1 BJ's Wholesale Club Holdings, Inc. Investor Presentation August 2022 Disclaimer Forward-Looking Statements: This presentation contains forward-looking statements that are subject to risks and uncertainties. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements detail the company's financial position and performance for the specified periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased significantly, driven by higher inventories, debt, and improved stockholders' equity | Metric | July 30, 2022 (in thousands) | January 29, 2022 (in thousands) | July 31, 2021 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------ | :----------------------------- | | **Total Assets** | $6,387,244 | $5,668,894 | $5,347,599 | | Cash and cash equivalents | $163,681 | $45,436 | $42,414 | | Merchandise inventories | $1,376,526 | $1,242,935 | $1,033,555 | | Property and equipment, net | $1,232,103 | $942,331 | $841,521 | | Goodwill | $1,008,816 | $924,134 | $924,134 | | **Total Liabilities** | $5,733,653 | $3,018,326 | $2,809,097 | | Short-term debt | $350,000 | — | — | | Accounts payable | $1,243,286 | $1,112,783 | $1,029,726 | | **Total Stockholders' Equity** | $853,591 | $648,108 | $488,352 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Strong revenue and net income growth was driven by increased net sales and membership fees | Metric (in thousands) | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $5,005,030 | $4,088,402 | $9,404,840 | $7,870,236 | | Membership fee income | $98,786 | $88,753 | $195,411 | $175,141 | | Total revenues | $5,103,816 | $4,177,155 | $9,600,251 | $8,045,377 | | Operating income | $202,910 | $163,784 | $353,227 | $290,038 | | Net income | $141,007 | $110,988 | $253,457 | $192,567 | | Basic EPS | $1.05 | $0.82 | $1.89 | $1.42 | | Diluted EPS | $1.03 | $0.80 | $1.85 | $1.39 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity grew due to net income and paid-in capital, partially offset by treasury stock purchases | Metric (in thousands) | January 29, 2022 | April 30, 2022 | July 30, 2022 | | :-------------------------------- | :--------------- | :------------- | :------------ | | Total Stockholders' Equity | $648,108 | $721,342 | $853,591 | | Net income | $131,313 | $112,450 | $141,007 | | Additional Paid-in Capital | $902,704 | $914,120 | $928,548 | | Treasury Stock Amount | $(388,668) | $(440,010) | $(463,198) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased while investing cash use increased, offset by a net provision from financing activities | Metric (in thousands) | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $443,052 | $559,313 | | Net cash used in investing activities | $(565,381) | $(128,728) | | Net cash provided by (used in) financing activities | $240,574 | $(431,689) | | Net increase (decrease) in cash and cash equivalents | $118,245 | $(1,104) | | Cash and cash equivalents at end of period | $163,681 | $42,414 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, revenue, debt, equity, and the impact of acquisitions and inflation [1. Description of Business](index=11&type=section&id=1.%20Description%20of%20Business) The company operates 229 warehouse clubs and recently acquired Burris Logistics' distribution centers amid ongoing inflation - As of July 30, 2022, the Company operated **229 warehouse clubs and 160 gas stations** in 17 states[20](index=20&type=chunk) - On May 2, 2022, the Company acquired the assets and operations of four distribution centers and a related private transportation fleet from **Burris Logistics, LLC**[23](index=23&type=chunk) - The Company continued to experience **elevated supply chain costs**, including increased commodity prices, logistics, and procurement costs, during the second quarter of fiscal year 2022, expecting these pressures to continue throughout 2022[22](index=22&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Unaudited statements follow GAAP with recurring adjustments, noting seasonal business influences and no material policy changes - The unaudited interim financial statements reflect all normal recurring adjustments necessary for a fair statement in accordance with **GAAP**[24](index=24&type=chunk) - The Company's business is subject to seasonal influences, with sales and operating income typically **highest in the fourth quarter** holiday season and lowest in the first quarter[25](index=25&type=chunk) - There have been **no material changes** to the Company's accounting policies and no material pronouncements adopted since fiscal year 2021[27](index=27&type=chunk) [3. Revenue Recognition](index=11&type=section&id=3.