Q3 2024 BJ’s Wholesale Club Holdings Inc Earnings Call

Laura Felice

Thanks, Bob. I’d also like to thank our team members across our clubs, club support center and distribution centers. Their outstanding dedication to our company and communities contributed to another strong quarter.
Let’s now review the third quarter results. Net sales in the quarter were close to $5 billion increasing 3.4% over the prior year. Merchandise comp sales, which exclude gas sales, increased by 3.8% year-over-year. Our accelerating traffic and comp unit growth in the quarter serve as a strong testament to members finding significant value in their BJ’s membership.
Total comparable club sales in the third quarter, including gas sales, grew 1.5% year-over-year. An approximate 13% year-over-year decline in retail gas price per gallon was partially offset by market share gains with comp gallons growing nearly 3% year-over-year.
Digitally enabled comp sales in the third quarter grew 30% year-over-year and 47% on a 2-year stack. Over 90% of our digital sales are fulfilled by our clubs with services like BOPIC and same-day delivery, which remain meaningful drivers of our digital growth. BOPIC alone comprises about half of our digital sales today. Our digital offerings is intended to deliver value by maximizing convenience, thereby improving member loyalty. We will continue leaning into these mutually beneficial enhancements in the future.
Membership fee income, or MFI, grew 8.4% and to approximately $115 million in the third quarter, driven by strong membership acquisition and retention across the team. We’re incredibly pleased with surpassing 7.5 million members this quarter and the strong momentum we are building in membership.
Moving on to gross margins. Excluding the gasoline business, our merchandise gross margin rate increased by approximately 20 basis points year-over-year, led by our continued execution of our long-term initiatives and disciplined cost management.
Last quarter, we highlighted several areas of investment we are making to strengthen our business longer term. First, our perishables business continued to drive strong comp sales as we advance our fresh initiatives. While a growing fresh mix is naturally margin rate dilutive, we are committed to growing our fresh business due to its favorable influence on long-term member behavior.
Second, we have made considerable progress on executing CMT which, as a reminder, is our end-to-end assortment planning approach to deliver a member relevant assortment that drives profitable sales and market share growth. At this point, we have rolled out CMT across all of our key grocery and sunrise categories and the initiative is yielding our intended results of better member engagement and share gains. As a result, we’re driving structurally better margins too, contributing to our merchandise margin performance in the third quarter.
SG&A expenses for the quarter were approximately $733.6 million primarily driven by our new unit growth and other investments to drive our strategic priorities as well as an expected increase in accrued incentive compensation. We also benefited from the net impact of legal settlements of approximately $20 million in the quarter, partially offsetting the SG&A deleverage as a percent of net sales.
Our third quarter adjusted EBITDA grew 13.5% year-over-year to $308.3 million. As a reminder, our calculation no longer includes preopening and noncash rent expense add-backs.
All in, our third quarter adjusted earnings per share of $1.18 increased by approximately 18% year-over-year, reflecting the underlying growth in our business. Strong gas profitability also contributed to overall profits that exceeded our expectations in the quarter. Excluding the effects of the port strike, hurricane and net impact of legal settlements, our third quarter results were slightly better than expected.
Let’s move on to our balance sheet. We ended the third quarter with absolute inventory levels, up 3% year-over-year and flat on a per club basis with 9 more clubs in our chain today compared to a year ago. I’m especially proud of the team’s work in the third quarter in allocating the right amount of product to the right clubs at the right time. Despite the inventory challenges caused by the port strike led demand, we improved our in-stock levels by approximately 70 basis points over the same period last year.
Our capital allocation strategy is consistent with our historical framework. We believe that the best use of our cash is applying it towards profitably growing the business. As such, investments to support membership, merchandising, digital and real estate initiatives will continue to be funded by our cash flows and enabled by our strong balance sheet.
We ended the third quarter with half a turn of net leverage. Returning excess cash to shareholders remains an important part of our capital allocation strategy as well. In the third quarter, we repurchased nearly 680,000 shares for approximately $58.2 million.
With our existing share repurchase program expiring in January, we announced today that the Board has approved a new $1 billion share repurchase program effective February 1, 2025. We will continue to take a disciplined approach to deploying our capital to maximize shareholder value.
Turning to our outlook. We are raising full year fiscal 2024 guidance to reflect the third quarter results. We expect our fourth quarter 2024 comp sales, excluding gas, to grow between 2.5% and 3%, bringing us above the high end of our original full year guidance range. This remains consistent with our original expectations of getting closer to our long-term algo comps by year-end.
We continue to navigate an uncertain economic backdrop but expect our strong value proposition to drive traffic and market share especially through the holidays. In the fourth quarter, we have also embedded a little bit of unwind in port strike led sales from the third quarter.
We are proud of our achievements in membership, which has performed better than our expectations and our long-term algo this year. We expect to end the year strong despite continued moderation in the year-over-year growth rate and minimal impact from the fee increase in the fourth quarter. We anticipate that any fee increase related MFI will be invested back into our value prop, consistent with our philosophy.
Our fiscal 2024 merchandise gross margin expectations remain unchanged at approximately flat year-over-year as we execute on our long-term initiatives while investing in the business. Consistent with the first 3 quarters of the year, we are planning SG&A deleverage for the fourth quarter of fiscal 2024 as we invest in growth initiatives, particularly in unit growth and new club sales ramp over a multiyear period.
While these investments have tempered our earnings power in the near term, we have high conviction that this is the right thing to do for the long term. A reminder that we are also lapping variable compensation tailwinds from the fourth quarter of last year.
Subsequent to quarter end, we opportunistically repriced our $400 million term loan to provide for a 25-basis point reduction in our spread, the equivalent of approximately $1 million in annual interest savings. We are planning for an effective tax rate of approximately 28% in the fourth quarter.
Finally, we expect adjusted EPS to range from $0.78 to $0.88 in the fourth quarter and $3.90 to $4 for the full year of fiscal 2024 at the high end of our original range of $3.75 to $4. Please also recall that we are lapping a 53rd REIT from the fourth quarter of last year that contributed approximately $350 million of net sales and $0.10 of earnings per share.
Longer term, we remain confident in the underlying strength of our business and believe we are well positioned to deliver sustainable growth to maximize shareholder value. Bob, back over to you.

