Company reports record MFI and surpasses 6.5
million members
First Quarter Fiscal 2022 Highlights
- Total comparable club sales increased by 14.4%
year-over-year.
- Comparable club sales, excluding gasoline sales, increased by
4.1% year-over-year.
- Membership fee income increased by 11.9% to $96.6 million
year-over-year.
- Digitally enabled sales growth was 26.0%.
- Earnings per diluted share of $0.82 reflects a 39.0%
year-over-year increase.
- Adjusted earnings per diluted share of $0.87 reflects a 20.8%
year-over-year increase.
- Maintained strong balance sheet with quarter ended funded
leverage of 0.9x.
BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company")
today announced its financial results for the thirteen weeks ended
April 30, 2022.
“Our performance in the first quarter was strong, as gains in
member traffic underscored the value we provide. Our business model
remains more relevant than ever in the current inflationary
environment,” said Bob Eddy, President and Chief Executive Officer,
BJ’s Wholesale Club.
“We also continued to build on the transformational gains we
have driven over the last two years,” continued Mr. Eddy. “Our
membership has never been stronger. We reached 6.5 million members
in the first quarter, which serves as a testament to the value that
we consistently deliver to our members. Our digital business
remains a key competitive advantage. We’re quickly expanding our
footprint and we recently closed the acquisition of our perishable
distribution network, which will support our future growth efforts
and drive long-term shareholder value.”
Key Measures for the Thirteen Weeks
Ended April 30, 2022 (First Quarter of Fiscal 2022):
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
(Amounts in thousands, except per share
amounts)
13 Weeks Ended April 30,
2022
13 Weeks Ended May 1,
2021
% Growth
Net sales
$
4,399,810
$
3,781,834
16.3
%
Membership fee income
96,625
86,388
11.9
%
Total revenues
4,496,435
3,868,222
16.2
%
Operating income
150,317
126,254
19.1
%
Income from continuing operations
112,457
81,586
37.8
%
Adjusted EBITDA (a)
220,801
202,410
9.1
%
Net income
112,450
81,579
37.8
%
EPS (b)
0.82
0.59
39.0
%
Adjusted net income (a)
118,426
99,694
18.8
%
Adjusted EPS (a)
0.87
0.72
20.8
%
Basic weighted average shares
outstanding
134,244
135,709
(1.1
)%
Diluted weighted average shares
outstanding
136,702
138,662
(1.4
)%
(a) See “Note Regarding Non-GAAP Financial
Information.”
(b) EPS represents earnings per diluted
share.
Additional Highlights:
- Total comparable club sales increased by 14.4% in the first
quarter of fiscal 2022 compared to the first quarter of fiscal
2021. Excluding the impact of gasoline sales, comparable club sales
increased by 4.1% in the first quarter of fiscal 2022 compared to
the first quarter of fiscal 2021.
- Gross profit increased to $790.6 million in the first quarter
of fiscal 2022 from $726.7 million in the first quarter of fiscal
2021. Merchandise gross margin rate, which excludes gasoline sales
and membership fee income, decreased 30 basis points over the first
quarter of fiscal 2021. Merchandise margins were impacted by
increased freight costs and tactical investments in inflationary
categories.
- Selling, general and administrative expenses ("SG&A")
increased to $635.4 million in the first quarter of fiscal 2022,
compared to $599.9 million in the first quarter of fiscal 2021. The
increase was primarily driven by increased labor costs as a result
of last year’s wage investments, occupancy costs as a result of new
club openings, and acquisition and integration expenses related to
the acquisition of assets from Burris Logistics.
- Operating income increased to $150.3 million, or 3.3% of total
revenues, in the first quarter of fiscal 2022 compared to $126.3
million, or 3.3% of total revenues, in the first quarter of fiscal
2021.
- Adjusted EBITDA increased 9.1% to $220.8 million in the first
quarter of fiscal 2022 compared to $202.4 million in the first
quarter of fiscal 2021.
- Income tax expense increased to $30.0 million in the first
quarter of fiscal 2022 compared to $25.4 million in the first
quarter of fiscal 2021, primarily due to higher operating income
year-over-year.
- Under its existing share repurchase program, the Company
repurchased 570,506 shares of common stock, totaling $35.8 million
in the first quarter of fiscal 2022.
