First quarter marked by robust membership,
traffic, and unit volumes
First Quarter Fiscal 2024 Highlights
- Comparable club sales increased by 1.6% year-over-year
- Comparable club sales, excluding gasoline sales, increased by
0.6% year-over-year led by strong traffic and unit growth
- Digitally enabled comparable sales growth was 21.0%
year-over-year
- Membership fee income increased by 8.6% year-over-year to
$111.4 million
- Merchandise gross margin rate decreased by 50 basis points
year-over-year
- Earnings per diluted share of $0.83 and adjusted earnings per
diluted share of $0.85
- 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 ended
May 4, 2024.
“During the first quarter, we delivered strong increases in
membership, traffic and unit volumes. This resulted in revenue
growth and market share gains in our clubs and at our gas stations.
Our merchandising improvements and digital conveniences, grounded
in delivering compelling value, are resonating with our members. We
are also growing our footprint and remain on track for 12 new club
openings this year,” 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 remain confident in the long-term
growth prospects of our Company.”
Key Measures for the Thirteen Weeks Ended May 4, 2024 (First
Quarter of Fiscal 2024):
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
(Amounts in thousands, except per share
amounts)
13 Weeks Ended May 4,
2024
13 Weeks Ended April 29,
2023
%
Growth (Decline)
Net sales
$
4,807,129
$
4,620,620
4.0
%
Membership fee income
111,390
102,522
8.6
%
Total revenues
4,918,519
4,723,142
4.1
%
Operating income
160,755
186,770
(13.9
)%
Income from continuing operations
111,019
115,988
(4.3
)%
Adjusted EBITDA (a) (b)
236,386
251,538
(6.0
)%
Net income
111,019
116,077
(4.4
)%
EPS (c)
0.83
0.85
(2.4
)%
Adjusted net income (a)
113,408
115,646
(1.9
)%
Adjusted EPS (a)
0.85
0.85
—
%
Basic weighted-average shares
outstanding
132,397
133,312
Diluted weighted-average shares
outstanding
134,111
135,902
(a)
See “Note Regarding Non-GAAP Financial Information.”
(b)
Adjusted EBITDA for the 13 weeks ended April 29, 2023 has been
recast to exclude adjustments for pre-opening expenses and non-cash
rent expense to conform to the current period definition.
(c)
EPS represents net income per diluted share.
Additional Highlights:
- Total comparable club sales increased by 1.6% in the first
quarter of fiscal 2024 compared to the first quarter of fiscal
2023. Excluding the impact of gasoline sales, comparable club sales
increased by 0.6% in the first quarter of fiscal 2024 compared to
the same period in fiscal 2023.
- Gross profit increased to $883.4 million in the first quarter
of fiscal 2024 from $880.0 million in the first quarter of fiscal
2023 driven by growth in membership fee income. Merchandise gross
margin rate, which excludes gasoline sales and membership fee
income, decreased by 50 basis points over the same quarter of
fiscal 2023, primarily driven by lower ancillary income.
- Selling, general and administrative expenses ("SG&A")
increased to $721.8 million in the first quarter of fiscal 2024
compared to $689.3 million in the first quarter of fiscal 2023. The
increase 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 $146.8 million in the first quarter of fiscal 2024 compared to
$172.1 million in the first quarter of fiscal 2023.
- Income tax expense decreased to $35.8 million in the first
quarter of fiscal 2024 compared to $56.1 million in the first
quarter of fiscal 2023. The decrease in income tax expense is
primarily driven by higher tax benefits from stock-based
compensation.
- Net income decreased to $111.0 million in the first quarter of
fiscal 2024 compared to $116.1 million in the first quarter of
fiscal 2023.
- Adjusted EBITDA decreased to $236.4 million in the first
quarter of fiscal 2024 compared to $251.5 million in the first
quarter of fiscal 2023.
- Under its existing share repurchase program, the Company
repurchased 405,110 shares of common stock, totaling $30.2 million,
inclusive of associated costs, in the first quarter of fiscal
2024.
Fiscal 2024 Ending February 1, 2025 Outlook
“As we look ahead to the rest of the year, we remain confident
in our ability to maintain our strength in traffic, unit volumes
and market share led by our continued focus on delivering value to
our members and executing on our strategic priorities,” said Laura
Felice, Executive Vice President, Chief Financial Officer, BJ's
Wholesale Club. “Our outlook remains unchanged for fiscal
2024.”
Conference Call Details
A conference call to discuss the first quarter of fiscal 2024
financial results is scheduled for today, May 23, 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 968183.
