BJ’s Wholesale Club (BJ) - 2026 Q2 - Quarterly Report

Financial Performance - Net sales for the second quarter of fiscal year 2025 were $5.3 billion, a 3.2% increase from $5.1 billion in the same period of fiscal year 2024[103]. - Operating income for the second quarter of fiscal year 2025 was $216.5 million, compared to $203.7 million in the same period of fiscal year 2024[101]. - Net income for the second quarter of fiscal year 2025 was $150.7 million, an increase from $145.0 million in the same period of fiscal year 2024[101]. - Adjusted net income for Q2 FY2025 was $151.5 million, up from $146.3 million in Q2 FY2024, with adjusted EPS increasing to $1.14 from $1.09[130]. - Adjusted EBITDA for Q2 FY2025 was $303.9 million, compared to $281.3 million in Q2 FY2024, and $589.7 million in the first six months of FY2025 compared to $517.7 million in the same period last year[134]. Membership and Fees - Membership fee income for the trailing twelve months ended August 2, 2025, was $475.7 million, reflecting over 25 consecutive years of growth in membership fee income[92]. - The annual membership fee for Club Card membership increased from $55 to $60 prior to January 1, 2025, while Club+ membership fees increased from $110 to $120[92]. - Membership fee income increased by 9.0% to $123.3 million in Q2 FY2025 compared to $113.1 million in Q2 FY2024, and by 8.6% to $243.7 million in the first six months of FY2025 compared to $224.5 million in the same period last year[111]. Sales and Operations - Comparable club sales decreased by 0.3% in the second quarter of fiscal year 2025, while merchandise comparable club sales increased by 2.3%[107]. - The company operates 255 clubs and 191 gas stations across 21 states as of the date of this filing, with a net increase of 11 clubs from the prior year[91]. - Cost of sales was $4.4 billion, or 83.2% of net sales, in Q2 FY2025, compared to $4.2 billion, or 83.4% of net sales, in Q2 FY2024, with merchandise gross margin rate increasing by 10 basis points[114]. Cash Flow and Investments - Net cash provided by operating activities for the second quarter of fiscal year 2025 was $249.9 million, up from $221.4 million in the same period of fiscal year 2024[101]. - Net cash provided by operating activities was $458.0 million for the first six months of FY2025, an increase from $422.2 million in the same period last year[139]. - Net cash used in investing activities was $306.2 million for the first six months of FY2025, compared to $239.6 million in the same period last year, driven by increased capital spending[141]. - Adjusted free cash flow for Q2 FY2025 was $87.3 million, relatively flat compared to $87.5 million in Q2 FY2024[144]. - For the first six months of FY2025, adjusted free cash flow decreased to $154.9 million from $182.6 million in the same period of FY2024, primarily due to increased capital spending[144]. Expenses and Taxation - SG&A expenses increased by 4.8% to $786.4 million in Q2 FY2025 from $750.3 million in Q2 FY2024, and by 5.1% to $1.55 billion in the first six months of FY2025 from $1.47 billion in the same period last year[118]. - Pre-opening expenses were $3.3 million in Q2 FY2025 compared to $2.6 million in Q2 FY2024, and $8.3 million in the first six months of FY2025 compared to $3.4 million in the same period last year[122]. - Interest expense, net decreased to $10.4 million in Q2 FY2025 from $12.8 million in Q2 FY2024, and to $21.5 million in the first six months of FY2025 from $26.7 million in the same period last year[124]. - The effective income tax rate increased to 26.9% in Q2 FY2025 from 24.1% in Q2 FY2024, and to 24.6% in the first six months of FY2025 from 24.2% in the same period last year[125][126]. Debt and Financing - As of August 2, 2025, total debt outstanding was $505.0 million, including $105.0 million under the ABL Revolving Facility and $400.0 million under the First Lien Term Loan[156]. - The interest rate on the ABL Revolving Facility was 5.45%, while the First Lien Term Loan had an interest rate of 5.88%[149][150]. - Unused capacity under the ABL Revolving Facility was $1.0 billion as of August 2, 2025[149]. - A 100 basis point change in prevailing market rates would result in an annual interest cost change of approximately $5.1 million[156]. - The company entered into an ABL Revolving Facility with an aggregate commitment of $1.2 billion, maturing on July 28, 2027[146]. - The Fifth Amendment of the First Lien Term Loan provided for a new tranche of term loans totaling $400.0 million, reducing the applicable margin from SOFR plus 200 basis points to SOFR plus 175 basis points[148]. - There were no material changes to the company's cash commitments from those described in the Annual Report for FY2024[151].