- On May 2, 2022, the Company completed its acquisition of four
distribution centers and related private transportation fleet from
Burris Logistics, bringing its end-to-end perishable supply chain
in-house.
Fiscal 2022 Ending January 28, 2023 Outlook
“We are pleased with our performance in the first quarter and
remain optimistic that the strength of our core business will
continue to drive long-term growth,” said Laura Felice, Executive
Vice President, Chief Financial Officer, BJ's Wholesale. “Our
fiscal year 2022 EPS outlook of flat year-over-year remains
unchanged.”
Conference Call Details
A conference call to discuss the first quarter of fiscal 2022
financial results is scheduled for today, May 19, 2022, at 8:30
A.M. Eastern Time. Investors and analysts interested in
participating in the call are invited to dial 844-200-6205
(international callers please dial 929-526-1599) approximately 10
minutes prior to the start of the call and reference conference ID
068574. A live audio webcast of the conference call will be
available online at https://investors.bjs.com.
A recorded replay of the conference call will be available
within two hours of the conclusion of the call and can be accessed
both online at https://investors.bjs.com and by dialing
929-458-6194 or 866-813-9403 and referencing conference ID 857294.
The recorded replay will be available for one week and an online
archive of the webcast will be available for one year.
About BJ’s Wholesale Club Holdings, Inc.
Headquartered in Westborough, Massachusetts, BJ's Wholesale Club
Holdings, Inc. is a leading operator of membership warehouse clubs
in the Eastern United States. The Company currently operates 229
clubs and 159 BJ's Gas® locations in 17 states.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including, without limitation,
statements regarding our strategic priorities; our anticipated
fiscal 2022 outlook; and our future progress, as well as statements
that include the words “expect,” “intend,” “plan,” “believe,”
“project,” “forecast,” “estimate,” “may,” “should,” “anticipate”
and similar statements of a future or forward-looking nature. These
forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees,
but involve known and unknown risks, uncertainties and other
important factors that may cause actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to:
uncertainties in the financial markets, consumer and small business
spending patterns and debt levels; our dependence on having a large
and loyal membership; domestic and international economic
conditions, including inflation and exchange rates; our ability to
procure the merchandise we sell at the best possible prices; the
effects of competition and regulation; our dependence on vendors to
supply us with quality merchandise at the right time and at the
right price; breaches of security or privacy of member or business
information; conditions affecting the acquisition, development,
ownership or use of real estate; our capital spending; actions of
vendors; our ability to attract and retain a qualified management
team and other team members; costs associated with employees
(generally including health care costs), energy and certain
commodities, geopolitical conditions (including tariffs); the risks
and uncertainties related to the impact of the COVID-19 pandemic,
including the duration, scope and severity of the pandemic,
federal, state and local government actions or restrictive measures
implemented in response to COVID-19, the effectiveness of such
measures, as well as the effect of any relaxation or revocation of
current restrictions, and the direct and indirect impact of such
measures; changes in our product mix or in our revenues from
gasoline sales; our failure to successfully maintain a relevant
omnichannel experience for our members; risks related to our growth
strategy to open new clubs; risks related to our e-commerce
business; our ability to realize the anticipated benefits of the
Burris acquisition; and other important factors discussed under the
caption “Risk Factors” in our Form 10-K filed with the U.S.
Securities and Exchange Commission (“SEC”) on March 17, 2022, which
is accessible on the SEC’s website at www.sec.gov. These and other
important factors could cause actual results to differ materially
from those indicated by the forward-looking statements made in this
press release. Any such forward-looking statements represent
management’s estimates as of the date of this press release. While
we may elect to update such forward-looking statements at some
point in the future, unless required by law, we disclaim any
obligation to do so, even if subsequent events cause our views to
change. Thus, one should not assume that our silence over time
means that actual events are bearing out as expressed or implied in
such forward-looking statements. These forward-looking statements
should not be relied upon as representing our views as of any date
subsequent to the date of this press release.
Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized
under United States generally accepted accounting principles
(“GAAP”). Please see “Note Regarding Non-GAAP Financial
Information" and “Reconciliation of GAAP to Non-GAAP Financial
Information” below for additional information and a reconciliation
of the Non-GAAP financial measures to the most comparable GAAP
financial measures.
