or XXXX, picture from maybe or can renewing, we're as curve joined you typical seen So it spending might that? they the tenured start that about you've off about with a for member years much early how flat from just How in some know new member. as now than spending going? has XXXX, what two or bigger fall simply concern the you members. be was There more pandemic talk Can that not members? about I they that past their

Robert Eddy

about have remarks. prepared I I talked -- my in

and terms stronger quality. past has grow size over it five membership years. of never the We've in continued Our been to

admired of sequentially, which counts $X recap the over Dollars at over two membership the at points past growing CAGR. me and from personally years. our be the And CAGR, in We've five Let points and would last that base growing incredible. a MFI starts up in competitor's the a for largest love up the better looked growing but to number perspective of first-year X% remember always their X for last over renewal nicely is key some will a which X%. from points rate overall as next great quickly marker and That in year year. XX that base X high matter with incredible. get and us all-time new points over another year at up our five And We this a to number our that XX% almost is X% year tenured XX is a business.

achievement will personally, so when get be And big we there. that a

visiting thing. the renewing nicely, nicely, we than the doing which covers, all you're And all cohorts referencing. that As members more under the that are ever renewing an They're well. is important COVID time look on of includes members

that membership. see really That's things for building new So this term we what within continue then and year the us the gives long into feeling well. to great bullish coming as

Mike Baker

then that, me up Well, let on I follow if could.

X.X%. going Your guidance first break Can down -- your growth. club I you to up MFI into mid-single-digit count be that average is all, think for of

some you from down versus presume just how would? much of members if adding Can I sort of So member? new there, break you mid-single-digit increase per that MFI from it's but

Robert Eddy

Yes.

we're mean You've of basically and on member back growing I to the forward. go per got fact bodies with of we've thinking right top ting potential the going things. That's it. the what of conservatism been that dollars

continue that promise growing where we've deliver So that's been that we the issued. in run we've the MFI trying on, that and to think under mid-single-digits we've can over the and been I guidance

Operator

of Steph question Our from next comes Wissink Jefferies.

Steph Wissink

unpack. to we We wanted had X areas

your lab Island. is first in Rhode innovation The new

you it prototype things your about behind the larger true you could a are little Is testing If talk format stores? test? for strategy just bit a Or that?

Robert Eddy

Yes.

maybe at So have. talk about foremost, to and first gaps Bill We're, an little Werner I ask in fill me I'll any that lab. it looking it and a let bit as really innovation

things. So in things And trying do place And it. is of having to up the install the to it, we place, here people try innovation business. what quotient way of need do culture to a safe ways in is one that we And to we're means after. that we're the do freedom is can that's to company do and tinker give this growth. the to a the really new the a of

new a new to a but very, know to in not people assortments, growth on with If club, up this product we mothership. that be of becomes we're it a they presented out open it for do we we want getting works new I back to that initially it learn its today that it focus a successful. work, how be more things lot about doesn't you works it's deliver million how work, chain, right if bring own the at the front-end what If labor trying model, it building of we few be of at does growth add very today port if would demos a to way us, about any does boxes. Bill? if different lose traditional do success convenient be a where a the at will to new club and to way. If what different out, it's value think might different this building our members how have the end, a that way, truly we asymmetric all what in wonderful. will how works demonstrations, particular back dollars sorts the can front a it really think we few out than than things can show things then a stellar chance whole That's really model of things. don't more end would efficient that fashion. in be It more We'll like point, to see have And we'd if differently. get can to a we take real different assortment learn thinking vector the to product All it quickly and anything, will so right, could try different thing in

William Werner

And to do other would either something of and billion Yes. BOPIC, while member we a so could a all ability smaller it's it need we how that lunch out of sales be as for still to This or add, our that format, our they in there everything about $X test with offer are convenience other And there. boxes, for can could digital little box back through all with convenience, a think get step ways about access business, becomes value talked full-size members. our a same stuff, digital around day. if you'll about I the to to the right? -- bring get around we I the think we the No. fulfilled quickly be curbside what bit and just XX% able being

see to So done, as and some learning it here. get Bob goes get excited, open. and we're excited how testing We're it we'll mentioned, to

Steph Wissink

cost labor That's supply and pressures, pressures about your in Right. I the you the labor Omicron mentioned the to sort and think remarks was into a it little chain just guidance of us relativity flow for absenteeism. can the P&L. Laura, of wondering both any disruptive you of just bit And I'm customer year. middle thinking on guidance. of And sales carryover your help earnings helpful. some if one that in How between you're kind

backside on you're bit little the Omicron. emerge about a seeing as we kind talk Just of what of

Laura Felice

Thanks, Steph. Yes.

it that about prior apart, a we is of of you our way bit growth is of you And of deleverage we've the that to ramp-up that our talked and in guided, if part a Part really should So certainly break is story quarters. just investment wage the new that is the as clubs. business. think in you

haven't a at at the we're recent we been years. cadence in So that

performed XX future stores you our with as with from that don't year know adding X, that's think you this year, one XX adding this we where a compared years. clubs increase. relative that about until the or carried new So over to would And scale

in bit a just a from investment drag you've forward. got little our growth going the So of

Robert Eddy

point And put maybe on that a I'll finer stuff.

you've Those a costs, then of good preopening is actually boxes from going $XX open or So $XX will things, Laura sales years. We scale and XX but a very utilities, not types those XX, full clubs the occupancy right? full of labor, over full just X as got to full a what all in boxes. sales couple with is open new have costs million headwind million referencing, story, you which

this So what you're unfold to few years. growth story, labor investment, is next seeing is but which also going there that partially over the partially

Operator

Our next the Edward from Kelly from Wells question of line comes Fargo.

