BJ BJs Wholesale Club Holdings Inc

Strong second quarter earnings driven by growth in market share, traffic, and margins

Second Quarter Fiscal 2023 Highlights

• Comparable club sales, excluding gasoline sales, increased by 1.1% year-over-year
• Digitally enabled comparable sales growth was 15.0% year-over-year
• Membership fee income increased by 5.0% year-over-year to $103.7 million
• Merchandise gross margin rate increased by 90 basis points year-over-year
• Earnings per diluted share and adjusted earnings per diluted share of $0.97
• Income from continuing operations of $131.3 million
• Adjusted EBITDA of $268.8 million
• The Company opened one new club and one new gas station

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company") today announced its financial results for the thirteen weeks and twenty-six weeks ended July 29, 2023.

“Our strong performance in the second quarter reflects our continued gains in membership, traffic and market share, driven by the great value that we provide our members every day,” said Bob Eddy, Chairman and Chief Executive Officer, BJ’s Wholesale Club. “We continue to balance gross margins with investments in value and in growing the size and quality of our membership with an eye toward the future. I’m proud of the team’s execution in the quarter and believe that we are well-positioned for continued growth.”

Key Measures for the Thirteen Weeks Ended July 29, 2023 (Second Quarter Fiscal 2023) and for the Twenty-six Weeks Ended July 29, 2023, (First Half of Fiscal 2023):

BJ'S WHOLESALE CLUB HOLDINGS, INC.(Amounts in thousands, except per share amounts)  

 

13 Weeks Ended July 29, 2023

 

13 Weeks Ended July 30, 2022

 

% Growth (Decline)

 

26 Weeks Ended July 29, 2023

 

26 Weeks Ended July 30, 2022

 

% Growth (Decline)

Net sales

$

4,859,842

 

$

5,005,030

 

(2.9

)%

 

$

9,480,462

 

$

9,404,840

 

0.8

%

Membership fee income

 

103,698

 

 

98,786

 

5.0

%

 

 

206,220

 

 

195,411

 

5.5

%

Total revenues

 

4,963,540

 

 

5,103,816

 

(2.7

)%

 

 

9,686,682

 

 

9,600,251

 

0.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

200,269

 

 

202,910

 

(1.3

)%

 

 

387,039

 

 

353,227

 

9.6

%

Income from continuing operations

 

131,325

 

 

141,014

 

(6.9

)%

 

 

247,313

 

 

253,471

 

(2.4

)%

Adjusted EBITDA (a)

 

268,760

 

 

273,700

 

(1.8

)%

 

 

525,743

 

 

494,501

 

6.3

%

Net income

 

131,325

 

 

141,007

 

(6.9

)%

 

 

247,402

 

 

253,457

 

(2.4

)%

EPS (b)

 

0.97

 

 

1.03

 

(5.8

)%

 

 

1.83

 

 

1.85

 

(1.1

)%

Adjusted net income (a)

 

131,192

 

 

144,296

 

(9.1

)%

 

 

246,839

 

 

262,722

 

(6.0

)%

Adjusted EPS (a)

 

0.97

 

 

1.06

 

(8.5

)%

 

 

1.82

 

 

1.92

 

(5.2

)%

Basic weighted-average shares outstanding

 

133,317

 

 

134,341

 

 

 

 

133,314

 

 

134,293

 

 

Diluted weighted-average shares outstanding

 

135,129

 

 

136,567

 

 

 

 

135,515

 

 

136,635

 

 

(a)

See “Note Regarding Non-GAAP Financial Information.”

(b) EPS represents net income per diluted share.

Additional Highlights:

• Total comparable club sales decreased by 5.3% in the second quarter of fiscal 2023 compared to the second quarter of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales increased by 1.1% in the second quarter of fiscal 2023 compared to the same period in fiscal 2022. Total comparable club sales decreased by 1.9% in the first half of fiscal 2023 compared to the first half of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales increased by 3.3% in the first half of fiscal 2023 compared to the first half of fiscal 2022.