Robert Eddy

Thanks, Laura. We continue to transform our business, investing in great talent and executing on a prudent strategy focused on delivering great value and driving long-term growth. We are unified by our purpose of taking care of the families who depend on us.
We will grow the size and quality of our membership. We will offer an unbeatable member experience through our merchandising improvements. We will provide more digital conveniences to save our members’ money and time, and we will profitably grow our footprint. Thanks again for joining us today and for your support of BJ’s Wholesale Club. We will now take your questions.

Operator

(Operator Instructions)
Peter Benedict, Baird.

Peter Benedict

First just around kind of the membership, the 7.5 million members, you said 39% are at the higher tier. I just wanted to clarify, is that the right way to think about maybe the number of members that are paying $110 right now? It’s a little less than 3 million members that will be going to $120? Or is it the subsector or a subset of that group? And how are you thinking about attrition rates? That’s my first question.

Robert Eddy

Peter, thanks for the question. Look, we’re thrilled about our membership performance so far there, as we talked about in previous quarters and in today’s call so far. Our team has done a fantastic job growing the size of our membership, growing the quality of the membership. We’ve got all-time high renewal rates. The behavior of our members is improving every day and that gives us the confidence to announce the fee increase that we announced today.
Your question on the higher tier members. Obviously, those are our best members. They visit us most often. They spend the most when they’re with us. They engage with all of our digital properties. They are really high lifetime value members.
And as you know, that’s a mix of folks that pay the base membership fee and hold a credit card or a co-branded credit card and those folks that either or both pay the higher membership fee and hold a credit card. So it’s — it is quite a bit of a mix. That population has been growing really, really nicely over the past several years.
And we see a path to grow it even further and faster than we have in the past on the back of the increased value proposition that we’re putting forward as part of a reset with 2, 3 same-day deliveries as well as all the past investments we’ve made and not to mention our co-brand credit card. So we’re really thrilled with the performance from our entire team around the membership area of our business. It’s the most important part of what we do, and we’re excited about the future. Maybe I’ll let Laura jump in.

Laura Felice

Yes. The thing I would add on top of that just for clarity purposes. I think when we think about the fee increase that we’re putting in, in January, there’s a little bit of that, that flows in to this year, very small. But for next year, I would think about that as about $20 million on an annual basis. That will be back half weighted.
As you know, it will ramp over the course of the year as those dollars flow through. And we intend to run a very similar playbook to what we’ve done in the past. We will invest that back in the business and our members and make sure we continue to fuel the business going forward.