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(Amounts in thousands, except per share
amounts)
(Unaudited)
Thirteen Weeks Ended April 30,
2022
Thirteen Weeks Ended May 1,
2021
Net sales
$
4,399,810
$
3,781,834
Membership fee income
96,625
86,388
Total revenues
4,496,435
3,868,222
Cost of sales
3,705,838
3,141,497
Selling, general and administrative
expenses
635,380
599,910
Pre-opening expense
4,900
561
Operating income
150,317
126,254
Interest expense, net
7,841
19,285
Income from continuing operations before
income taxes
142,476
106,969
Provision for income taxes
30,019
25,383
Income from continuing operations
112,457
81,586
Loss from discontinued operations, net of
income taxes
(7
)
(7
)
Net income
$
112,450
$
81,579
Income per share attributable to common
stockholders - basic:
Income from continuing operations
$
0.84
$
0.60
Loss from discontinued operations
—
—
Net income
$
0.84
$
0.60
Income per share attributable to common
stockholders - diluted:
Income from continuing operations
$
0.82
$
0.59
Loss from discontinued operations
—
—
Net income
$
0.82
$
0.59
Weighted average number of shares
outstanding:
Basic
134,244
135,709
Diluted
136,702
138,662
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands, except per share
amounts)
(Unaudited)
April 30, 2022
May 1, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
37,952
$
62,954
Accounts receivable, net
210,405
197,991
Merchandise inventories
1,462,098
1,120,334
Prepaid expense and other current
assets
58,814
54,258
Total current assets
1,769,269
1,435,537
Operating lease right-of-use assets,
net
2,177,777
2,119,629
Property and equipment, net
989,658
815,303
Goodwill
924,134
924,134
Intangibles, net
122,332
132,502
Deferred taxes
4,595
3,349
Other assets
22,240
18,752
Total assets
$
6,010,005
$
5,449,206
LIABILITIES
Current liabilities:
Current portion of long-term debt
$
80,000
$
210,000
Current portion of operating lease
liabilities
169,423
132,869
Accounts payable
1,267,102
1,023,140
Accrued expenses and other current
liabilities
692,530
669,924
Total current liabilities
2,209,055
2,035,933
Long-term lease liabilities
2,107,532
2,050,950
Long-term debt
748,987
747,311
Deferred income taxes
58,511
45,529
Other noncurrent liabilities
164,578
155,959
STOCKHOLDERS' EQUITY
721,342
413,524
Total liabilities and stockholders'
equity
$
6,010,005
$
5,449,206
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands, except per share
amounts)
(Unaudited)
Thirteen Weeks Ended April 30,
2022
Thirteen Weeks Ended May 1,
2021
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
112,450
$
81,579
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
47,109
44,386
Amortization of debt issuance costs and
accretion of original issue discount
832
891
Debt extinguishment charges
—
657
Stock-based compensation expense
9,115
27,300
Deferred income tax provision
(benefit)
6,299
(233
)
Changes in operating leases and other
non-cash items
29,892
1,200
Increase (decrease) in cash due to changes
in:
Accounts receivable
(36,454
)
(25,272
)
Merchandise inventories
(219,163
)
85,361
Accounts payable
154,319
35,066
Accrued expenses
(58,780
)
13,127
Other operating assets and liabilities,
net
(1,311
)
(15,097
)
Net cash provided by operating
activities
44,308
248,965
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property and equipment, net
of disposals and proceeds from sale leaseback transactions
(90,533
)
(58,060
)
Net cash used in investing activities
(90,533
)
(58,060
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Payments on First Lien Term Loan
—
(100,000
)
Net proceeds from (payments on) ABL
Facility
80,000
(50,000
)
Net cash received from stock option
exercises
2,306
1,497
Acquisition of treasury stock
(51,342
)
(24,031
)
Proceeds from financing obligations
8,072
1,333
Changes in finance leases and other
financing activities
(295
)
(268
)
Net cash provided by (used in) financing
activities
38,741
(171,469
)
Net increase (decrease) in cash and cash
equivalents
(7,484
)
19,436
Cash and cash equivalents at beginning of
period
45,436
43,518
Cash and cash equivalents at end of
period
$
37,952
$
62,954
Note Regarding Non-GAAP Financial Information
This press release includes financial measures that are not
calculated in accordance with GAAP, including adjusted net income,
adjusted net income per diluted share, adjusted EBITDA, free cash
flow, net debt and net debt to last twelve months (“LTM”) adjusted
EBITDA.
