BJ BJs Wholesale Club Holdings Inc

Second quarter demonstrates strong momentum in membership, traffic, and unit volumes

 Second Quarter Fiscal 2024 Highlights

• Comparable club sales increased by 3.1% year-over-year
• Comparable club sales, excluding gasoline sales, increased by 2.4% year-over-year
• Digitally enabled comparable sales growth was 22.0% year-over-year
• Membership fee income increased by 9.1% year-over-year to $113.1 million
• Earnings per diluted share of $1.08 and adjusted earnings per diluted share of $1.09

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company") today announced its financial results for the thirteen weeks and twenty-six weeks ended August 3, 2024.

“Our second quarter was marked by robust membership, accelerating traffic and unit growth, and a fast-tracking digital business, which led to strong performance in the quarter. This was our tenth consecutive quarter of traffic growth. We are driving healthy membership expansion across both existing and new clubs. Our compelling value proposition is resonating with our members and we believe our results demonstrate the meaningful progress we are making on our long term strategic initiatives,” said Bob Eddy, Chairman and Chief Executive Officer, BJ’s Wholesale Club. “I am proud of our team members for their continued dedication to our purpose of ‘taking care of the families who depend on us’. We will continue to invest in the long term success of our Company and we remain excited about our future.”

Key Measures for the Thirteen Weeks Ended August 3, 2024 (Second Quarter of Fiscal 2024) and for the Twenty-six Weeks Ended August 3, 2024 (First Six Months of Fiscal 2024):

BJ'S WHOLESALE CLUB HOLDINGS, INC.

(Amounts in thousands, except per share amounts)

 

 

Thirteen Weeks Ended August 3, 2024

 

Thirteen Weeks Ended July 29, 2023

 

%

Growth (Decline)

 

Twenty-six Weeks Ended August 3, 2024

 

Twenty-six Weeks Ended July 29, 2023

 

%

Growth (Decline)

Net sales

$

5,092,279

 

$

4,859,842

 

4.8

%

 

$

9,899,408

 

$

9,480,462

 

4.4

%

Membership fee income

 

113,116

 

 

103,698

 

9.1

%

 

 

224,506

 

 

206,220

 

8.9

%

Total revenues

 

5,205,395

 

 

4,963,540

 

4.9

%

 

 

10,123,914

 

 

9,686,682

 

4.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

203,675

 

 

200,269

 

1.7

%

 

 

364,430

 

 

387,039

 

(5.8

)%

Income from continuing operations

 

144,988

 

 

131,325

 

10.4

%

 

 

256,007

 

 

247,313

 

3.5

%

Adjusted EBITDA (a) (b)

 

281,349

 

 

268,109

 

4.9

%

 

 

517,735

 

 

519,647

 

(0.4

)%

Net income

 

144,988

 

 

131,325

 

10.4

%

 

 

256,007

 

 

247,402

 

3.5

%

EPS (c)

 

1.08

 

 

0.97

 

11.3

%

 

 

1.91

 

 

1.83

 

4.4

%

Adjusted net income (a) (d)

 

146,332

 

 

133,504

 

9.6

%

 

 

259,740

 

 

249,150

 

4.3

%

Adjusted EPS (a) (d)

 

1.09

 

 

0.99

 

10.1

%

 

 

1.94

 

 

1.84

 

5.4

%

Basic weighted-average shares outstanding

 

132,431

 

 

133,317

 

 

 

 

132,414

 

 

133,314

 

 

Diluted weighted-average shares outstanding

 

133,849

 

 

135,129

 

 

 

 

133,980

 

 

135,515

 

 

(a) See “Note Regarding Non-GAAP Financial Information.” (b) Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition, and include adjustments for restructuring charges to conform to the current period presentation. (c) EPS represents net income per diluted share. (d) Adjusted net income for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation.

Additional Highlights:

• Total comparable club sales increased by 3.1% and 2.4% in the second quarter and first six months of fiscal 2024, respectively, compared to the same periods in fiscal 2023. Excluding the impact of gasoline sales, comparable club sales increased by 2.4% and 1.5% in the second quarter and first six months of fiscal 2024, respectively, compared to the same periods in fiscal 2023.

• Gross profit increased to $956.6 million in the second quarter of fiscal 2024 from $896.8 million in the second quarter of fiscal 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 10 basis points over the same quarter of fiscal 2023, primarily driven by improved inventory cost management. Gross profit increased to $1,840.0 million in the first six months of fiscal 2024 from $1,776.8 million in the first six months of fiscal 2023. Merchandise gross margin rate decreased by 20 basis points in the first six months of fiscal 2024, primarily driven by lower ancillary income.