• Gross profit increased to $896.8 million in the second quarter of fiscal 2023 from $860.0 million in the second quarter of fiscal 2022. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 90 basis points over the same quarter of fiscal 2022. Gross profit increased to $1,776.8 million in the first half of fiscal 2023 from $1,651.2 million in the first half of fiscal 2022. Merchandise gross margin rate increased by 100 basis points in the first half of fiscal 2023. Merchandise margins were positively impacted by disinflation, moderated supply chain costs and improved inventory management for both comparative periods.

• Selling, general and administrative expenses ("SG&A") increased to $695.0 million in the second quarter of fiscal 2023 compared to $651.2 million in the second quarter of fiscal 2022. SG&A increased to $1,384.3 million in the first half of fiscal 2023 compared to $1,287.2 million in the first half of fiscal 2022. The increase in both comparative periods was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings in addition to other investments to drive strategic priorities.

• Income from continuing operations before income taxes decreased to $184.0 million in the second quarter of fiscal 2023 compared to $192.0 million in the second quarter of fiscal 2022. Income from continuing operations before income taxes increased to $356.1 million in the first half of fiscal 2023 compared to $334.5 million in the first half of fiscal 2022.

• The effective tax rate increased to 28.6% in the second quarter of fiscal 2023 compared to 26.6% in the second quarter of fiscal 2022. Income tax expense increased to $52.7 million in the second quarter of fiscal 2023 compared to $51.0 million in the second quarter of fiscal 2022. The effective tax rate increased to 30.5% in the first half of fiscal 2023 compared to 24.2% in the first half of fiscal 2022. Income tax expense increased to $108.8 million in the first half of fiscal 2023 compared to $81.0 million in the first half of fiscal 2022. Lower excess tax benefits from stock-based compensation and lower tax credits resulted in increases in the effective tax rates for the second quarter and first half of fiscal 2023. The effective tax rate for the first half of fiscal 2023 was also impacted by an immaterial adjustment to certain deferred tax assets related to prior periods.

• Net income decreased to $131.3 million in the second quarter of fiscal 2023 compared to $141.0 million in the second quarter of fiscal 2022. Net income decreased to $247.4 million in the first half of fiscal 2023 compared to $253.5 million in the first half of fiscal 2022.

• Adjusted EBITDA decreased by 1.8% to $268.8 million in the second quarter of fiscal 2023 compared to $273.7 million in the second quarter of fiscal 2022. Adjusted EBITDA increased by 6.3% to $525.7 million in the first half of fiscal 2023 compared to $494.5 million in the first half of fiscal 2022.

• Under its existing share repurchase program, the Company repurchased 715,122 shares of common stock, totaling $44.6 million in the second quarter of fiscal 2023. In the first half of fiscal 2023, the Company repurchased 919,162 shares of common stock, totaling $59.9 million, under such program.

Fiscal 2023 Ending February 3, 2024 Outlook

“As we look ahead, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value. However, we also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our outlook for the rest of the fiscal year,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ's Wholesale Club. “For fiscal 2023, we expect our comparable club sales, excluding the impact of gasoline sales, to increase approximately 2% year-over-year. We expect our fiscal 2023 membership fee income to increase approximately 5% year-over-year and merchandise gross margins to improve by approximately 50 basis points year-over-year. Finally, we expect fiscal 2023 GAAP and adjusted EPS to be in the $3.80 to $3.92 range.”

Conference Call Details

A conference call to discuss the second quarter of fiscal 2023 financial results is scheduled for today, August 22, 2023, at 8:00 A.M. Eastern Time. The live audio webcast of the call can be accessed under the “Events & Presentations” section of the Company’s investor relations website at https://investors.bjs.com and will remain available for one year. Participants may also dial (833) 470-1428 within the U.S. or (929) 526-1599 outside the U.S. and reference conference ID 078818. A telephonic replay will be available two hours after the conclusion of the call for one week and can be accessed by dialing (929) 458-6194 or (866) 813-9403 and referencing conference ID 519735.

About BJ’s Wholesale Club Holdings, Inc.

