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Share Name | Share Symbol | Market | Type |
---|---|---|---|
BJs Wholesale Club Holdings Inc | NYSE:BJ | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.96 | 1.10% | 88.44 | 88.69 | 86.76 | 86.76 | 1,177,647 | 01:00:00 |
Strong third quarter earnings led by membership growth, traffic and margin improvement
Third Quarter Fiscal 2023 Highlights
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:
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231117935731/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
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