• Selling, general and administrative expenses ("SG&A") increased to $750.3 million in the second quarter of fiscal 2024 compared to $695.0 million in the second quarter of fiscal 2023. SG&A increased to $1,472.1 million in the first six months of fiscal 2024 compared to $1,384.3 million in the first six months of fiscal 2023. 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, such as the restructuring of certain corporate functions.

• Income from continuing operations before income taxes increased to $190.9 million in the second quarter of fiscal 2024 compared to $184.0 million in the second quarter of fiscal 2023. Income from continuing operations before income taxes decreased to $337.7 million in the first six months of fiscal 2024 compared to $356.1 million in the first six months of fiscal 2023.

• Income tax expense decreased to $45.9 million in the second quarter of fiscal 2024 compared to $52.7 million in the second quarter of fiscal 2023. Income tax expense decreased to $81.7 million in the first six months of fiscal 2024 compared to $108.8 million in the first six months of fiscal 2023. The decrease in income tax expense for both comparative periods is primarily driven by higher tax benefits from stock-based compensation.

• Net income increased to $145.0 million in the second quarter of fiscal 2024 compared to $131.3 million in the second quarter of fiscal 2023. Net income increased to $256.0 million in the first six months of fiscal 2024 compared to $247.4 million in the first six months of fiscal 2023.

• Adjusted EBITDA increased by 4.9% to $281.3 million in the second quarter of fiscal 2024 compared to $268.1 million in the second quarter of fiscal 2023. Adjusted EBITDA decreased by 0.4% to $517.7 million in the first six months of fiscal 2024 compared to $519.6 million in the first six months of fiscal 2023.

• Under its existing share repurchase program, the Company repurchased 451,982 shares of common stock, totaling $40.4 million, inclusive of associated costs, in the second quarter of fiscal 2024. In the first six months of fiscal 2024, the Company repurchased 857,092 shares of common stock, totaling $70.6 million, inclusive of associated costs, under such program, and $118.7 million remained available to purchase. 

Fiscal 2024 Ending February 1, 2025 Outlook

“As we look ahead, we remain confident in our ability to drive long-term growth and shareholder value led by our continued focus on executing our strategic priorities and delivering significant value to our members,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ's Wholesale Club. “With respect to our outlook, we continue to expect fiscal 2024 comparable club sales, excluding the impact of gasoline sales, to increase 1% to 2% year-over-year, with traffic and unit growth as well as a strong perishables business likely driving us to the higher end of the range. Our business model and long-term strategies have allowed us to invest in our value proposition to help our members stretch their dollar. As we do what’s right for our members, we expect our fiscal 2024 merchandise gross margins to remain approximately flat year-over-year. Finally, we continue to expect our fiscal 2024 adjusted EPS to range from $3.75 to $4.00, with our investments for the long term potentially driving us toward the low end of the range.”

Conference Call Details

A conference call to discuss the second quarter of fiscal 2024 financial results is scheduled for today, August 22, 2024, at 8:30 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 +1 (929) 526-1599 outside the U.S. and reference conference ID 760119.

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 wide assortment of fresh foods, produce, a full-service deli, fresh bakery, household essentials and gas. In addition, BJ’s offers the latest technology, home decor, apparel, seasonal items and more to deliver unbeatable value to smart-saving families. Headquartered in Marlborough, Massachusetts, the Company pioneered the warehouse club model in New England in 1984 and currently operates 244 clubs and 178 BJ's Gas® locations in 20 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 future results of operations and financial position; our anticipated fiscal 2024 outlook; and our strategic priorities and future progress, as well as statements that include the words “expect,” “intend,” “plan,” “confident,” “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 or as a result of wars and global political conflicts, consumer and small business spending patterns and debt levels; our dependence on having a large and loyal membership; domestic and international economic conditions, including volatility in inflation or interest rates, supply chain disruptions, construction delays 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 18, 2024, 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 August 3, 2024

 

Thirteen Weeks

Ended July 29, 2023

 

Twenty-six Weeks

Ended August 3, 2024

 

Twenty-six Weeks

Ended July 29, 2023

Net sales

$

5,092,279

 

$

4,859,842

 

$

9,899,408

 

$

9,480,462

Membership fee income

 

113,116

 

 