%20Revenue%20Recognition) Revenue is recognized upon transfer of control, with membership fees deferred and gasoline sales increasing as a percentage of net sales - The Company recognizes net sales at clubs and gas stations when the customer takes possession of goods and tenders payment, and for e-commerce sales, when control of merchandise is transferred at the shipping point[29](index=29&type=chunk) | Deferred Revenue (in millions) | July 30, 2022 | January 29, 2022 | July 31, 2021 | | :----------------------------- | :------------ | :--------------- | :------------ | | BJ's Perks Rewards | $40.0 | $30.3 | $25.8 | | My BJ's Perks Rewards (Royalty) | $28.5 | $17.8 | $18.8 | | Membership fees | $185.4 | $174.9 | $169.3 | | Gift cards | $11.9 | $11.8 | $9.7 | | Net Sales Disaggregated by Category | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Grocery | 64% | 70% | 65% | 71% | | General Merchandise and Services | 12% | 15% | 12% | 15% | | Gasoline and Other | 24% | 15% | 23% | 14% | [4. Debt and Credit Arrangements](index=13&type=section&id=4.%20Debt%20and%20Credit%20Arrangements) The company refinanced its credit facility, increasing its borrowing capacity with a new $1.2 billion ABL Revolving Facility | Debt (in thousands) | July 30, 2022 | January 29, 2022 | July 31, 2021 | | :------------------------------------------ | :------------ | :--------------- | :------------ | | ABL Revolving Facility | $350,000 | — | — | | ABL Facility | — | $50,000 | $50,000 | | First Lien Term Loan | $701,920 | $701,920 | $701,920 | | Long-term debt | $699,406 | $748,568 | $747,730 | - On July 28, 2022, the Company entered into a new **ABL Revolving Facility with a $1.2 billion commitment**, replacing the former ABL Facility. The new facility matures on July 28, 2027[38](index=38&type=chunk) - As of July 30, 2022, there were **$350.0 million outstanding** in loans under the ABL Revolving Facility, with an interest rate of 3.42% and unused capacity of $576.7 million[40](index=40&type=chunk) [5. Commitments and Contingencies](index=14&type=section&id=5.%20Commitments%20and%20Contingencies) Routine legal proceedings are not expected to have a material impact on the company's financial statements - The Company is involved in various legal proceedings typical of a retail business[48](index=48&type=chunk) - Management does not believe the resolution of any current proceedings will result in a **material loss** to the condensed consolidated financial statements[48](index=48&type=chunk) [6. Stock Incentive Plans](index=14&type=section&id=6.%20Stock%20Incentive%20Plans) Stock-based compensation expense decreased year-over-year, with shares available for future issuance under the 2018 plan - The 2018 Plan authorizes the issuance of 13,148,058 shares, with **5,295,613 shares available for future issuance** as of July 30, 2022[50](index=50&type=chunk) - Stock-based compensation expense for the twenty-six weeks ended July 31, 2021, included **$17.5 million** related to the modification of stock awards associated with the passing of a former executive[52](index=52&type=chunk) | Stock-based Compensation Expense (in millions) | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :--------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock-based compensation expense | $9.4 | $7.3 | $18.5 | $34.6 | | ESPP expense | $0.3 | $0.4 | $0.5 | $0.5 | [7. Treasury Shares and Share Repurchase Program](index=15&type=section&id=7.%20Treasury%20Shares%20and%20Share%20Repurchase%20Program) The company repurchased shares under its 2021 program and acquired treasury shares to satisfy tax withholding obligations - The Company acquired **235,845 shares for $15.9 million** to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the twenty-six weeks ended July 30, 2022[56](index=56&type=chunk) - The 2021 Repurchase Program, approved on November 16, 2021, allows the Company to repurchase up to **$500.0 million** of its common stock and expires in January 2025[57](index=57&type=chunk) - As of July 30, 2022, the Company repurchased **923,506 shares for $58.6 million** under the 2021 Repurchase Program, with **$412.6 million remaining available**[58](index=58&type=chunk) [8. Income Taxes](index=16&type=section&id=8.%20Income%20Taxes) The effective income tax rate fluctuated due to varying levels of excess tax benefits from stock-based compensation - The increase in the effective tax rate for the thirteen weeks ended July 30, 2022, was primarily due to **lower excess tax benefits** from stock-based compensation[60](index=60&type=chunk) - The slight decrease in the effective tax rate for the twenty-six weeks ended July 30, 2022, was due to **higher excess tax benefits** from stock-based compensation in the current year period[60](index=60&type=chunk) | Effective Income Tax Rate | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Effective tax rate | 26.6% | 24.7% | 24.2% | 24.3% | [9. Fair Value Measurements](index=16&type=section&id=9.