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) is a leading operator of membership warehouse clubs focused on delivering significant value to its members and serving a shared purpose: “We take care of the families who depend on us.” The Company provides a curated assortment of grocery, general merchandise, gasoline and ancillary services to offer a differentiated shopping experience that is further enhanced by its omnichannel capabilities. Headquartered in Marlborough, Massachusetts, the Company pioneered the warehouse club model in New England in 1984 and currently operates 238 clubs and 168 BJ's Gas® locations in 19 states. For more information, please visit us at www.bjs.com.

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 2023 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, including, without limitation, as a result of disruptions and instability in the banking and financial services industries, 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); 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 grow our BJ's One Mastercard® program; 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 16, 2023, and subsequent filings with the SEC, which are 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 July 29, 2023

 

Thirteen Weeks Ended July 30, 2022

 

Twenty-six Weeks Ended July 29, 2023

 

Twenty-six Weeks Ended July 30, 2022

Net sales

$

4,859,842

 

$

5,005,030

 

 

$

9,480,462

 

$

9,404,840

 

Membership fee income

 

103,698

 

 

98,786

 

 

 

206,220

 

 

195,411

 

Total revenues

 

4,963,540

 

 

5,103,816

 

 

 

9,686,682

 

 

9,600,251

 

Cost of sales

 

4,066,727

 

 

4,243,769

 

 

 

7,909,877

 

 

7,949,043

 

Selling, general and administrative expenses

 

694,960

 

 

651,236

 

 

 

1,384,288

 

 

1,287,180

 

Pre-opening expense

 

1,584

 

 

5,901

 

 

 

5,478

 

 

10,801

 

Operating income

 

200,269

 

 

202,910

 

 

 

387,039

 

 

353,227

 

Interest expense, net

 

16,274

 

 

10,874

 

 

 

30,964

 

 

18,715

 

Income from continuing operations before income taxes

 

183,995

 

 

192,036

 

 

 

356,075

 

 

334,512

 

Provision for income taxes

 

52,670

 

 

51,022

 

 

 

108,762

 

 

81,041

 

Income from continuing operations

 

131,325

 

 

141,014

 

 

 

247,313

 

 

253,471

 

Income (loss) from discontinued operations, net of income taxes

 

—

 

 

(7

)

 

 

89

 

 

(14

)

Net income

$

131,325

 

$

141,007

 

 

$

247,402

 

$

253,457

 

Income per share attributable to common stockholders - basic:

 

 

 

 

 

 

 

Income from continuing operations

$

0.99

 

$

1.05

 

 

$

1.86

 

$

1.89

 

Income (loss) from discontinued operations

 

—

 

 

—

 

 

 

—

 

 

—

 

Net income

$

0.99

 

$

1.05

 

 

$

1.86

 

$

1.89

 

Income per share attributable to common stockholders - diluted:

 

 

 

 

 

 

 

Income from continuing operations

$

0.97

 

$

1.03

 

 

$

1.82

 

$

1.86

 

Income (loss) from discontinued operations

 

—

 

 

—

 

 

 

0.01

 

 

(0.01

)

Net income

$

0.97

 

$

1.03

 

 

$

1.83

 

$

1.85

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

133,317

 

 

134,341

 

 

 

133,314

 

 

134,293

 

Diluted

 

135,129

 

 

136,567

 

 

 

135,515

 

 

136,635

 

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

July 29, 2023

 

July 30, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

26,210

 

$

163,681

Accounts receivable, net

 

200,279

 

 

204,495

Merchandise inventories

 

1,540,508

 

 

1,376,526

Prepaid expense and other current assets

 

76,309

 

 

57,844

Total current assets

 

1,843,306

 

 

1,802,546

 

 

 

 

Operating lease right-of-use assets, net

 

2,165,125

 

 

2,192,548

Property and equipment, net

 

1,428,576

 

 

1,232,103

Goodwill

 

1,008,816

 

 

1,008,816

Intangibles, net

 

111,568

 

 

120,123

Deferred taxes

 

7,928

 

 

4,525

Other assets

 

38,577

 

 

26,583

Total assets

$

6,603,896

 

$

6,387,244

 

 

 

 

LIABILITIES

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

411,000

 