Edward Kelly

evolves any go so I to But just more that just comp, it fixed color back be quickly on the chain and to don't want how want seem to supply the QX. then just quickly. issues and be doesn't it that QX dead so the I in impacting to how here. got horse

assortment-driven. there elaborate that inflation. of in on is kind comp in confidence not the of despite then mentioned And decelerated underlying weakness just You and that. Omicron the sort the also Maybe food,

well? thoughts So side just on that as

Robert Eddy

the Thanks Yes. for question.

was food and up Our and incredibly business did had XX a QX, well during it stack it. X on

And was to It's the the been with for that happy quarter long of very business very, great we're for So another business time. run. is way core it. QX a continuing the

forward about promotional talked a X bit a really Sundries for and chain cadence. was and assortment GM and stories. little sundries softness we of were was the pull As in really supply and the different most GM part

that for pull you. me let apart So

out some going pointed into in inventory electronics we to TVs we When but seasonal So year, more key you QX right and in like we supply the the QX, talked we suffered inventory. and than weren't sure from did had had we categories chain QX challenges. we prior if all

I inventory. out think we what we have is right the found didn't

plenty not So take expensive of seems that. an and example QX. TVs what to had We the from and value smaller enough big of as wanted consumer TVs TVs be in that us of

have been. as little out that. of as we to those successful trying we're have a bit fix our liked of TVs were would We running squeeze can to behind some we suppliers, not and So

be. I have the make where new want sure install to we right GM, to a QX. as of assortment. time, of in as we QX, the long-term will just in issue the And build rest category for fix and right then we as important and we be that the market new levels Seasonal the I becomes talent assortment TVs to is will and lesser continuing processes a try get a supply And chain assortment think, think, is continuing, to it than over resolve. think that start instance, I challenges

about little bit other where was X/X of So to continue a pull it here quarter. gotten we'll of story, first as think and as really in the forward I it we positive our be of from about earlier, couple back get and I has comps business. it a work questions, to a said is talked Sundries that that's long-term to in to

here. in blip I to we business, look that's first quarter good So that X-quarter having can just a think a and forward

Edward Kelly

follow-up just for And you. one Great.

So Fresh on you? Burris about road been how time you the progress you. long of you for and how for think, can right? into Can a Fresh, guess, just I sort And category? of talk virus things changes I of big I has quickly a opportunity for, Fresh mean leveraging that the sort down

Robert Eddy

is this Look, for another Yes. build long-term us.

They've We're family. partner members. highlights to and service us really on. invisible We're incredibly look their the us first team business. team. really to been a members, that our our really make culture That's members, make of any priority is happen that to our with and members they're facilities client in Burris entire it been our to member, They've business. their a the into disruption try trying the bring That's the wonderful acquisition So as excited they our given our our the and partners. Burris I've through working without team to what direction to to to to

we're culture very profile us So are and and some risk with in our them flexibility to a go aligned forward. we much company, some perspective from thrilled they and bring lesser as allow

of some the the get reason we we of it we financial into buy today, the general pack sizes, the we why every we're assortment, freshness, all core can our and to reason we did derisk business. all people businesses. merchandise We our chain, it how our to do we certainly But to is control supply tremendous having They're that's make us synergies better. better. did to good in And opportunities why but buildings. them. as them ourselves thinking there, sell it. not as business, it. they supply There are can did do are our to everything It that deal. Here's is the chain Certainly, some Fresh have other to do but come help grow. want selection, and for be thing we the the the our why the will far those get about it, upside help reasons in out back It's

So here's an example.

Our basis. a clubs order on X-day currently

and do. today that which they We it now. we've from X-day are to go days We supply get to X they ordering, So particularly the already take order can started to chain to categories supply trigger It sensitive optimize can that in that freshness like give the and them. opportunities our has also members the berries to back go we chain the can possibly are so issues getting best strawberries supply even further some chain.

us. that it it cost format at run product the past. can much competitors. remarks. gets do the our chain. and way commissary past If some losing facilities close amount a is had I business of our tremendous a in my a through it the we and is a the it doing for in that small So quickly big salvage for of from is perspective. our Prepared to We do in by and think prepared Foods. a it We've not in that money about business in in supply mentioned also Burris can effective than way existing to we That trouble do a members It sooner

easy do time. are And opportunities so quick. look we to of for None them that or those over will

will don't build. which I foundation we will fiscal really make to on a that this tremendous think time, us give year. over changes But this So in