%20Fair%20Value%20Measurements) Fair value measurements are classified by input level, with derivative instruments expiring and debt fair value disclosed - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants[62](index=62&type=chunk) - The fair values of the Company's derivative instruments (interest rate swaps) were based on **Level 2 inputs** and expired in the first quarter of fiscal year 2022[63](index=63&type=chunk) | Debt (in thousands) | Carrying Amount (July 30, 2022) | Fair Value (July 30, 2022) | | :------------------ | :------------------------------ | :------------------------- | | First Lien Term Loan | $701,920 | $700,797 | | ABL Revolving Facility | $350,000 | $350,000 | | Total Debt | $1,051,920 | $1,050,797 | [10. Earnings Per Share](index=17&type=section&id=10.%20Earnings%20Per%20Share) Diluted EPS reflects an increase in weighted-average shares, excluding anti-dilutive securities | Weighted-Average Shares Outstanding | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic | 134,341,280 | 135,521,353 | 134,292,751 | 135,615,068 | | Diluted | 136,567,466 | 138,197,167 | 136,634,713 | 138,429,566 | | Incremental shares of potentially dilutive securities | 2,226,186 | 2,675,814 | 2,341,962 | 2,814,498 | | Anti-Dilutive Shares Excluded | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Restricted shares | 193,412 | 12,757 | 144,519 | 62,758 | | Restricted stock units | 11,811 | — | 5,905 | — | | ESPP | 510 | — | 255 | — | [11. Derivative Financial Instruments](index=18&type=section&id=11.%20Derivative%20Financial%20Instruments) Interest rate swap agreements used for cash flow hedging expired in February 2022 - The Company's interest rate swaps, which fixed the LIBOR component of **$1.2 billion** of floating rate debt at approximately 3.0%, **expired in February 2022**[70](index=70&type=chunk)[73](index=73&type=chunk) - The effective portion of gains or losses from interest rate swaps was recorded as a component of other comprehensive income, and the ineffective portion was recorded as interest expense[70](index=70&type=chunk) - There was **no liability recorded** for derivative instruments as of July 30, 2022, compared to $2.2 million at January 29, 2022, and $14.5 million at July 31, 2021[73](index=73&type=chunk)[75](index=75&type=chunk) [12. Acquisitions](index=18&type=section&id=12.%20Acquisitions) The acquisition of Burris Logistics' assets for $375.6 million aims to internalize the perishable supply chain - On May 2, 2022, the Company completed the acquisition of the assets and operations of four distribution centers and a related private transportation fleet from **Burris Logistics, LLC**[76](index=76&type=chunk) - The total consideration paid for the acquisition was approximately **$375.6 million**, excluding transaction costs[76](index=76&type=chunk) | Acquired Assets (in thousands) | Fair Value as of May 2, 2022 | | :----------------------------- | :--------------------------- | | Property and equipment, net | $203,400 | | Merchandise inventories | $88,072 | | Goodwill | $84,683 | | Operating lease right-of-use assets, net | $15,994 | | Total Assets | $392,682 | | Total Liabilities | $(17,100) | | Total consideration paid | $375,582 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, performance drivers, and macroeconomic impacts, highlighting sales and membership growth [Overview](index=21&type=section&id=Overview) The company is a leading East Coast warehouse club operator with over 6.5 million members and a newly internalized perishable supply chain - BJ's Wholesale Club operates **229 warehouse clubs** across 17 states, primarily on the east coast, and offers significant value to its members, including **25% or more savings** on manufacturer-branded groceries[86](index=86&type=chunk)[87](index=87&type=chunk) - As of the end of the second quarter of fiscal year 2022, the company had more than **6.5 million members**, with membership fee income of **$381.2 million** for the trailing twelve-months ended July 30, 2022[88](index=88&type=chunk) - The acquisition of Burris Logistics' distribution centers on May 2, 2022, brought the company's **end-to-end perishable supply chain in-house**[89](index=89&type=chunk) [Impact of the COVID-19 Pandemic](index=22&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) The pandemic continues to cause operational challenges, including supply chain constraints and inflation expected to persist in 2022 - The COVID-19 pandemic has led to ongoing operational challenges, including **supply chain constraints, inflation, and wage inflation**[92](index=92&type=chunk) - The company experienced **elevated supply chain costs**, including commodity prices, logistics, and procurement costs, during the thirteen weeks ended July 30, 2022, and expects these pressures to continue throughout 2022[93](index=93&type=chunk) [Factors Affecting Our Business](index=22&type=section&id=Factors%20Affecting%20Our%20Business) Business performance is influenced by gasoline prices, inflation, economic trends, and membership loyalty - **Gasoline prices impact net sales** and comparable club sales, with volatility potentially affecting short-term margins, though the company generally maintains a stable gross profit per gallon[94](index=94&type=chunk)[95](index=95&type=chunk) - The company continues to experience **increased commodity prices and general inflation**, impacting several business categories, and expects this to continue throughout 2022[96](index=96&type=chunk) - The membership renewal rate was **89%** at the end of fiscal year 2021, and membership fee income has grown for over 20 consecutive years, indicating strong member engagement and loyalty[99](index=99&type=chunk) - **Infrastructure investments**, including the Burris Logistics acquisition, are aimed at expanding club footprint, enhancing information systems, and improving digitally enabled shopping capabilities to support profitable growth[101](index=101&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Financial performance shows significant revenue and operating income growth driven by comparable sales and membership expansion | Metric (in thousands) | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net sales | $5,005,030 | $4,088,402 | $9,404,840 | $7,870,236 | | Membership fee income | $98,786 | $88,753 | $195,411 | $175,141 | | Total revenues | $5,103,816 | $4,177,155 | $9,600,251 | $8,045,377 | | Operating income | $202,910 | $163,784 | $353,227 | $290,038 | | Net income | $141,007 | $110,988 | $253,457 | $192,567 | | Total clubs at end of period | 229 | 222 | 229 | 222 | | Comparable club sales | 19.8% | 4.0% | 17.2% | 2.2% | | Merchandise comparable club sales increase (decrease) | 7.6% | (3.4)% | 5.9% | (4.2)% | | Adjusted EBITDA | $273,700 | $220,140 | $494,501 | $422,549 | | Free cash flow | $300,417 | $239,680 | $254,192 | $430,585 | [Thirteen Weeks Ended July 30, 2022 (Second Quarter of Fiscal Year 2022) Compared to Thirteen Weeks Ended July 31, 2021 (Second Quarter of Fiscal Year 2021)](index=24&type=section&id=Thirteen%20Weeks%20Ended%20July%2030%2C%202022%20(Second%20Quarter%20of%20Fiscal%20Year%202022)%20Compared%20to%20Thirteen%20Weeks%20Ended%20July%2031%2C%202021%20(Second%20Quarter%20of%20Fiscal%20Year%202021)) Q2 net sales grew 22.4% driven by a 19.8% increase in comparable club sales, though margins were pressured by costs - **Net sales** for the second quarter of fiscal year 2022 **increased by 22.4% to $5.0 billion**, primarily due to a 19.8% increase in comparable club sales[103](index=103&type=chunk) - **Membership fee income increased by 11.3% to $98.8 million**, driven by renewals, new members, and higher-tier membership penetration[106](index=106&type=chunk) - **Merchandise gross margin rate decreased 50 basis points** due to increased freight costs, investments in inflationary categories, and markdowns in general merchandise inventory[108](index=108&type=chunk) - **SG&A increased by 8.9% to $651.2 million**, primarily due to increased labor costs from wage investments and acquisition, integration, and operating expenses related to the Burris Logistics acquisition[111](index=111&type=chunk) - **Pre-opening expenses increased to $5.9 million** from $1.6 million, reflecting the timing of spend for new club and gas station openings, with 11 new club openings expected in fiscal year 2022[113](index=113&type=chunk) - **Interest expense decreased to $10.9 million** from $16.4 million due to lower debt balances and net losses on ineffective cash flow hedges in the prior year[114](index=114&type=chunk) - The **effective income tax rate increased to 26.6%** from 24.7%, primarily due to lower excess tax benefits from stock-based compensation[115](index=115&type=chunk) | Comparable Club Sales (13 Weeks Ended July 30, 2022) | Percentage | | :----------------------------------- | :--------- | | Comparable club sales | 19.8% | | Less: contribution from gasoline sales | 12.2% | | Merchandise comparable club sales | 7.6% | [Twenty-Six Weeks Ended July 30, 2022 (First Six Months of Fiscal Year 2022) Compared to Twenty-Six Weeks Ended July 31, 2021 (First Six Months of Fiscal Year 2021)](index=25&type=section&id=Twenty-Six%20Weeks%20Ended%20July%2030%2C%202022%20(First%20Six%20Months%20of%20Fiscal%20Year%202022)%20Compared%20to%20Twenty-Six%20Weeks%20Ended%20July%2031%2C%202021%20(First%20Six%20Months%20of%20Fiscal%20Year%202021)) First-half net sales grew 19.5% driven by a 17.2% increase in comparable club sales, with rising SG&A and pre-opening expenses - **Net sales** for the first six months of fiscal year 2022 **increased by 19.5% to $9.4 billion**, primarily due to a 17.2% increase in comparable club sales[116](index=116&type=chunk) - **Membership fee income increased by 11.6% to $195.4 million**, driven by renewals, new members, and increased penetration of higher-tier membership levels[120](index=120&type=chunk) - **Merchandise gross margin rate decreased 40 basis points** due to increased freight costs, investments in inflationary categories, and market-driven markdowns in general merchandise[122](index=122&type=chunk) - **SG&A increased by 7.4% to $1.3 billion**, primarily due to increased labor costs from wage investments and acquisition, integration, and operating expenses related to the Burris Logistics acquisition[125](index=125&type=chunk) - **Pre-opening expenses increased to $10.8 million** from $2.2 million, reflecting the timing of spend for new club and gas station openings, with 11 new club openings expected in fiscal year 2022[127](index=127&type=chunk) - **Interest expense decreased to $18.7 million** from $35.7 million due to lower debt balances and net losses on ineffective cash flow hedges in the prior year[128](index=128&type=chunk)[129](index=129&type=chunk) - The **effective income tax rate slightly decreased to 24.2%** from 24.3%, primarily due to higher excess tax benefits from stock-based compensation[130](index=130&type=chunk) | Comparable Club Sales (26 Weeks Ended July 30, 2022) | Percentage | | :----------------------------------- | :--------- | | Comparable club sales | 17.2% | | Less: contribution from gasoline sales | 11.3% | | Merchandise comparable club sales | 5.9% | [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures like Adjusted EBITDA and Free Cash Flow are reconciled to evaluate core operating performance - **Adjusted EBITDA** is defined 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[132](index=132&type=chunk) - **Free cash flow** is defined as net cash provided by operating activities less additions to property and equipment, net of disposals, plus proceeds from sale leaseback transactions[137](index=137&type=chunk) - **Free cash flow declined** for the first six months of fiscal year 2022 due to cash outflows for higher working capital, specifically inventory related to new club growth and strategic actions to improve in-stock levels[138](index=138&type=chunk) | Non-GAAP Metric (in thousands) | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Adjusted EBITDA | $273,700 | $220,140 | $494,501 | $422,549 | | Adjusted Net Income | $144,296 | $113,324 | $262,722 | $213,019 | | Free Cash Flow (in thousands) | 13 Weeks Ended July 30, 2022 | 13 Weeks Ended July 31, 2021 | 26 Weeks Ended July 30, 2022 | 26 Weeks Ended July 31, 2021 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Free cash flow | $300,417 | $239,680 | $254,192 | $430,585 | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is maintained through operating cash flows and an ABL facility, supporting operations and capital expenditures - Primary sources of liquidity are **cash flows from club operations** and borrowings from the ABL Revolving Facility[144](index=144&type=chunk) - As of July 30, 2022, **cash and cash equivalents totaled $163.7 million**, and there was **$576.7 million of unused capacity** under the ABL Revolving Facility[144](index=144&type=chunk) - **Net cash provided by operating activities decreased to $443.1 million** for the first six months of fiscal year 2022 from $559.3 million in the prior year, primarily due to cash outflows from inflation in inventory and improved inventory position[148](index=148&type=chunk)[147](index=147&type=chunk) - **Cash used for capital expenditures increased significantly to $565.4 million** for the first six months of fiscal year 2022, compared to $128.7 million in the prior year, mainly due to the Burris Logistics acquisition and property additions[149](index=149&type=chunk)[147](index=147&type=chunk) - **Net cash provided by financing activities was $240.6 million** for the first six months of fiscal year 2022, a shift from a net use of $431.7 million in the prior year, primarily due to drawing down on the ABL Facility and ABL Revolving Facility[150](index=150&type=chunk)[147](index=147&type=chunk) - The company **repurchased 923,506 shares for $58.6 million** under the 2021 Repurchase Program and used $50.0 million to extinguish the term loan associated with the ABL Facility in the first six months of fiscal year 2022[145](index=145&type=chunk) [Critical Accounting Policies and Use of Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) Financial