103,698

 

 

224,506

 

 

206,220

Total revenues

 

5,205,395

 

 

4,963,540

 

 

10,123,914

 

 

9,686,682

Cost of sales

 

4,248,819

 

 

4,066,727

 

 

8,283,948

 

 

7,909,877

Selling, general and administrative expenses

 

750,323

 

 

694,960

 

 

1,472,094

 

 

1,384,288

Pre-opening expenses

 

2,578

 

 

1,584

 

 

3,442

 

 

5,478

Operating income

 

203,675

 

 

200,269

 

 

364,430

 

 

387,039

Interest expense, net

 

12,755

 

 

16,274

 

 

26,706

 

 

30,964

Income from continuing operations before income taxes

 

190,920

 

 

183,995

 

 

337,724

 

 

356,075

Provision for income taxes

 

45,932

 

 

52,670

 

 

81,717

 

 

108,762

Income from continuing operations

 

144,988

 

 

131,325

 

 

256,007

 

 

247,313

Income from discontinued operations, net of income taxes

 

—

 

 

—

 

 

—

 

 

89

Net income

$

144,988

 

$

131,325

 

$

256,007

 

$

247,402

Income per share attributable to common stockholders—basic:

 

 

 

 

 

 

 

Income from continuing operations

$

1.09

 

$

0.99

 

$

1.93

 

$

1.86

Income from discontinued operations

 

—

 

 

—

 

 

—

 

 

—

Net income

$

1.09

 

$

0.99

 

$

1.93

 

$

1.86

Income per share attributable to common stockholders—diluted:

 

 

 

 

 

 

 

Income from continuing operations

$

1.08

 

$

0.97

 

$

1.91

 

$

1.82

Income from discontinued operations

 

—

 

 

—

 

 

—

 

 

0.01

Net income

$

1.08

 

$

0.97

 

$

1.91

 

$

1.83

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

Basic

 

132,431

 

 

133,317

 

 

132,414

 

 

133,314

Diluted

 

133,849

 

 

135,129

 

 

133,980

 

 

135,515

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

August 3, 2024

 

July 29, 2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

38,058

 

$

26,210

Accounts receivable, net

 

248,491

 

 

200,279

Merchandise inventories

 

1,546,211

 

 

1,540,508

Prepaid expense and other current assets

 

82,333

 

 

76,309

Total current assets

 

1,915,093

 

 

1,843,306

 

 

 

 

Operating lease right-of-use assets, net

 

2,150,965

 

 

2,165,125

Property and equipment, net

 

1,697,139

 

 

1,428,576

Goodwill

 

1,008,816

 

 

1,008,816

Intangibles, net

 

104,370

 

 

111,568

Deferred income taxes

 

3,548

 

 

7,928

Other assets

 

49,971

 

 

38,577

Total assets

$

6,929,902

 

$

6,603,896

 

 

 

 

LIABILITIES

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

217,000

 

$

411,000

Current portion of operating lease liabilities

 

162,777

 

 

179,423

Accounts payable

 

1,285,733

 

 

1,226,490

Accrued expenses and other current liabilities

 

858,240

 

 

774,235

Total current liabilities

 

2,523,750

 

 

2,591,148

 

 

 

 

Long-term operating lease liabilities

 

2,058,071

 

 

2,075,058

Long-term debt

 

398,586

 

 

448,135

Deferred income taxes

 

70,976

 

 

64,095

Other non-current liabilities

 

223,612

 

 

194,171

 

 

 

 

STOCKHOLDERS' EQUITY

 

1,654,907

 

 

1,231,289

Total liabilities and stockholders' equity

$

6,929,902

 

$

6,603,896

 

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

Twenty-six Weeks Ended August 3, 2024

 

Twenty-six Weeks Ended July 29, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income

$

256,007

 

 

$

247,402

 

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

 

 

 

Depreciation and amortization

 

128,559

 

 

 

109,015

 

Amortization of debt issuance costs and accretion of original issue discount

 

554

 

 

 

655

 

Stock-based compensation expense

 

18,926

 

 

 

19,631

 

Deferred income tax provision

 

(3,274

)

 

 

10,641

 

Changes in operating leases and other non-cash items

 

6,479

 

 

 

762

 

Increase (decrease) in cash due to changes in:

 

 

 

Accounts receivable, net

 

(20,006

)

 

 

39,797

 

Merchandise inventories

 

(91,389

)

 

 

(161,957

)

Accounts payable

 