Operator

of Lejuez question next of comes Our line Citi. the from Paul

Brandon Cheatham

drive Cheatham for that you maybe similar some wanted I and then assortment I have least follow-up. I confidence out then do work? just sundries. And does decline. you temporary the to test you of And Paul. what And Brandon you gives you the to say was is into wondering, at Do This adjustment clubs that kind and some to results others? on And roll there? could of get see talk if the a did saw how about sort

Robert Eddy

for Thanks sure. the question. Yes,

have some some So sundries we as talked several quarter. the did in simplification categories during we about, significant

and up what there. we're back me you do Let tell to trying

that more is, easy credit credit to value have, assortment our for we easy a is our offer. way to for get don't sundries makes assortment see don't the and them we set reality We shop assortment it, members easy our we trying our categories, in many for it The the makes We that makes the of that cluttered. get for see are the too to it in it selection, competitors’ to subject rate the piece get every has value our that math participate in gets, to more and We're our we ever meaning on credit seen have. Almost after. for closer the that our get. this we're of have. better that That's we the the the assortment more trying assortment category get I've said the we that club sales to category members assortments, we what closure

QX. done, testing in we to saw after made that end these done those of on the that We the what These certainly at efforts extensive tested need clubs what's we wake and do benefit forward have simplification we here QX changes. into happened in number of a now we and And of put in categories many that's categories. first a we've effectively

simplification outperforming there. comp, the categories. the go categories certainly comparable driver does but fourth wasn't the of primary with their and these better But are are we initial Certainly, come softness It we outperforming touch quarter. initial the those So did some changes, there. of that a longer the we unsimplified that QX as from are see comps, was make pre-simplification and out in of they the sales efforts, getting

the assortments which by-product There's in to is to do And our much stronger been is rate confident have place. great too, these right thing get this in simplified. margin X so categories to be that right we're do to the our is that it,

if what sales we're that's winning margin, And time, can that's really more over a get after. So we and proposition. more

Brandon Cheatham

XXXX we what reduction, unlock Could -- break know some in be XXXX considered SKU out that it. may is you that have guidance, I Got unlock that potential? of some And in headwinds sorry? margin guidance margin that story. inflation modeling then

Robert Eddy

value to want on and a driver we're too to we quarter, expect to get as of don't we some the not getting uptick really can we and that we trying going the help primary provide. the far value point. primary members. the in was up fourth don't that fourth What forward. We're selection our right to for that the mix place But do weeds to certainly, get show credit is did of a margin on get assortment It in our to the that outperformance see way shape us that really the be objective did the I in be margin the we margin in It's in not so so this it right So the right rate trying assortment effort. the the about quarter.

Operator

of from the next question of line Parikh comes Our Rupesh Oppenheimer.

Rupesh Parikh

your So year comp I low-single-digit back full to want go to outlook for growth.

And well for the the normalization year. inflation perspective, about the potentially and thinking building you and away how some you're from as are a You food guys in for for expect from GM home growth just both grocery year? would on side then category

Robert Eddy

the for question. Thanks

and one year. is me less we're significant let planned the we've thinking got So to more things reduction tell the got we've stimulus, big tailwind, offset blocks, in of X comp. headwind, which how is building We've which you Those about inflation. huge the during or X

clarity of should point So a make. we that's

the effect does guidance the inflation. not Our of past. done We've that include in

assumption the so in. on inflation digits. you some giant don't on as We've already please of that that, And think layer low-single top about built

underneath number a have those of tailwinds. things We X headwinds and

merchandising home dramatic. anything habits something built we've normalization. are pandemic think low-single-digit up remarks. do food-at-home a We're seeing the the sticky. from associated You more see. tremendous in food do of prepared And the do of enough We we've that we and not continuing going unlimited We deliveries do purchasing largely but point. co-brand We all as efforts like to the about that this at membership with people's have talked We new than great that talked a be for that growth and that. headwind normalization we base strength gone then things our in brought continuing the along and with at our tailwind through efforts about that will that, headwind a improvement offset our in not have see

business towards more and that food all mixes out it's weighted towards and low-single probably sundries less business of so So for general us, to merchandise the digits this to year. and

Operator

we questions all That's today. have time for

to closing for pass conference management I'll over So the the team remarks.

Robert Eddy

merchandising We've in I Great. Thank we’ve would questions strategic your through about offering the portfolio for your at of estate If our made all retail. your better everybody, our is but and progress management I we moreover, best had. than well this for value And thought believe in been. company ever digital, you, ever and we've we talk the on one support real conveniently leave in got attention, membership have great best of today. teams our you didn't it today, has

the And all is top future. so talent this do together level all for and done team Our they'll to things that things in company the of I'd the like far the at thank incredible. they've

I that, so with you wish So luck. you good Thank much.

Operator

today's Thank conference This concludes call. you.

disconnect now your may lines. You

BJ's Wholesale Club (BJ) 3 Mar 222021 Q4 Earnings call transcript