Peter Benedict

Got it. Okay. That’s helpful. My next question is to follow-up just on kind of the pace of SG&A growth going forward, you’re investing in clubs. You talk about how that kind of impacts a little bit the near-term earnings as you kind of open these, you’ve got preopening expense.
Maybe just talk to us about the pace of SG&A growth going forward, what level of merch comp you would envision needing to I guess, hold that line steady as a percentage of sales. Just however you want to frame it, but just curious kind of the longer-term view on SG&A from here.

Laura Felice

Yes. Look, I think as we step back and look at the business, you know the story on growing our unit base and so that’s an important piece of our strategic priorities as we look forward for the long term. That does provide some SG&A deleverage. Recall, we’ve talked about those clubs take a number of years to ramp and so as we’ve ramped our pace of openings, that SG&A leverage is — or deleverage is coming through.
We will come back to you all in March when we talk about full year and set next year as we think about forward-looking margin structure and SG&A for next year. But I would expect there’s deleverage as we said in the prepared remarks, for Q4 that we’ve seen all year this year.

Robert Eddy

Pete, maybe I’ll just add a little bit. This is another area where we’re incredibly proud of the progress we’ve made over the past several years. Bill and his team and our whole team really — not only have we gone from opening no clubs to about 10 a year, but we’re doing it in an incredibly effective fashion.
We’re able to do it in big chunks as well. And we talked about opening a few clubs in Q3, we will open several sort of all at the same time. That’s a huge lift for any organization, but certainly an organization like ours that’s learning how to do it. And we’re really pleased with the performance of the team. We’re really pleased with the performance of those new clubs that have come online.
And it’s really, as I think about the long-term growth of the company, while it will — all the depreciation coming in and the explodes from these clubs coming in will pressure our near-term earnings potential. 3, 4, 5 years from now, we will be absolutely ecstatic that we did it this way. And — so as Laura said, we’ll talk about next year when we get to the fourth quarter call.
But that is part of the reason why we issued the guidance we issued for Q4, as we will open a bunch of these new clubs in the next few weeks, which will pressure Q4 a bit. While we’re on that topic, maybe I’ll ask Bill if he has anything to add.

William Werner

Yes, I’d say we’re excited about what’s going forward. I think, Peter, we’ve talked about this a little bit with the investment community. But the other thing I would just comment on the SG&A piece, as specifically as we think about new clubs, is that we’ve — we’ve purposely shifted to the model of buying the land, building the buildings ourselves and then owning the real estate.
And while that does come with some incremental pressure on the front end, it certainly creates a ton of shareholder value over the long term, and we’ll continue to evaluate the overall capital structure position in terms of how much real estate we want to keep on the books. But we have a ton of flexibility at this point to make those decisions as we go forward.
As we think about the right investment to keep on the balance sheet vis-a-vis the right level of expense trend to come through the P&L on the investment side. So more to come on that. But again, to just reiterate Bob’s point, really proud of the team and across the board, we’ve spent the last handful of years building this muscle in terms of opening new clubs, opening them well. We’ve seen great results.
One of our Q3 clubs is already across the 52-week membership goal. As we look forward to the clubs that we’re going to open in Q4, 2 of them are — 2 of our [organic] clubs are already ahead of their preopening goals. So we’ve seen strong membership demand across the board, which, again, just speaks to the value that we bring to the communities and the real desire to see us open. So we’re excited for what’s ahead here.

Operator

Robby Ohmes, Bank of America.

Robert Ohmes

Two questions. One, just on for the fourth quarter guide. What’s the holiday assumption for that 2.5% to 3% comps? What’s the general merchandise comp assumption in there? Is it general merchandise comps expected to accelerate solidly from what you did in the third quarter? Any color to that also mix of digital versus in-store that you expect? And maybe remind us whether that matters a lot to your margins if it ends up being more digital than in-store.
And then maybe for Laura, just the fresh initiatives. I don’t know if you can give us any more color on the margin impact assumed for that in the fourth quarter? And any thoughts for next year that we should be thinking about on fresh impact on margins next year.

