BJ’s Wholesale Club (BJ) - 2025 Q1 - Quarterly Report

Financial Performance - Net sales for the first quarter of fiscal year 2024 were $4.8 billion, a 4.0% increase from $4.6 billion in the first quarter of fiscal year 2023[124] - Membership fee income increased by 8.6% to $111.4 million in the first quarter of fiscal year 2024, up from $102.5 million in the same period last year[128] - Comparable club sales increased by 1.6% in the first quarter of fiscal year 2024, compared to a 2.0% increase in the first quarter of fiscal year 2023[123] - Merchandise comparable club sales rose by 0.6% in the first quarter of fiscal year 2024, driven by a 1.4% increase in grocery sales[126] - Adjusted net income for the first quarter of fiscal year 2024 was $113.4 million, compared to $115.6 million in the first quarter of fiscal year 2023[137] - Adjusted EBITDA for the first quarter of fiscal year 2024 was $236.4 million, down from $251.5 million in the prior year[139] Costs and Expenses - Cost of sales was $4.0 billion, representing 83.9% of net sales in the first quarter of fiscal year 2024, compared to 83.2% in the prior year[130] - SG&A expenses increased by 4.7% to $721.8 million in the first quarter of fiscal year 2024, up from $689.3 million in the same period last year[132] - Interest expense for the first quarter of fiscal year 2024 was $14.0 million, a decrease from $14.7 million in the same quarter of fiscal year 2023, due to reduced borrowings and interest rate fluctuations[162] - Income tax expense decreased to $35.8 million in the first quarter of fiscal 2024 from $56.1 million in the same quarter of fiscal 2023, primarily due to higher tax benefits from stock-based compensation[163] - The company expects SG&A expenses to increase in future periods due to investments in comparable club sales growth and the expansion of its footprint[160] Cash Flow and Debt - Net cash provided by operating activities was $200.8 million for the first three months of fiscal year 2024, compared to $119.1 million in the same period last year[142] - Adjusted free cash flow for the first quarter of fiscal year 2024 was $95.1 million, significantly up from $27.0 million in the prior year[175] - The company’s total debt outstanding as of May 4, 2024, was $670.0 million, including $270.0 million under the ABL Revolving Facility and $400.0 million under the First Lien Term Loan[211] - The company had $911.6 million of unused capacity under its ABL Revolving Facility as of May 4, 2024[140] Membership and Private Label Brands - The company has over 7 million members, with annual membership fees of $55 for Club Card and $110 for Club+ memberships, leading to membership fee income of $429.5 million for the trailing twelve months ended May 4, 2024[144] - The company's two private label brands, Wellsley Farms® and Berkley Jensen®, generated approximately $4.1 billion in annual sales for fiscal year 2023[144] Pre-opening and Future Outlook - Pre-opening expenses decreased to $0.9 million in the first quarter of fiscal year 2024 from $3.9 million in the same quarter of fiscal year 2023, reflecting fewer club openings[161] - Comparable club sales increased by 1.6% for the first quarter of fiscal 2024, with merchandise comparable club sales growth at 0.6% after accounting for a 1.0% impact from gasoline sales[155]