- Comparable club sales, excluding gasoline sales, increased by
27.0%, including digitally enabled sales growth of 350% for the
first quarter of fiscal 2020.
- Income from continuing operations increased by 165.3%
year-over-year to $95.7 million, for the first quarter of fiscal
2020.
- Adjusted EBITDA increased by 56.3% year-over-year to $193.9
million, for the first quarter of fiscal 2020.
- Earnings per diluted share of $0.69, reflects a 176.0%
year-over-year growth.
- Adjusted earnings per diluted share of $0.69, reflects 165.4%
year-over-year growth.
- Net cash provided by operating activities was $469.9 million
and free cash flow was $434.7 million, for the first quarter of
fiscal 2020.
- Company recognizes dedication of BJ's team members and invests
$51 million in wages and bonuses.
BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the "Company")
today announced its financial results for the thirteen weeks ended
May 2, 2020.
“Our top priority remains the health and safety of our members
and team members during this challenging time and I am deeply
thankful for the contributions of our dedicated team members this
past quarter,” said Lee Delaney, President and Chief Executive
Officer, BJ’s Wholesale Club. "While the coronavirus pandemic
increased demand for our services, our team's hard work and the
capabilities we have built over the last four years have enabled us
to thrive and deliver very strong merchandise comparable sales.
Furthermore, we drove earnings and cash flow growth and invested in
our team members and our business. These efforts will allow us to
continue to build on this momentum and position ourselves for
success over the long-term."
Key Measures for the Thirteen Weeks
Ended May 2, 2020 (First Quarter of Fiscal 2020):
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
(Amounts in thousands, except per share
amounts)
13 Weeks Ended
13 Weeks Ended
May 2, 2020
May 4, 2019
% Growth
Net sales
$
3,718,040
$
3,069,763
21.1
%
Membership fee income
79,565
73,373
8.4
%
Total revenues
3,797,605
3,143,136
20.8
%
Operating income
143,750
70,682
103.4
%
Income from continuing operations
95,742
36,085
165.3
%
Adjusted EBITDA (a)
193,915
124,076
56.3
%
Net income
95,734
35,798
167.4
%
EPS (b)
0.69
0.25
176.0
%
Adjusted net income(a)
95,734
36,678
161.0
%
Adjusted EPS (a)
0.69
0.26
165.4
%
Basic weighted average shares
outstanding
136,090
136,810
(0.5
)%
Diluted weighted average shares
outstanding
138,428
140,463
(1.4
)%
a)
See “Note Regarding Non-GAAP Financial
Information”
b)
EPS represents earnings per diluted
share
Additional Highlights:
- Comparable club sales for the first quarter of fiscal 2020
increased 19.9%, compared to the first quarter of fiscal 2019.
Comparable club sales, excluding the impact of gasoline sales,
increased 27.0% compared to the first quarter of fiscal 2019.
- Gross profit increased to $736.7 million in the first quarter
of fiscal 2020 from $574.2 million in the first quarter of fiscal
2019. Merchandise gross margin rate, which excludes gasoline sales
and membership fee income, decreased by approximately 30 basis
points over the first quarter of fiscal 2019. While merchandise
margins benefited from the strong sales performance and continued
execution of our category profitability improvement initiatives,
these drivers were offset by distribution costs associated with the
coronavirus pandemic, the decline in our higher-margin apparel
business and the temporary shut-down of our higher-margin services
business.
- Selling, general and administrative expenses ("SG&A")
increased to $590.4 million in the first quarter of fiscal 2020,
compared to $501.2 million in the first quarter of fiscal 2019.
SG&A in the first quarter of fiscal 2019 included charges
related to our initial public offering and the registered offerings
by selling stockholders (such offering costs, collectively,
"offering costs") of $1.2 million. The year-over-year increase in
SG&A expense was primarily driven by costs associated with the
coronavirus pandemic, including wage increases, bonuses, safety and
protective equipment and other operational costs, such as
security.
- Operating income increased to $143.8 million, or 3.8% of total
revenues in the first quarter of fiscal 2020, compared to $70.7
million, or 2.2% of total revenues in the first quarter of fiscal
2019. Operating income in the first quarter of fiscal 2019 included
charges associated with offering costs of $1.2 million.
- Interest expense, net, decreased to $21.8 million in the first
quarter of fiscal 2020, compared to $27.8 million in the first
quarter of fiscal 2019. The decrease in interest expense was driven
by continued de-levering, the repricing of our first lien term loan
facility, which was completed in January 2020.
- Income tax expense was $26.2 million in the first quarter of
fiscal 2020, compared to income tax expense of $6.8 million in the
first quarter of fiscal 2019. The first quarter of fiscal 2020
included a benefit of $4.5 million from excess tax benefits related
to stock-based compensation compared to $4.9 million in the first
quarter of fiscal 2019.
- Early in the quarter of fiscal 2020, we repurchased 175,000
shares of common stock, totaling $4.0 million, under the share
repurchase program.
Response to COVID-19:
In response to the coronavirus pandemic, BJ's implemented a
number of operational changes to support team members, members and
communities we serve.
Team Member Support
- Increased all hourly team members wages by an additional $2 per
hour.
- Distributed special bonuses for managers and key personnel,
incremental to the annual incentive program.
- