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BJ’s Wholesale Club Holdings, Inc. Announces Third Quarter Fiscal 2023 Results

Strong third quarter earnings led by membership growth, traffic and margin improvement  

Third Quarter Fiscal 2023 Highlights

  • Comparable club sales, excluding gasoline sales, remained approximately flat year-over-year
  • Digitally enabled comparable sales growth was 16.0% year-over-year
  • Membership fee income increased by 6.6% year-over-year to $106.1 million
  • Merchandise gross margin rate increased by 30 basis points year-over-year
  • Earnings per diluted share of $0.97 and adjusted earnings per diluted share of $0.98
  • Income from continuing operations of $130.5 million
  • Adjusted EBITDA of $274.9 million

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company") today announced its financial results for the thirteen weeks and thirty-nine weeks ended October 28, 2023.

“Our advantaged model and strong value proposition continue to resonate with our members. During the third quarter, we posted accelerating membership growth, robust traffic gains and continued increases in market share. These gains continue to reinforce the underlying strength of our business and we remain confident in the long-term growth prospects of our Company,” 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 members during these dynamic times.”

Key Measures for the Thirteen Weeks Ended October 28, 2023 (Third Quarter of Fiscal 2023) and for the Thirty-Nine Weeks Ended October 28, 2023, (First Nine Months of Fiscal 2023):

BJ'S WHOLESALE CLUB HOLDINGS, INC.

(Amounts in thousands, except per share amounts)

 

13 Weeks Ended October 28, 2023

 

13 Weeks Ended October 29, 2022

 

%

Growth (Decline)

 

39 Weeks Ended October 28, 2023

 

39 Weeks Ended October 29, 2022

 

%

Growth (Decline)

Net sales

$

4,818,670

 

$

4,685,834

 

2.8

%

 

$

14,299,132

 

$

14,090,673

 

1.5

%

Membership fee income

 

106,053

 

 

99,485

 

6.6

%

 

 

312,273

 

 

294,897

 

5.9

%

Total revenues

 

4,924,723

 

 

4,785,319

 

2.9

%

 

 

14,611,405

 

 

14,385,570

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

199,375

 

 

191,968

 

3.9

%

 

 

586,414

 

 

545,193

 

7.6

%

Income from continuing operations

 

130,467

 

 

131,394

 

(0.7

)%

 

 

377,780

 

 

384,862

 

(1.8

)%

Adjusted EBITDA (a)

 

274,920

 

 

272,305

 

1.0

%

 

 

800,663

 

 

766,804

 

4.4

%

Net income

 

130,467

 

 

129,942

 

0.4

%

 

 

377,869

 

 

383,396

 

(1.4

)%

EPS (b)

 

0.97

 

 

0.95

 

2.1

%

 

 

2.79

 

 

2.81

 

(0.7

)%

Adjusted net income (a)

 

131,779

 

 

135,830

 

(3.0

)%

 

 

378,617

 

 

398,550

 

(5.0

)%

Adjusted EPS (a)

 

0.98

 

 

0.99

 

(1.0

)%

 

 

2.80

 

 

2.92

 

(4.1

)%

Basic weighted-average shares outstanding

 

133,069

 

 

134,091

 

 

 

 

133,232

 

 

134,225

 

 

Diluted weighted-average shares outstanding

 

134,984

 

 

136,621

 

 

 

 

135,338

 

 

136,630

 

 

 

(a) See “Note Regarding Non-GAAP Financial Information.”

(b) EPS represents net income per diluted share. 