We define adjusted net income as net income attributable to
common stockholders adjusted for: stock-based compensation related
to acceleration of stock awards; acquisition and integration costs;
incremental home office expense; severance charges; expenses
related to debt payments; loss on cash flow hedge; and the tax
impact of the foregoing adjustments on net income.
We define adjusted net income per diluted share as adjusted net
income divided by the weighted-average diluted shares
outstanding.
We define adjusted EBITDA as income from continuing operations
before interest expense, net, provision for income taxes and
depreciation and amortization, adjusted for the impact of certain
other items, including: stock-based compensation expense;
pre-opening expenses; acquisition and integration costs; non-cash
rent; severance and other adjustments.
We define free cash flow as net cash provided by operating
activities less additions to property and equipment, net of
disposals, plus proceeds from sale leaseback transactions.
We define net debt as total debt outstanding less cash and cash
equivalents.
We define net debt to LTM adjusted EBITDA as net debt at the
balance sheet date divided by adjusted EBITDA for the trailing
twelve-month period.
We present adjusted net income, adjusted net income per diluted
share and adjusted EBITDA, which are not recognized financial
measures under GAAP, because we believe such measures assist
investors and analysts in comparing our operating performance
across reporting periods on a consistent basis by excluding items
that we do not believe are indicative of our core operating
performance. In addition, adjusted EBITDA excludes pre-opening
expenses, because we do not believe these expenses are indicative
of the underlying operating performance of our clubs. The amount
and timing of pre-opening expenses are dependent on, among other
things, the size of new clubs opened and the number of new clubs
opened during any given period.
Management believes that adjusted net income, adjusted net
income per diluted share and adjusted EBITDA are helpful in
highlighting trends in our core operating performance compared to
other measures, which can differ significantly depending on
long-term strategic decisions regarding capital structure, the tax
jurisdictions in which companies operate and capital investments.
We use adjusted net income, adjusted net income per diluted share
and adjusted EBITDA to supplement GAAP measures of performance in
the evaluation of the effectiveness of our business strategies; to
make budgeting decisions; and to compare our performance against
that of other peer companies using similar measures. We also use
adjusted EBITDA in connection with establishing discretionary
annual incentive compensation.
We present free cash flow, which is not a recognized financial
measure under GAAP, because we use it to report to our Board of
Directors and we believe it assists investors and analysts in
evaluating our liquidity. Free cash flow should not be considered
as an alternative to cash flows from operations as a liquidity
measure. We present net debt and net debt to LTM adjusted EBITDA,
which are not recognized as financial measures under GAAP, because
we use them to report to our Board of Directors and we believe they
assist investors and analysts in evaluating our borrowing capacity.
Net debt to LTM adjusted EBITDA is a key financial measure that is
used by management to assess the borrowing capacity of the
Company.
You are encouraged to evaluate these adjustments and the reasons
we consider them appropriate for supplemental analysis. In
evaluating adjusted net income, adjusted net income per diluted
share, adjusted EBITDA and net debt to LTM adjusted EBITDA, you
should be aware that in the future we may incur expenses that are
the same as or like some of the adjustments in our presentation of
these metrics. Our presentation of adjusted net income, adjusted
net income per diluted share, adjusted EBITDA, free cash flow, net
debt and net debt to LTM adjusted EBITDA should not be considered
as alternatives to any other measure derived in accordance with
GAAP and they should not be construed as an inference that the
Company’s future results will be unaffected by unusual or
non-recurring items. There can be no assurance that we will not
modify the presentation of adjusted net income, adjusted net income
per diluted share, adjusted EBITDA or net debt to LTM adjusted
EBITDA in the future, and any such modification may be material. In
addition, adjusted net income, adjusted net income per diluted
share, adjusted EBITDA, free cash flow, net debt and net debt to
LTM adjusted EBITDA may not be comparable to similarly titled
measures used by other companies in our industry or across
different industries. Additionally, adjusted net income, adjusted
net income per diluted share, adjusted EBITDA, free cash flow, net
debt and net debt to LTM adjusted EBITDA have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results as reported under
GAAP.