$

350,000

Current portion of operating lease liabilities

 

179,423

 

 

171,568

Accounts payable

 

1,226,490

 

 

1,243,286

Accrued expenses and other current liabilities

 

774,235

 

 

719,291

Total current liabilities

 

2,591,148

 

 

2,484,145

 

 

 

 

Long-term operating lease liabilities

 

2,075,058

 

 

2,118,467

Long-term debt

 

448,135

 

 

699,406

Deferred income taxes

 

64,095

 

 

64,354

Other non-current liabilities

 

194,171

 

 

167,281

 

 

 

 

STOCKHOLDERS' EQUITY

 

1,231,289

 

 

853,591

Total liabilities and stockholders' equity

$

6,603,896

 

$

6,387,244

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

Twenty-six Weeks Ended July 29, 2023

 

Twenty-six Weeks Ended July 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income

$

247,402

 

 

$

253,457

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

109,015

 

 

 

97,093

 

Amortization of debt issuance costs and accretion of original issue discount

 

655

 

 

 

1,663

 

Debt extinguishment charges

 

—

 

 

 

389

 

Stock-based compensation expense

 

19,631

 

 

 

18,502

 

Deferred income tax provision

 

10,641

 

 

 

12,212

 

Changes in operating leases and other non-cash items

 

762

 

 

 

32,067

 

Increase (decrease) in cash due to changes in:

 

 

 

Accounts receivable

 

39,797

 

 

 

(29,605

)

Merchandise inventories

 

(161,957

)

 

 

(45,519

)

Accounts payable

 

30,793

 

 

 

130,503

 

Accrued expenses and other current liabilities

 

(3,606

)

 

 

(31,019

)

Other operating assets and liabilities, net

 

(23,633

)

 

 

3,309

 

Net cash provided by operating activities

 

269,500

 

 

 

443,052

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Additions to property and equipment, net of disposals and proceeds from sale leaseback transactions

 

(208,252

)

 

 

(188,860

)

Acquisition

 

—

 

 

 

(376,521

)

Net cash used in investing activities

 

(208,252

)

 

 

(565,381

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Payments on long term debt

 

—

 

 

 

(50,000

)

Proceeds from revolving lines of credit

 

312,000

 

 

 

905,000

 

Payments on revolving lines of credit

 

(306,000

)

 

 

(555,000

)

Debt issuance costs paid

 

—

 

 

 

(2,701

)

Net cash received from stock option exercises

 

1,571

 

 

 

5,018

 

Net cash received from Employee Stock Purchase Program (ESPP)

 

3,255

 

 

 

2,331

 

Acquisition of treasury stock

 

(87,271

)

 

 

(74,530

)

Proceeds from financing obligations

 

9,058

 

 

 

13,083

 

Other financing activities

 

(1,566

)

 

 

(2,627

)

Net cash (used in) provided by financing activities

 

(68,953

)

 

 

240,574

 

Net increase (decrease) in cash and cash equivalents

 

(7,705

)

 

 

118,245

 

Cash and cash equivalents at beginning of period

 

33,915

 

 

 

45,436

 

Cash and cash equivalents at end of period

$

26,210

 

 

$

163,681

 

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: acquisition and integration costs; home office transition costs; charges related to debt payments; other adjustments 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; non-cash rent; acquisition and integration costs 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 July 29, 2023

 

13 Weeks Ended July 30, 2022

 

26 Weeks Ended July 29, 2023

 

26 Weeks Ended July 30, 2022

Net income as reported

$

131,325

 

 

$

141,007

 

 

$

247,402

 

 

$

253,457

 

Adjustments:

 

 

 

 

 

 

 

Acquisition and integration costs (a)

 

—

 

 

 

3,587

 

 

 

—

 

 

 

11,467

 

Home office transition costs (b)

 

—

 

 

 

600

 

 

 

—

 

 

 

1,199

 

Charges related to debt payments (c)

 

—

 

 

 

389

 

 

 

—

 

 

 

389

 

Other adjustments (d)

 

(185

)

 

 

—

 

 

 

(786

)

 

 

(165

)