Robert Eddy

Yes. Thanks, Robby. Good questions. As we think about Q4, certainly a lot to take in, given the holiday shift and coming out of the election and the weather we’ve seen here in the Northeast and all sorts of different things to get through. But overall, we’re cautiously optimistic.
We feel like we’ve got the right assortment out in front of our members. We’re very proud of what the general merchandise team has put out there as I traveled clubs in the last couple of weeks, it all looks great. Our ops team has merchandised it very well for our members and our members are in those aisles shopping as I’ve traveled.
So I think we’re pleased. We certainly got the traffic in our business to support that. And it’s obviously driven by the fresh business, as we talked about a little bit earlier. But as folks are coming in for their holiday food shop, I expect them to be in our general merchandise as well.
I would expect a better performance in GM in Q4 versus Q3. We had some weather noise in Q3 given the abnormally warm fall and a few other items in the third quarter, but we really are happy about what we’ve got on the floor for Q4. And hopefully, our members respond in the way that in the way that we expect them to do.
Our digital business is frankly on fire at this point, putting up 30% growth this past quarter on top of huge growth the previous quarter — previous year in the same quarter. We’re really doing a great job saving our members’ time through our all of our digital properties. I see great growth in the use of our app, great growth in the use of ExpressPay to skip the lines at checkout. And our members are really telling us all the time that we’re helping them save time as they do that.
So it is a little bit more costly in some of those things. Certainly, as we’re picking orders, that causes a little bit more labor, but the baskets are bigger in digital orders and folks that interact with us digitally tend to have more incremental shopping beer and better renewal rates as well. And so if we have to invest a little bit more in labor, we’re happy to do that for the long term. And maybe, Laura, why don’t you tackle the first question?

Laura Felice

You recall in Q3, we talked a lot about our fresh story. And as we’ve seen that ramping through our business at a faster pace than we expected. We saw that business to continue to do very well in the third quarter, as we talked about in the prepared remarks.
That business does come at a lower margin rate just by the natural structure of it. But we continue to think that it’s important for the long term for our members to engage in that category. And we know if our members engage in the fresh category, they are more likely to expand their basket over time and shop more frequently, all of which are important to the life cycle of membership.
If they have bigger baskets and they shop more frequently, they are more likely to renew. So we feel really good about that business. we continue to see it trending well and expect it will do so in the future.

Operator

Edward Kelly, Wells Fargo.

Edward Kelly

Bob, I was curious if you could just take a step back and maybe talk about the timing of the fee increase as it pertains to why it’s right for your company today. And as part of this, could you talk about first year retention rates, trend in discounting related to signing up members? And just kind of what I’m getting at is just a bit more detail around how you’re feeling about the momentum of new member growth?

Robert Eddy

Yes. Thanks for the question. I’ll take the last part of the question first. We feel really bullish about our momentum from a membership perspective. I was asked recently what the biggest unlock in our company has been over the past several years, and it has been exactly this point, the ability to grow our membership period, but also specifically to do it in comp clubs, right?
Our team has done a nice job figuring out the right mix of ways to interact with potential new members. And then once they’re signed up to engage those new members. And that’s really allowed us to put up some of the numbers that we’ve been putting up quarter after quarter and year after year. We’re incredibly proud of the team for doing that. It is it’s quite possibly the thing that I’m most excited about in running the company. Obviously, membership underlies everything we do.
And whether it’s our ability to sign up new members or renew the ones that we have, the team has made just incredible gains in the last several quarters and the last couple of years. Our first year renewal rates are at all-time highs. They have a 7 handle on them. That’s as high as we’ve ever seen them. We’ve got another good year on tap from a tenured renewal rate as well. And that’s really a testament to the overall business that we’re running, right?
We’re finding the members to sign up. We are engaging them at the right time. And we are continually showing them value, saving them time through our digital properties and putting fantastic assortments in front of them. So I think we really do have that flywheel going in this part of our business, and hopefully, we can build upon that in the rest of our business.
As it leads into this fee increase discussion. We think this is the right time for all the reasons I talked about in the prepared part of the call today. We have invested an incredible amount in our business over the past 7 years since our last fee increase. And I gave you some of those data points.
They’re fairly powerful when we look at it. And we have been hearing from our members that we’re doing a great job. They’re certainly showing us that through their performance and their behaviors. And frankly, we don’t want to disrupt the momentum that we have out there. But I think the behaviors that we’re seeing today would tell us that there’s little disruption to come.
We’ve done a nice job, as I said, getting them integrated into our business and renewing them well. There’s always a little risk from a renewal rate perspective when you raise the fee, but I would imagine this time around, given the performance of our business in general, that it will be significantly less risk than the last time that we raised the fees. And so we’re pretty bullish on our ability to do it.
And we’re doing it really because it will allow us to invest further into the value of a BJ’s membership. We will continue to raise our labor rates and our labor hours in the clubs in order to best service our members and do things like the digital conveniences and obviously, fresh has a higher component of labor to it than other parts of our business.
It will allow us to really focus even harder on the value that we provide in terms of price and promotion and invest in other areas of our business as well. So I think it’s the right time. I think we’re very, very happy with the momentum that we have, and I don’t see that momentum slowing down.