102,452

 

 

 

30,793

 

Accrued expenses and other current liabilities

 

34,312

 

 

 

(3,606

)

Other operating assets and liabilities, net

 

(10,422

)

 

 

(23,633

)

Net cash provided by operating activities

 

422,198

 

 

 

269,500

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

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

 

(239,620

)

 

 

(208,252

)

Net cash used in investing activities

 

(239,620

)

 

 

(208,252

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Proceeds from revolving lines of credit

 

366,000

 

 

 

312,000

 

Payments on revolving lines of credit

 

(468,000

)

 

 

(306,000

)

Net cash received from stock option exercises

 

15,463

 

 

 

1,571

 

Net cash received from Employee Stock Purchase Program

 

3,411

 

 

 

3,255

 

Acquisition of treasury stock

 

(99,965

)

 

 

(87,271

)

Proceeds from financing obligations

 

6,008

 

 

 

9,058

 

Other financing activities

 

(3,486

)

 

 

(1,566

)

Net cash used in financing activities

 

(180,569

)

 

 

(68,953

)

Net increase (decrease) in cash and cash equivalents

 

2,009

 

 

 

(7,705

)

Cash and cash equivalents at beginning of period

 

36,049

 

 

 

33,915

 

Cash and cash equivalents at end of period

$

38,058

 

 

$

26,210

 

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 EPS”), adjusted EBITDA, adjusted free cash flow, net debt, net debt to last twelve months (“LTM”) adjusted EBITDA, and comparable club sales.

We define adjusted net income as net income as reported, adjusted for non-recurring, infrequent, or unusual changes, including restructuring charges, and other adjustments that the Company believes appropriate, net of the tax impact of such adjustments. Prior period adjusted net income presentations have been or will be recast to include the impact of restructuring charges.

We define adjusted EPS 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; restructuring and other adjustments. Prior period adjusted EBITDA presentations have been or will be recast to exclude pre-opening expenses and non-cash rent expense, and include the impact of restructuring charges.

We define adjusted 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 EPS 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.

We believe that adjusted net income, adjusted EPS 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 EPS 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 annual incentive compensation.

We present adjusted 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. Adjusted 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 EPS, 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 EPS, adjusted EBITDA, adjusted 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 EPS, 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 EPS, adjusted EBITDA, adjusted 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 EPS, adjusted EBITDA, adjusted 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.

We believe comparable club sales is an important driver of our profitability. Comparable club sales, a key performance indicator, also known as same-store sales in the retail industry, includes all clubs that were open for at least 13 months at the beginning of the period and were in operation during the entirety of both periods being compared, including relocated clubs and expansions. Comparable club sales allow us to evaluate how our club base is performing by measuring the change in period-over-period net sales in clubs that have been open for the applicable period.

Various factors affect comparable club sales, including customer preferences and trends, product sourcing, promotional offerings and pricing, shopping frequency from new and existing members and the amount they spend on each visit, weather and holiday shopping period timing and length. Sales comparisons can be influenced by certain factors that are beyond our control such as changes in the cost of gasoline and macro-economic factors such as inflation. The higher comparable club sales, the more we can leverage certain of our selling, general and administrative expenses, reducing them as a percentage of sales and enhancing profitability.

In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, the Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including of its projected range for adjusted EPS for Fiscal 2024 to net income per diluted share, which is the most directly comparable GAAP measure, under "Fiscal 2024 Ending February 1, 2025" above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items or there are no meaningful adjustments to be presented in the reconciliation and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income per diluted share, if any. This includes items that have not yet occurred, are out of the Company's control, cannot be reasonably predicted and/or for which there would not be any meaningful adjustment or difference. For the same reasons, the Company is unable to address the probable significance of the unavailable information. The information under "Fiscal 2024 Ending February 1, 2025" above, including expectations about adjusted EPS reflects management’s view of current and future market conditions. To the extent actual results differ from our current expectations, the Company’s results may differ materially from the expectations set forth above. Other factors, as referenced elsewhere in this press release, may also cause the Company’s results to differ materially from the expectations set forth above.