statements rely on estimates, with a key policy being the use of the acquisition method for business combinations - The preparation of financial statements requires **estimates, assumptions, and judgments** affecting reported amounts of assets, liabilities, revenue, costs, and expenses[156](index=156&type=chunk) - Business combinations are accounted for using the **acquisition method**, allocating consideration to identifiable assets and liabilities based on estimated fair values, with any excess recorded as goodwill[157](index=157&type=chunk)[158](index=158&type=chunk) - The purchase price allocation for acquisitions is **preliminary and subject to change** during the measurement period (up to one year from acquisition date) as valuations are finalized[159](index=159&type=chunk) [Recent Accounting Pronouncements](index=31&type=section&id=Recent%20Accounting%20Pronouncements) No recent accounting pronouncements have materially impacted the company's financial statements - There have been **no recent accounting pronouncements** since those disclosed in the Annual Report on Form 10-K for fiscal year 2021[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market interest rate risk due to its variable-rate borrowings - The Company is exposed to changes in **market interest rates**, which impact net interest expense and cash flow from operations, as substantially all borrowings carry variable interest rates[161](index=161&type=chunk) - There have been **no material changes** in the Company's market risk from the disclosure included in the Annual Report on Form 10-K for fiscal year 2021[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of the end of the reporting period - Management concluded that **disclosure controls and procedures were effective** at the reasonable assurance level as of July 30, 2022[163](index=163&type=chunk) - Changes in internal control over financial reporting were related to the design and implementation of controls for the **Burris Logistics acquisition**, which was completed on May 2, 2022[164](index=164&type=chunk)[165](index=165&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal proceedings are not expected to have a material adverse impact on the company's business - The Company is subject to various litigation, claims, and other proceedings that arise from time to time in the **ordinary course of business**[166](index=166&type=chunk) - Management does not believe that any current legal actions will have a **material adverse impact** on the business, financial condition, or results of operations[166](index=166&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are materially unchanged, with an updated emphasis on cash flow generation for debt service - **No material changes** to risk factors were reported, except for an updated emphasis on the risk related to the company's ability to generate sufficient cash flow to satisfy debt service obligations[167](index=167&type=chunk)[168](index=168&type=chunk) - The inability to generate sufficient cash flow or obtain future borrowings could **materially adversely affect** the business, financial condition, and results of operations[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 353,000 shares under its 2021 Repurchase Program during the second quarter - As of July 30, 2022, **$412,561,277 remained available** to purchase under the 2021 Repurchase Program[171](index=171&type=chunk) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | :------------------------ | :----------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | | May 1, 2022 to May 28, 2022 | 45,446 | $55.06 | 45,000 | | May 29, 2022 to July 2, 2022 | 115,499 | $63.42 | 110,000 | | July 3, 2022 to July 30, 2022 | 198,000 | $67.45 | 198,000 | | Total | 358,945 | $64.59 | 353,000 | [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported during the period - **No defaults** upon senior securities were reported[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are **not applicable** to the Company[172](index=172&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - **No other information** was reported[172](index=172&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including credit agreements and certifications - The exhibits include Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation, Amendment to the Second Amended and Restated Bylaws, and the **Credit Agreement dated July 28, 2022**[173](index=173&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to **Sarbanes-Oxley Act Sections 302 and 906** are filed[173](index=173&type=chunk) - **Inline XBRL documents** (Instance, Schema, Calculation, Definition, Label, and Presentation Linkbase Documents) are filed[173](index=173&type=chunk) [Signature](index=34&type=section&id=Signature) The report is duly signed by the Executive Vice President and Chief Financial Officer - The report was signed by **Laura L. Felice**, Executive Vice President, Chief Financial Officer, and Principal Financial Officer, on August 26, 2022[175](index=175&type=chunk)

BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) Q2 2022 Earnings Conference Call August 18, 2022 8:30 AM ET Company Participants Catherine Park - VP, IR Robert Eddy - President, CEO Laura Felice - CFO William Werner - EVP, Strategy & Development Conference Call Participants Peter Benedict - Baird Edward Kelly - Wells Fargo Robby Ohmes - Bank of America Kate McShane - Goldman Sachs Chuck Grom - Gordon Haskett Krisztina Katai - Deutsche Bank Michael Baker - D.A. Davidson Operator Hello, everyone, and welcome to ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________ _______________________________ Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 BJ New York Stock Exchange FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

Workforce and Diversity - The company had approximately 34,000 full-time and part-time employees as of January 29, 2022[63]. - 45% of the total workforce were women and 48% were minorities at the end of fiscal year 2021[65]. - The company has implemented various health and wellness programs for team members, including onsite clinics and fitness centers[66]. - The company has a zero-tolerance policy on discrimination and harassment, supported by an Inclusion & Diversity council[65]. - The company provides training and development programs to help retain and advance team members into future roles[67]. Business Operations and Performance - The company experienced moderately seasonal business, with higher net sales and operating income typically in the second and fourth fiscal quarters[62]. - The company relies heavily on a large and loyal membership base, which significantly influences profitability and net sales[77]. - The company must attract new members to replace those who do not renew, as failure to do so could negatively impact membership fee income and net sales[80]. - The company’s operations depend on timely procurement of quality merchandise from a diverse range of vendors, which poses significant challenges[82]. - The company faces intense competition from major warehouse club operators like Sam's Club and Costco, which have greater financial resources[83]. - The company’s comparable club sales may fluctuate significantly due to competition and new club openings, which could cannibalize existing sales[99]. - Changes in consumer spending due to economic conditions could adversely affect the company's sales and require increased promotional expenses[75]. - The company relies on opening new clubs and gasoline stations for long-term sales and income growth, which involves substantial risks and high initial capital requirements[108]. Financial Risks and Debt - As of January 29, 2022, the company's total outstanding long-term debt was $748.6 million[154]. - The company faces risks related to its indebtedness, including exposure to interest rate risk associated with variable rate debt[154]. - The ABL Facility and First Lien Term Loan impose significant operating and financial restrictions on the company and its subsidiaries[156]. - The company may incur substantial additional indebtedness in the future, which could restrict its subsidiaries from making distributions or paying dividends[153]. - The company may not be able to generate sufficient cash flow to satisfy its debt service obligations, which could materially impact its financial condition[159]. Regulatory and Compliance - The company monitors changes in laws and believes it is in material compliance with applicable regulations[60]. - The company is subject to various environmental regulations, and non-compliance could result in significant costs and penalties, adversely affecting financial condition[128]. - The company is subject to payment-related risks, including compliance with Payment Card Industry Data Security Standards, which could lead to substantial fines if breached[94]. - The company faces risks related to payment security, including potential breaches that could adversely affect its reputation and operating results[94]. Market and Economic Conditions - The COVID-19 pandemic has caused significant disruptions, affecting member traffic and inventory levels, which may continue to impact financial performance[86]. - Changes in product mix, particularly an increase in private label sales, could negatively impact overall net sales and profit margins[101]. - The company’s ability to maintain pricing advantage is crucial, as significant price reductions by competitors could impact