Operator

Kate McShane, Goldman Sachs.

Katharine McShane

The first question I wanted to ask was just about your comments around adding gas stations to existing clubs. We wondered what kind of lift you see to membership and/or comps? And how big of an opportunity could that be going forward?

Robert Eddy

Thanks for the question. This has been an interesting thing to put a gas station in a club like Metro Massachusetts that’s 40 years old. It was a little bit of a feat of engineering, and it’s obviously always an interesting proposition to get the zoning approval from the relevant authorities to put guests in the ground anywhere, but never mind in the way that we did it. And we’ll continue to do that because we do see a big benefit in the performance.
I would venture to say every club that we have that has gas performs better than similar clubs without gas. And they do it in the 2 ways that are most important. They comp better and membership renewal rates are higher. You know that gas is probably the best way to show value out there. Everybody knows a good gas price because there’s a sign on every street corner. And we tend to have better prices than the Street. And we then layer on all sorts of gas discounts on top of it up to $0.15 a gallon with our top-tier credit card.
So we take a great price and making an outstanding value that way. And so it’s a great way to show value. It’s a great way to get people in our parking lots. It’s a great way to get people shopping in our buildings as well. And we’ll generally add gas just about anywhere we can figure out how to do it, whether it’s with a new club or with an existing club, whether it’s on the pad or shortly off the pad, because we do think it really improves the trend of the club.
Bill’s team has done an outstanding job finding ways to do this and going back and sort of mining our existing club infrastructure to see if we can figure out ways to do it, and we’ll continue to do that for the foreseeable future.

Katharine McShane

And then we just wanted to ask a question on the CMP initiative. You mentioned you’re through grocery and sundries. We wondered if you’re ahead of where you thought you’d be when you spoke to at the end of the second quarter? And if there is an end date of when you’re through and when these costs will persist into ’25?

Robert Eddy

That’s a great question. CMP, I don’t think we’ll ever really stop. It will ultimately become embedded in the way that our merchandising team goes to work every day. We — relative to your cost question, we did have some external help in this up and running and the costs that are running through the P&L today are representative of that.
Over time, that will that cost will fall off, and it will be our internal team that’s doing it. It’s a great program. It is yielding very good results. Those categories that have gone through the CMP process in the aggregate are doing better than those that haven’t. We’ll continue to go through those categories that haven’t been through CMP were sort of tinkering with other categories that are harder to put through the type of a model, like our perishable categories, given the volatility and the seasonality and things in perishables.
But the core tenets of — let’s look at the data and understand what our members actually want from us from an assortment perspective and figure out the right cost to buy it at are relevant in every category in the building. And so whether we run it through the official CMP route or not. I think every category in the building will go through at least those 2 pieces of it. And hopefully, yield great results.
We did have some uneven execution as we went through CMPs this year, and we will get better at doing that and changing the assortment. But the confidence that the results give us to proceed is significant. Like I said, those categories that go through this process, perform better in comp and margin rate than those that haven’t. And so we’ll continue to do it. Our merchandising team has done a fantastic job. Our analytics team has done a fantastic job with it. and it will be a key part of how the team goes to work in the future.

Operator

Simeon Gutman, Morgan Stanley.

This is Zach on for Simeon. Given the increased rate of unit openings, can you give us a little bit more color on what preopening expenses might look like in the fourth quarter, please?

Laura Felice

Zach, we’re thinking about preopening for the fourth quarter around $15 million. That corresponds to the pace of openings in Q4 versus Q3, it will accelerate. And so that’s kind of how we’re thinking about it for the fourth quarter.

And then just as a quick follow-up. Regarding the Fresh 2.0 strategy, appreciate the color you’ve given on the call this morning. As a follow-up, are you finding vendors supportive at all to fund some of those investments in Fresh 2.0?