Additional Highlights:

  • Total comparable club sales increased by 0.3% in the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales remained approximately flat, with a decrease of 0.1% in the third quarter of fiscal 2023 compared to the same period in fiscal 2022. Total comparable club sales decreased by 1.2% in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales increased by 2.1% in the first nine months of fiscal 2023 compared to the first nine months of fiscal 2022.
  • Gross profit increased to $902.5 million in the third quarter of fiscal 2023 from $877.1 million in the third quarter of fiscal 2022. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased by 30 basis points over the same quarter of fiscal 2022. Gross profit increased to $2,679.3 million in the first nine months of fiscal 2023 from $2,528.3 million in the first nine months of fiscal 2022. Merchandise gross margin rate increased by 70 basis points in the first nine months of fiscal 2023. Merchandise margins were positively impacted by moderated supply chain costs and improved inventory management for both comparative periods.
  • Selling, general and administrative expenses ("SG&A") increased to $697.1 million in the third quarter of fiscal 2023 compared to $674.4 million in the third quarter of fiscal 2022. SG&A increased to $2,081.4 million in the first nine months of fiscal 2023 compared to $1,961.6 million in the first nine months 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 increased to $181.4 million in the third quarter of fiscal 2023 compared to $179.5 million in the third quarter of fiscal 2022. Income from continuing operations before income taxes increased to $537.4 million in the first nine months of fiscal 2023 compared to $514.0 million in the first nine months of fiscal 2022.
  • Income tax expense increased to $50.9 million in the third quarter of fiscal 2023 compared to $48.1 million in the third quarter of fiscal 2022. Income tax expense increased to $159.7 million in the first nine months of fiscal 2023 compared to $129.2 million in the first nine months of fiscal 2022. The increases in the income tax expense for both comparative periods are driven by lower tax benefits from stock-based compensation. Income tax expense for the first nine months of fiscal 2023 also increased due to an immaterial adjustment to certain deferred tax assets related to prior periods.
  • Net income increased to $130.5 million in the third quarter of fiscal 2023 compared to $129.9 million in the third quarter of fiscal 2022. Net income decreased to $377.9 million in the first nine months of fiscal 2023 compared to $383.4 million in the first nine months of fiscal 2022.
  • Adjusted EBITDA increased by 1.0% to $274.9 million in the third quarter of fiscal 2023 compared to $272.3 million in the third quarter of fiscal 2022. Adjusted EBITDA increased by 4.4% to $800.7 million in the first nine months of fiscal 2023 compared to $766.8 million in the first nine months of fiscal 2022.
  • The Company repaid $50.0 million of principal and amended its senior secured first lien term loan in the third quarter of fiscal 2023, extending the maturity date from February 3, 2027 to February 3, 2029. The interest rate was reduced from the Secured Overnight Financing Rate (“SOFR”) plus 275 basis points per annum to SOFR plus 200 basis points per annum.
  • Under its existing share repurchase program, the Company repurchased 242,000 shares of common stock, totaling $17.1 million, inclusive of associated costs, in the third quarter of fiscal 2023. In the first nine months of fiscal 2023, the Company repurchased 1,161,162 shares of common stock, totaling $77.0 million, inclusive of associated costs, under such program.

Fiscal 2023 Ending February 3, 2024 Outlook

“As we look ahead to the rest of the year, we remain confident in our ability to maintain the momentum in our traffic and market share gains due to our unrelenting focus on value. We also continue to navigate shifts in consumer behavior driven by the broader macroeconomic environment. As a result, we are refining our sales outlook for the rest of the year,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ's Wholesale Club. “We expect our comparable club sales, excluding the impact of gasoline sales, to range from a 2% decrease to 1% increase year-over-year in the fourth quarter fiscal 2023, and to increase by 1.0% to 1.8% year-over-year for the full year fiscal 2023. Our outlook on fiscal 2023 GAAP and adjusted EPS remains unchanged in the $3.80 to $3.92 range.”

Conference Call Details

A conference call to discuss the third quarter of fiscal 2023 financial results is scheduled for today, November 17, 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 (646) 904-5544 outside the U.S. and reference conference ID 604879. 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 413792.

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 239 clubs and 169 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 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 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 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 October 28, 2023

 

Thirteen Weeks

Ended October 29, 2022

 

Thirty-Nine Weeks

Ended October 28, 2023

 

Thirty-Nine Weeks

Ended October 29, 2022

Net sales

$

4,818,670

 

$

4,685,834

 

 

$

14,299,132

 

$

14,090,673

 

Membership fee income

 

106,053

 

 

99,485

 

 

 

312,273

 

 

294,897

 

Total revenues

 

4,924,723

 

 

4,785,319

 

 

 

14,611,405

 

 

14,385,570

 

Cost of sales

 

4,022,243

 

 

3,908,219

 

 

 

11,932,120

 

 

11,857,263

 

Selling, general and administrative expenses

 

697,104

 

 

674,426

 

 

 

2,081,392

 

 

1,961,606

 

Pre-opening expense

 

6,001

 

 

10,706

 

 

 

11,479

 

 

21,508

 

Operating income

 

199,375

 

 

191,968

 

 

 

586,414

 

 

545,193

 

Interest expense, net

 

18,004

 

 

12,450

 

 

 

48,968

 

 

31,166

 

Income from continuing operations before income taxes

 

181,371

 

 

179,518

 

 

 

537,446

 

 

514,027

 

Provision for income taxes

 

50,904

 

 

48,124

 

 

 

159,666

 

 

129,165

 

Income from continuing operations

 

130,467

 

 

131,394

 

 

 

377,780

 

 

384,862

 

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

 

 

 

(1,452

)

 

 

89

 

 

(1,466

)

Net income

$

130,467

 

$

129,942

 

 

$

377,869

 

$

383,396

 

Income per share attributable to common stockholders - basic:

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.98

 

$

0.98

 

 

$

2.84

 

$

2.87

 

Income (loss) from discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.01

)

Net income

$

0.98

 

$

0.97

 

 

$

2.84

 

$

2.86

 

Income per share attributable to common stockholders - diluted:

 

 

 

 

 

 

 

 

 

Income from continuing operations

$

0.97

 

$

0.96

 

 

$

2.79

 

$

2.82

 

Income (loss) from discontinued operations

 

 

 

(0.01

)

 

 

 

 

(0.01

)

Net income

$

0.97

 

$

0.95

 

 

$

2.79

 

$

2.81

 

Weighted-average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

133,069

 

 

134,091

 

 

 

133,232

 

 

134,225

 

Diluted

 

134,984

 

 

136,621

 

 

 

135,338

 

 

136,630

 

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

October 28, 2023

 

October 29, 2022

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

33,551

 

$

34,644

Accounts receivable, net

 

224,505

 

 

251,978

Merchandise inventories

 

1,661,852

 

 

1,504,368

Prepaid expense and other current assets

 

80,550

 

 

72,285

Total current assets

 

2,000,458

 

 

1,863,275

 

 

 

 

Operating lease right-of-use assets, net

 

2,174,706

 

 

2,163,504

Property and equipment, net

 

1,495,912

 

 

1,296,151

Goodwill

 

1,008,816

 

 

1,008,816

Intangibles, net

 

109,600

 

 

117,814

Deferred taxes

 

7,429

 

 

4,341

Other assets

 

40,323

 

 

25,002

Total assets

$

6,837,244

 

$

6,478,903

 

 

 

 

LIABILITIES

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

434,000

 

$

295,000

Current portion of operating lease liabilities

 

180,490

 

 

176,659

Accounts payable

 

1,318,959

 

 

1,363,734

Accrued expenses and other current liabilities

 

805,607

 

 

764,572

Total current liabilities

 

2,739,056

 

 

2,599,965

 

 

 

 

Long-term operating lease liabilities

 

2,084,744

 

 

2,085,625

Long-term debt

 

398,355

 

 

600,123

Deferred income taxes

 

65,104

 

 

70,432

Other non-current liabilities

 

196,289

 

 

179,883

 

 

 

 

STOCKHOLDERS' EQUITY

 

1,353,696

 

 

942,875

Total liabilities and stockholders' equity

$

6,837,244

 

$

6,478,903

BJ'S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands, except per share amounts)

(Unaudited)

 

Thirty-Nine Weeks Ended October 28, 2023

 

Thirty-Nine Weeks Ended October 29, 2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net income

$

377,869

 

 

$

383,396

 

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

 

 

 

 

Depreciation and amortization

 

166,421

 

 

 

149,259

 

Amortization of debt issuance costs and accretion of original issue discount

 

900

 

 

 

2,282

 

Debt extinguishment charges

 

1,830

 

 

 

687

 

Stock-based compensation expense

 

29,011

 

 

 

27,965

 

Deferred income tax provision

 

12,149

 

 

 

18,474

 

Changes in operating leases and other non-cash items

 

3,684

 

 

 

26,235

 

Increase (decrease) in cash due to changes in:

 

 

 

 

Accounts receivable

 

15,205

 

 

 

(73,162

)

Merchandise inventories

 

(283,301

)

 

 

(173,361

)

Accounts payable

 

123,262

 

 

 

250,951

 

Accrued expenses and other current liabilities

 

29,916

 

 

 

(3,802

)

Other operating assets and liabilities, net

 

(32,415

)

 

 

3,933

 

Net cash provided by operating activities

 

444,531

 

 

 

612,857

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

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

 

(335,641

)

 

 

(283,216

)

Acquisition

 

 

 

 

(376,521

)

Net cash used in investing activities

 

(335,641

)

 

 

(659,737

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from the issuance of long-term debt

 

305,041

 

 

 

 

Payments on long-term debt

 

(355,041

)

 

 

(150,000

)

Proceeds from revolving lines of credit

 

564,000

 

 

 

1,110,000

 

Payments on revolving lines of credit

 

(535,000

)

 

 

(815,000

)

Debt issuance costs paid

 

(1,722

)

 

 

(2,733

)

Net cash received from stock option exercises

 

2,369

 

 

 

6,545

 

Net cash received from Employee Stock Purchase Program (ESPP)

 

3,255

 

 

 

2,331

 

Acquisition of treasury stock

 

(101,819

)

 

 

(127,458

)

Proceeds from financing obligations

 

11,691

 

 

 

16,949

 

Other financing activities

 

(2,028

)

 

 

(4,546

)

Net cash (used in) provided by financing activities

 

(109,254

)

 

 

36,088

 

Net decrease in cash and cash equivalents

 

(364

)

 

 

(10,792

)

Cash and cash equivalents at beginning of period

 

33,915

 

 

 

45,436

 

Cash and cash equivalents at end of period

$

33,551

 

 

$

34,644

 

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; impairment charges; 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.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information under "Fiscal 2023 Ending February 3, 2024" 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, which is the most directly comparable forward-looking GAAP financial measure. 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 2023 Ending February 3, 2024" above, including expectations that GAAP and 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 net income per diluted share

(Amounts in thousands, except per share amounts)

(Unaudited)

 

13 Weeks Ended

October 28, 2023

 

13 Weeks Ended

October 29, 2022

 

39 Weeks Ended

October 28, 2023

 

39 Weeks Ended

October 29, 2022

Net income as reported

$ 130,467

 

$ 129,942

 

$ 377,869

 

$ 383,396

Adjustments:

 

 

 

 

 

 

 

Acquisition and integration costs (a)

 

857

 

 

12,324

Home office transition costs (b)

 

5,897

 

 

7,096

Impairment expense on discontinued operations club lease

 

1,199

 

 

1,199

Charges related to debt (c)

1,830

 

298

 

1,830

 

687

Other adjustments (d)

 

 

(786)

 

(165)

Tax impact of adjustments to net income (e)

(518)

 

(2,363)

 

(296)

 

(5,987)

Adjusted net income

$ 131,779

 

$ 135,830

 

$ 378,617

 

$ 398,550

 

 

 

 

 

 

 

 

Weighted-average diluted shares outstanding

134,984

 

136,621

 

135,338

 

136,630

Adjusted EPS (f)

$ 0.98

 

$ 0.99

 

$ 2.80

 

$ 2.92

(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, other non-recurring lease costs and write-off of impaired assets as the Company transitioned home office locations in fiscal 2022.