margins and operating results[110]. - The company faces risks related to inventory shrinkage, which could adversely affect financial condition and results of operations if rates exceed estimates[119]. Strategic Initiatives and Technology - The company’s strategic initiatives are overseen by executives with extensive backgrounds in operations, digital strategy, and market expansion[74]. - The implementation of technology initiatives may disrupt operations and fail to deliver anticipated benefits, requiring resource diversion from core business[118]. - The company must keep pace with evolving omnichannel retailing trends to meet changing member expectations, which is critical for maintaining competitive advantage[106]. Supply Chain and Distribution - The company relies on suppliers and contract manufacturers for compliance with regulatory requirements, which could impact reputation and marketing[59]. - The company relies on a third-party distributor for a majority of its perishables, and any disruption in this distributor's operations could significantly impact sales and profitability[91]. - The company has entered into an agreement to acquire four distribution centers from Burris Logistics, expected to close in Q2 of fiscal year 2022, aiming to bring the perishable supply chain in-house[91]. - The company imported approximately 4% of its merchandise directly from foreign countries during fiscal year 2021, exposing it to risks associated with international sourcing[135]. Shareholder Considerations - The company does not currently expect to pay any cash dividends and plans to retain future earnings for business operations and expansion[177]. - The share repurchase program may be limited, suspended, or discontinued at any time without prior notice, and there is no assurance that it will enhance long-term shareholder value[170]. - The trading market for the company's common stock is influenced by third-party securities analysts, and negative commentary or downgrades could lead to a decline in stock price[172]. - The company is significantly restricted in its ability to pay dividends due to limitations imposed by its ABL Facility and First Lien Term Loan[177]. Management and Governance - The company is dependent on key management and team members, and losing them could adversely affect operations[180]. - The company has anti-takeover provisions that could discourage or delay acquisition attempts, even if beneficial to shareholders[175]. - The company is exposed to risks related to evaluations of controls required by Section 404 of the Sarbanes-Oxley Act, which could adversely affect financial reporting accuracy[176].

Wholesale Club Holdings, Inc. (NYSE:BJ) Q4 2021 Results Conference Call March 3, 2022 8:30 AM ET Company Participants Catherine Park - VP, IR Robert Eddy - President, CEO Laura Felice - CFO William Werner - EVP, Strategy & Development Conference Call Participants Peter Benedict - Baird Robby Ohmes - Bank of America Chuck Grom - Gordon Haskett Michael Baker - D.A. Davidson Steph Wissink - Jefferies Edward Kelly - Wells Fargo Paul Lejuez - Citi Rupesh Parikh - Oppenheimer Operator Good morning, and welcome t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________ _______________________________ Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 BJ New York Stock Exchange FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF T ...

BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) Q3 2021 Results Earnings Conference Call November 18, 2021 8:30 AM ET Company Participants Robert Eddy - President and CEO Laura Felice - EVP and CFO William Werner - EVP, Strategic Development Conference Call Participants Kate McShane - Goldman Sachs Christopher Horvers - JPMorgan John Parke - Gordon Haskett Edward Kelly - Wells Fargo Robert Ohmes - Bank of America Mark Cotton - UBS Michael Baker - D.A. Davidson Rupesh Parikh - Oppenheimer Operator Hello everyon ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________ _______________________________ Title of each class Trading symbol(s) Name of each exchange on which registered Common Stock, par value $0.01 BJ New York Stock Exchange FORM 10-Q _______________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ...

BJ's Wholesale Club Holdings, Inc. (NYSE:BJ) Q2 2021 Earnings Conference Call August 19, 2021 8:30 AM ET Company Participants Faten Freiha - VP, IR Robert W. Eddy - President and CEO Laura Felice - EVP and CFO William Werner - EVP, Strategic Development Conference Call Participants Edward Kelly - Wells Fargo Robert Ohmes - Bank of America Christopher Horvers - J.P. Morgan John Parke - Gordon Haskett Rakesh Parekh - Oppenheimer Chuck Cerankosky - Northcoast Research Unidentified Analyst - Citigroup Michael K ...