Reconciliation of GAAP to Non-GAAP Financial Information

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation of net income to adjusted net income and adjusted EPS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

Thirteen Weeks

Ended August 3, 2024

 

Thirteen Weeks

Ended July 29, 2023

 

Twenty-six Weeks

Ended August 3, 2024

 

Twenty-six Weeks

Ended July 29, 2023

Net income as reported

$

144,988

 

 

$

131,325

 

 

$

256,007

 

 

$

247,402

 

Adjustments:

 

 

 

 

 

 

 

Restructuring (a)

 

1,878

 

 

 

3,214

 

 

 

5,185

 

 

 

3,214

 

Other adjustments (b)

 

—

 

 

 

(185

)

 

 

—

 

 

 

(786

)

Tax impact of adjustments to net income (c)

 

(534

)

 

 

(850

)

 

 

(1,452

)

 

 

(680

)

Adjusted net income (d)

$

146,332

 

 

$

133,504

 

 

$

259,740

 

 

$

249,150

 

 

 

 

 

 

 

 

 

Weighted-average diluted shares outstanding

 

133,849

 

 

 

135,129

 

 

 

133,980

 

 

 

135,515

 

Adjusted EPS (d) (e)

$

1.09

 

 

$

0.99

 

 

$

1.94

 

 

$

1.84

 

(a) Represents charges related to the restructuring of certain corporate functions including costs for severance, retention, outplacement, consulting fees, and other third-party fees. (b) 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. (c) Represents the tax effect of the above adjustments at a statutory tax rate of approximately 28%. (d) Adjusted net income for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation. (e) Adjusted EPS is measured using weighted-average diluted shares outstanding.

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation to Adjusted EBITDA

(Amounts in thousands)

(Unaudited)

 

 

Thirteen Weeks

Ended August 3, 2024

 

Thirteen Weeks

Ended July 29, 2023

 

Twenty-six Weeks

Ended August 3, 2024

 

Twenty-six Weeks

Ended July 29, 2023

Income from continuing operations

$

144,988

 

$

131,325

 

$

256,007

 

$

247,313

Interest expense, net

 

12,755

 

 

16,274

 

 

26,706

 

 

30,964

Provision for income taxes

 

45,932

 

 

52,670

 

 

81,717

 

 

108,762

Depreciation and amortization

 

65,137

 

 

54,825

 

 

128,559

 

 

109,015

Stock-based compensation expense

 

10,336

 

 

9,624

 

 

18,926

 

 

19,631

Restructuring (a)

 

1,878

 

 

3,214

 

 

5,185

 

 

3,214

Other adjustments (b)

 

323

 

 

177

 

 

635

 

 

748

Adjusted EBITDA (c)

$

281,349

 

$

268,109

 

$

517,735

 

$

519,647

(a) Represents charges related to the restructuring of certain corporate functions including costs for severance, retention, outplacement, consulting fees, and other third-party fees. Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges to conform to the current period presentation. (b) Other non-cash items, including non-cash accretion on asset retirement obligations and obligations associated with our post-retirement medical plan. (c) Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition.

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation to Adjusted Free Cash Flow

(Amounts in thousands)

(Unaudited)

 

 

Thirteen Weeks

Ended August 3, 2024

 

Thirteen Weeks

Ended July 29, 2023

 

Twenty-six Weeks

Ended August 3, 2024

 

Twenty-six Weeks

Ended July 29, 2023

Net cash provided by operating activities

$

221,351

 

 

$

150,368

 

 

$

422,198

 

 

$

269,500

 

Less: Additions to property and equipment, net of disposals

 

(133,879

)

 

 

(122,156

)

 

 

(239,620

)

 

 

(214,240

)

Plus: Proceeds from sale-leaseback transactions

 

—

 

 

 

5,988

 

 

 

—

 

 

 

5,988

 

Adjusted free cash flow

$

87,472

 

 

$

34,200

 

 

$

182,578

 

 

$

61,248

 

 

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation of Net Debt and Net Debt to LTM adjusted EBITDA

(Amounts in thousands)

(Unaudited)

 

August 3, 2024

Total debt

$

615,586

Less: Cash and cash equivalents

 

38,058

Net debt

$

577,528

 

 

Income from continuing operations

$

532,346

Interest expense, net

 

60,269

Provision for income taxes

 

185,195

Depreciation and amortization

 

247,240

Stock-based compensation expense

 

38,316

Restructuring

 

15,911

Other adjustments

 

940

Adjusted EBITDA

$

1,080,217

 

 

Net debt to LTM adjusted EBITDA

0.5x

 

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/20240822706058/en/

Investor Contact: Catherine Park Vice President, Investor Relations cpark@bjs.com 774-512-6744 Media Contact: Kirk Saville Head of Corporate Communications ksaville@bjs.com 774-512-5597