Robert Eddy

Look, I think the supplier community has been great as we’ve changed our assortment. As we talked about, we have done a bunch of different things with the vendor community. We’ve put in different items. We’ve changed pack sizes. We changed how things are transported over what time they’re transported. We’ve done a lot of things in those supplier partners of ours have been very willing to help us in this initiative. And frankly, they’ve been rewarded as much as we have with double-digit comp growth, mostly coming from units. That’s all extra business for them as well.
The thing that makes it a little bit lesser margin for us is, frankly, the labor component in our clubs. And you think about the difference between dropping a pallet of Fruit Loops on the floor versus hand stacking tomatoes or asparagus or bag of salad or something. There is a slightly different model at play there that is a little bit more costly to run in our environment versus standard pallet configuration.
That’s something we’re absolutely willing to tolerate because we believe in the ultimate payback from our members as we talked about those folks that buy our fresh categories from us are our best members, period. And they are worth tremendously more lifetime value than those that do not.
We have a reasonable population of folks that don’t buy Fresh from us at this point. And we are day by day convincing them to do that by putting better products on the floor and presenting them in a way that matters and a pricing that is an attractive value. And so we’ll continue to make that investment because it ultimately will help drive the entire box, not just perishables business. That’s really the key part of this program.
If we just grow produce comps, that’s fine, and we’ll take that. But the real magic, and we’re starting to see that in the club set have had this program for about a year now. We’re starting to see the overall traffic in those boxes lift.
And that’s what we saw in the test clubs that we did, and now we’re starting to see it in other clubs. That will help us next year, the year after, the year after that as we deepen our relationship with these members and really get that repeat traffic coming.

Operator

Chuck Grom, Gordon Haskett.

Charles Grom

Just two questions for me, one near term, one longer term. On the near-term merch margins, can you talk about the expectations for the merch margin rate to be flat for the year? The fourth quarter guide looks a little bit conservative given the lap, especially against the co-brand card cost last year. So if you talk about puts and takes here in the fourth quarter.
And then bigger picture, congrats on getting the 7.5 million members, I think that’s about 30,000 per club, which is up about I think, from 23,000 per club in 2019. Can you just discuss the opportunity and strategy to expand the membership within your existing footprint? It just seems like there’s still a big opportunity relative to your 2 largest peers, particularly Costco.

Robert Eddy

Yes. Thanks, Chuck. Maybe I’ll talk about membership and Laura can talk to merch margins. I think you’re right. I think 7.5 million members is fantastic. We’re very proud of the progress we’ve made over the past several years in the total amount of members, but also the members per club that you bring up.
As we’ve talked about in the past, the disconnect between ourselves and our competitors over time has largely been a math exercise. Having to do with our renewal rates for many years of the company’s history, the renewal rate — tenured renewal rate was in the low 80% range and having been at 90% now for a few years and hopefully for the future.
We’re obviously retaining more and more members every year, and that math is quite powerful. And as I said, we’re also finding great ways to grow membership in comp clubs, innovative ways to talk to folks, different promotions to get people to come and be members. We’re attracting more and more members through digital properties today than we ever have well over 50% of our members come in through digital means today.
So we’ve just done a lot of things right, not everything right, not everything at the same time. We’ve still got stuff to work on. But we’ve really come a long way from where we were 3, 5, 7, 10 years ago from this perspective, where we were just trying to fill a leaky bucket 10 years ago, and now we’re growing day by day, quarter by quarter, year by year. So a lot to be happy about.
We are by no means done and all the things that we talk about, whether it’s Fresh 2.0 or the general merchandise transformation or the digital properties, those are all aimed at the same point. We’re trying to grow the total size and quality of our membership base. And that won’t be done overnight, but hopefully, the next few years make as much progress as the last few years — that we really are excited about the momentum that we have and we have a lot of fun stuff on tap to try and keep that going. Laura, do you want to talk about merch margins quickly?

Laura Felice

Yes. Chuck. On merch margins, I would offer a little bit more color on what we’ve already talked about a couple of times here. We’re really happy with the March margin growth we delivered in Q3. It was a little bit better than we expected, gets us to about flat as we sit here today, year-to-date.
As we think about Q4, I think it’s — our guide for the full year is flat. And so that gets us to about where we are today. We’re really happy with the progress we’re making on CMP, which we’ve talked about and our fresh business. And so both of those things we’ve factored in as we think about our margins in Q4.

Operator

Thank you very much. We currently have no further questions. So I’d like to hand back to Bob Eddy for any closing remarks.

Robert Eddy

Thanks, Carlin. Thanks, everybody, for your attention this morning and for your support of our company. We’re really excited about our future. And hopefully, today, we’ve given you some idea of why that is. We will talk to you after our fourth quarter and we wish you all the best holiday season. Thanks very much.

Operator

As we conclude today’s call, we’d like to thank everyone for joining. You may now disconnect your lines.