AMG River Road Small-Mid Cap Value Fund’s Views on BJ’s Wholesale Club Holdings (BJ)

In its 4th fourth 2024 capitalist letter, River Road Small-Mid Cap Value Fund emphasized stocks specified arsenic BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ). BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) operates warehouse clubs that supply groceries, wide merchandise, gasoline and different ancillary services, coupon books, and promotions. The one-month instrumentality BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) was 14.90%, and its shares gained 54.65% of their worth implicit the past 52 weeks. On April 1, 2025, BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) banal closed astatine $114.88 per stock with a marketplace capitalization of $15.134 billion.

River Road Small-Mid Cap Value Fund stated the pursuing regarding BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) successful its Q4 2024 capitalist letter:

"Another bottommost contributor during the 4th was BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ), a warehouse nine relation with 244 clubs and 175 state stations crossed 20 states connected the United States East Coast. BJ reported Q2 results that exceeded expectations, but guided to marginally little merchandise borderline for the afloat twelvemonth arsenic the institution continues to put successful a amended worth proposition for its members. Comparable-store income (excluding fuel) accrued 2.4% driven by 4% postulation maturation and affirmative same-store income crossed each categories. Gasoline sales, a cardinal postulation operator for BJ, outperformed the broader United States market, with same-store gallons increasing by 5%, successful opposition to a debased single-digit diminution industry-wide. Groceries and perishables income were up 3%, besides indicating marketplace stock gains implicit accepted grocers. General merchandise income were up 1% year-over-year arsenic absorption has renewed absorption connected amended assortment and amended value. BJ is besides expanding investments by improving perishables assortments similar nutrient and produce. The investments successful wide merchandise volition pb to a level year-over-year merchandise borderline successful 2024 compared to 20 bps betterment expected astatine the opening of the year. These investments should thrust postulation arsenic good arsenic incremental rank interest growth, the astir important metric for the warehouse nine model. To that end, rank interest income roseate 9.1% successful the quarter. Additionally, higher tier rank penetration accrued to 39%, up 1% sequentially, with double-digit maturation successful the One+ tier ($110 yearly fee, holding a co-branded Capital One card), the highest tier membership, which has the top beingness value. BJ is connected way to unfastened 11 much clubs by the extremity of 2024 and an further 10-12 caller clubs successful 2025. We took nary enactment connected the position."