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 176 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 strategic priorities; our anticipated
fiscal 2024 outlook; and our 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 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
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
May 4, 2024
Thirteen Weeks Ended
April 29, 2023
Net sales
$
4,807,129
$
4,620,620
Membership fee income
111,390
102,522
Total revenues
4,918,519
4,723,142
Cost of sales
4,035,129
3,843,150
Selling, general and administrative
expenses
721,771
689,328
Pre-opening expenses
864
3,894
Operating income
160,755
186,770
Interest expense, net
13,951
14,690
Income from continuing operations before
income taxes
146,804
172,080
Provision for income taxes
35,785
56,092
Income from continuing operations
111,019
115,988
Income from discontinued operations, net
of income taxes
—
89
Net income
$
111,019
$
116,077
Income per share attributable to common
stockholders - basic:
Income from continuing operations
$
0.84
$
0.87
Income from discontinued operations
—
—
Net income
$
0.84
$
0.87
Income per share attributable to common
stockholders - diluted:
Income from continuing operations
$
0.83
$
0.85
Income from discontinued operations
—
—
Net income
$
0.83
$
0.85
Weighted-average number of shares
outstanding:
Basic
132,397
133,312
Diluted
134,111
135,902
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands, except per share
amounts)
(Unaudited)
May 4, 2024
April 29, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
35,094
$
23,387
Accounts receivable, net
225,199
217,866
Merchandise inventories
1,533,310
1,532,006
Prepaid expense and other current
assets
85,048
69,048
Total current assets
1,878,651
1,842,307
Operating lease right-of-use assets,
net
2,159,955
2,124,621
Property and equipment, net
1,620,255
1,364,815
Goodwill
1,008,816
1,008,816
Intangibles, net
106,001
113,536
Deferred income taxes
2,693
6,728
Other assets
48,356
33,672
Total assets
$
6,824,727
$
6,494,495
LIABILITIES
Current liabilities:
Short-term debt
$
270,000
$
400,000
Current portion of operating lease
liabilities
156,914
178,939
Accounts payable
1,264,873
1,281,676
Accrued expenses and other current
liabilities
834,053
758,724
Total current liabilities
2,525,840
2,619,339
Long-term operating lease liabilities
2,069,587
2,037,844
Long-term debt
398,509
448,004
Deferred income taxes
74,804
66,699
Other non-current liabilities
228,567
190,883
STOCKHOLDERS' EQUITY
1,527,420
1,131,726
Total liabilities and stockholders'
equity
$
6,824,727
$
6,494,495
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands, except per share
amounts)
(Unaudited)
Thirteen Weeks Ended May 4,
2024
Thirteen Weeks Ended April 29,
2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
111,019
$
116,077
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
63,422
54,190
Amortization of debt issuance costs and
accretion of original issue discount
277
324
Stock-based compensation expense
8,590
10,007
Deferred income tax provision
1,409
14,445
Changes in operating leases and other
non-cash items
2,922
(750
)
Increase (decrease) in cash due to changes
in:
Accounts receivable, net
3,491
21,871
Merchandise inventories
(78,488
)
(153,455
)
Accounts payable
81,592
85,979
Accrued expenses and other current
liabilities
19,316
(4,977
)
Other operating assets and liabilities,
net
(12,703
)
(24,579
)
Net cash provided by operating
activities
200,847
119,132
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property and equipment, net
of disposals
(105,741
)
(92,084
)
Net cash used in investing activities
(105,741
)
(92,084
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from revolving lines of
credit
193,000
149,000
Payments on revolving lines of credit
(242,000
)
(154,000
)
Net cash received from stock option
exercises
5,865
1,675
Acquisition of treasury stock
(57,256
)
(42,369
)
Proceeds from financing obligations
6,044
9,104
Other financing activities
(1,714
)
(986
)
Net cash used in financing activities
(96,061
)
(37,576
)
Net decrease in cash and cash
equivalents
(955
)
(10,528
)
Cash and cash equivalents at beginning of
period
36,049
33,915
Cash and cash equivalents at end of
period
$
35,094
$
23,387
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 and net debt to last
twelve months (“LTM”) adjusted EBITDA.
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.
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)
13 Weeks Ended May 4,
2024
13 Weeks Ended April
29, 2023
Net income as reported
$
111,019
$
116,077
Adjustments:
Restructuring (a)
3,307
—
Other adjustments (b)
—
(601
)
Tax impact of adjustments to net income
(c)
(918
)
170
Adjusted net income
$
113,408
$
115,646
Weighted-average diluted shares
outstanding
134,111
135,902
Adjusted EPS (d)
$
0.85
$
0.85
(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 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 May 4,
2024
13 Weeks Ended April
29, 2023
Income from continuing
operations
$
111,019
$
115,988
Interest expense, net
13,951
14,690
Provision for income taxes
35,785
56,092
Depreciation and amortization
63,422
54,190
Stock-based compensation expense
8,590
10,007
Restructuring (a)
3,307
—
Other adjustments (b)
312
571
Adjusted EBITDA (c)
$
236,386
$
251,538
(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, including non-cash accretion on asset
retirement obligations and obligations associated with our
post-retirement medical plan.
(c)
Adjusted EBITDA for the 13-weeks ended April 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)
13 Weeks Ended May 4,
2024
13 Weeks Ended April
29, 2023
Net cash provided by operating
activities
$
200,847
$
119,132
Less: Additions to property and equipment,
net of disposals
(105,741
)
(92,084
)
Plus: Proceeds from sale-leaseback
transactions
—
—
Adjusted free cash flow
$
95,106
$
27,048
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
Reconciliation of Net Debt and Net Debt
to LTM adjusted EBITDA
(Amounts in thousands)
(Unaudited)
May 4, 2024
Total debt
$
668,509
Less: Cash and cash equivalents
35,094
Net debt
$
633,415
Income from continuing operations
$
518,683
Interest expense, net
63,788
Provision for income taxes
191,933
Depreciation and amortization
236,928
Stock-based compensation expense
37,604
Restructuring
17,247
Other adjustments
794
Adjusted EBITDA
$
1,066,977
Net debt to LTM adjusted EBITDA
0.6x
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/20240523112413/en/
Investor: 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
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