(c) Represents the expensing of fees and deferred fees and original issue discount associated with the extinguishment of the ABL Facility in fiscal 2022 and amendment of the senior secured first lien term loan in fiscal 2023.

(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

October 28, 2023

 

13 Weeks Ended

October 29, 2022

 

39 Weeks Ended

October 28, 2023

 

39 Weeks Ended

October 29, 2022

Income from continuing operations

$

130,467

 

$

131,394

 

$

377,780

 

$

384,862

Interest expense, net

 

18,004

 

 

12,450

 

 

48,968

 

 

31,166

Provision for income taxes

 

50,904

 

 

48,124

 

 

159,666

 

 

129,165

Depreciation and amortization

 

57,406

 

 

52,166

 

 

166,421

 

 

149,259

Stock-based compensation expense

 

9,380

 

 

9,463

 

 

29,011

 

 

27,965

Pre-opening expenses (a)

 

6,001

 

 

10,707

 

 

11,479

 

 

21,508

Non-cash rent (b)

 

2,394

 

 

1,025

 

 

6,226

 

 

3,127

Acquisition and integration costs (c)

 

 

 

857

 

 

 

 

12,324

Home office transition costs (d)

 

 

 

5,897

 

 

 

 

7,096

Other adjustments (e)

 

364

 

 

222

 

 

1,112

 

 

332

Adjusted EBITDA

$

274,920

 

$

272,305

 

$

800,663

 

$

766,804

(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 incremental rent expense, other non-recurring lease costs and write-off of impaired assets as the Company transitioned home office locations in fiscal 2022.

(e) Other non-cash items, including non-cash accretion on asset retirement obligations and obligations associated with our post-retirement medical plan.

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation to Free Cash Flow

(Amounts in thousands)

(Unaudited)

 

13 Weeks Ended

October 28, 2023

 

13 Weeks Ended

October 29, 2022

 

39 Weeks Ended

October 28, 2023

 

39 Weeks Ended

October 29, 2022

Net cash provided by operating activities

$

175,031

 

 

$

169,805

 

 

$

444,531

 

 

$

612,857

 

Less: Additions to property and equipment, net of disposals

 

(133,711

)

 

 

(102,774

)

 

 

(347,951

)

 

 

(294,308

)

Plus: Proceeds from sale leaseback transactions

 

6,322

 

 

 

8,418

 

 

 

12,310

 

 

 

11,092

 

Free cash flow

$

47,642

 

 

$

75,449

 

 

$

108,890

 

 

$

329,641

 

BJ'S WHOLESALE CLUB HOLDINGS, INC.

Reconciliation of Net Debt and Net Debt to LTM adjusted EBITDA

(Amounts in thousands)

(Unaudited)

 

 

October 28, 2023

Total debt

$

832,355

Less: Cash and cash equivalents

 

33,551

Net Debt

$

798,804

 

 

Income from continuing operations

$

507,180

Interest expense, net

 

65,264

Provision for income taxes

 

206,763

Depreciation and amortization

 

218,096

Stock-based compensation expense

 

43,663

Pre-opening expenses

 

14,904

Non-cash rent

 

7,090

Home office transition costs

 

7,610

Other adjustments

 

1,422

Adjusted EBITDA

$

1,071,992

 

 

Net debt to LTM adjusted EBITDA

0.7x

See descriptions of adjustments in the “Reconciliation to Adjusted EBITDA (unaudited)” table above.

Contacts

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

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