Tax impact of adjustments to net income (e)

 

52

 

 

 

(1,287

)

 

 

223

 

 

 

(3,625

)

Adjusted net income

$

131,192

 

 

$

144,296

 

 

$

246,839

 

 

$

262,722

 

 

 

 

 

 

 

 

 

Weighted-average diluted shares outstanding

 

135,129

 

 

 

136,567

 

 

 

135,515

 

 

 

136,635

 

Adjusted EPS (f)

$

0.97

 

 

$

1.06

 

 

$

1.82

 

 

$

1.92

 

(a)

Represents costs related to the acquisition and integration of assets from Burris Logistics, including due diligence, legal, and other consulting expenses.

(b)

Represents incremental rent expense as the Company transitioned home office locations in fiscal 2022.

(c)

Represents the expensing of fees and deferred fees associated with the extinguishment of the ABL Facility in fiscal 2022.

(d)

 

Other non-cash items related to the reclassification into earnings of accumulated other comprehensive income/ loss associated with the de-designation of hedge accounting and other adjustments.

(e)

Represents the tax effect of the above adjustments at a statutory tax rate of approximately 28%.

(f)

Adjusted EPS 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 July 29, 2023

 

13 Weeks Ended July 30, 2022

 

26 Weeks Ended July 29, 2023

 

26 Weeks Ended July 30, 2022

Income from continuing operations

$

131,325

 

$

141,014

 

$

247,313

 

$

253,471

Interest expense, net

 

16,274

 

 

10,874

 

 

30,964

 

 

18,715

Provision for income taxes

 

52,670

 

 

51,022

 

 

108,762

 

 

81,041

Depreciation and amortization

 

54,825

 

 

49,984

 

 

109,015

 

 

97,093

Stock-based compensation expense

 

9,624

 

 

9,387

 

 

19,631

 

 

18,502

Pre-opening expenses (a)

 

1,584

 

 

5,901

 

 

5,478

 

 

10,801

Non-cash rent (b)

 

2,281

 

 

1,256

 

 

3,832

 

 

2,102

Acquisition and integration costs (c)

 

—

 

 

3,588

 

 

—

 

 

11,467

Other adjustments (d)

 

177

 

 

674

 

 

748

 

 

1,309

Adjusted EBITDA

$

268,760

 

$

273,700

 

$

525,743

 

$

494,501

(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)

 

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 transitioned home office locations in fiscal 2022.

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation to Free Cash Flow

(Amounts in thousands)

(Unaudited)

 

 

13 Weeks Ended July 29, 2023

 

13 Weeks Ended July 30, 2022

 

26 Weeks Ended July 29, 2023

 

26 Weeks Ended July 30, 2022

Net cash provided by operating activities

$

150,368

 

$

398,744

 

$

269,500

 

$

443,052

Less: Additions to property and equipment, net of disposals

 

122,156

 

 

101,001

 

 

214,240

 

 

191,534

Plus: Proceeds from sale leaseback transactions

 

5,988

 

 

2,674

 

 

5,988

 

 

2,674

Free cash flow

$

34,200

 

$

300,417

 

$

61,248

 

$

254,192

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation of Net Debt and Net Debt to LTM adjusted EBITDA

(Amounts in thousands)

(Unaudited)

 

 

July 29, 2023

Total debt

$

859,135

Less: Cash and cash equivalents

 

26,210

Net Debt

$

832,925

 

 

Income from continuing operations

$

508,104

Interest expense, net

 

59,711

Provision for income taxes

 

203,983

Depreciation and amortization

 

212,856

Stock-based compensation expense

 

43,746

Pre-opening expenses

 

19,610

Non-cash rent

 

5,721

Acquisition and integration costs

 

857

Home office transition costs

 

14,706

Other adjustments

 

81

Adjusted EBITDA

$

1,069,375

 

 

Net debt to LTM adjusted EBITDA

0.8x

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/20230822797922/en/

Investors: Catherine Park Vice President, Investor Relations cpark@bjs.com 774-512-6744

Media: Kirk Saville Head of Corporate Communications ksaville@bjs.com 774-512-5597