Reconciliation of GAAP to Non-GAAP Financial
Information
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
Reconciliation of net income to
adjusted net income and adjusted net income per diluted
share
(Amounts in thousands, except per share
amounts)
(Unaudited)
13 Weeks Ended April
30, 2022
13 Weeks Ended May 1,
2021
Net income as reported
$
112,450
$
81,579
Adjustments:
Stock-based compensation related to
acceleration of stock awards (a)
—
17,494
Acquisition and integration costs (b)
7,879
—
Incremental home office expense (c)
599
—
(Gain) loss on cash flow hedge (d)
(165
)
4,709
Charges related to debt payments (e)
—
657
Severance (f)
—
2,300
Tax impact of adjustments to net income
(g)
(2,337
)
(7,045
)
Adjusted net income
$
118,426
$
99,694
Weighted-average diluted shares
outstanding
136,702
138,662
Adjusted net income per diluted share
(h)
$
0.87
$
0.72
(a)
Represents accelerated vesting of equity
awards, which were related to the passing of a former
executive.
(b)
Represents costs related to the
acquisition and integration of assets from Burris Logistics,
including due diligence, legal, and other consulting expenses.
(c)
Represents incremental rent expense as the
Company transitions from the current home office to a new home
office building in fiscal 2022.
(d)
Represents the reclassification into
earnings of accumulated other comprehensive income associated with
the de-designation of hedge accounting.
(e)
Represents the expensing of fees and
deferred fees and original issue discount associated with the
partial prepayment of debt.
(f)
Represents severance charges associated
with labor reductions that resulted from the realignment of our
field operations.
(g)
Represents the tax effect of the above
adjustments at a statutory tax rate of approximately 28%.
(h)
Adjusted net income per diluted share is
measured using weighted average diluted shares
outstanding.
BJ'S WHOLESALE CLUB HOLDINGS, INC.
Reconciliation to Adjusted
EBITDA
(Amounts in thousands)
(Unaudited)
13 Weeks Ended April
30, 2022
13 Weeks Ended May 1,
2021
Income from continuing
operations
$
112,457
$
81,586
Interest expense, net
7,841
19,285
Provision for income taxes
30,019
25,383
Depreciation and amortization
47,109
44,386
Stock-based compensation expense
9,115
27,300
Pre-opening expenses (a)
4,900
561
Non-cash rent (b)
846
1,417
Acquisition and integration costs (c)
7,879
—
Severance (d)
—
2,300
Other adjustments (e)
635
192
Adjusted EBITDA
$
220,801
$
202,410
(a)
Represents direct incremental costs of
opening or relocating a facility that are charged to operations as
incurred.
(b)
Consists of an adjustment to remove the
non-cash portion of rent expense.
(c)
Represents costs related to the
acquisition and integration of assets from Burris Logistics,
including due diligence, legal, and other consulting expenses.
(d)
Represents severance charges associated
with labor reductions that resulted from the realignment of our
field operations.
(e)
Other non-cash items, including non-cash
accretion on asset retirement obligations, obligations associated
with our post-retirement medical plan and incremental rent
expense as the Company transitions from the current home office to
a new home office building in fiscal 2022.
BJ'S WHOLESALE CLUB HOLDINGS, INC.
Reconciliation to Free Cash
Flow
(Amounts in thousands)
(Unaudited)
13 Weeks Ended April
30, 2022
13 Weeks Ended May 1,
2021
Net cash provided by operating
activities
$
44,308
$
248,965
Less: Additions to property and equipment,
net of disposals
90,533
74,690
Plus: Proceeds from sale leaseback
transactions
—
16,630
Free cash flow
$
(46,225
)
$
190,905
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
Reconciliation of Net Debt and Net Debt
to LTM adjusted EBITDA
(Amounts in thousands)
(Unaudited)
April 30, 2022
Total debt
$
828,987
Less: Cash and cash equivalents
37,952
Net Debt
$
791,035
Income from continuing operations
$
457,631
Interest expense, net
48,000
Provision for income taxes
135,755
Depreciation and amortization
183,270
Stock-based compensation expense
35,652
Pre-opening expenses
19,241
Non-cash rent
5,575
Acquisition and integration costs
11,383
Other adjustments
1,434
Adjusted EBITDA
$
897,941
Net debt to LTM adjusted EBITDA
0.9x
See descriptions of adjustments in the
“Reconciliation to Adjusted EBITDA (unaudited)” table above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220519005380/en/
Investor Contact: Catherine Park Vice President, Investor
Relations cpark@bjs.com 774-512-6744 Media Contact: Peter
Frangie Vice President, Corporate Communications pfrangie@bjs.com
774-512-6978
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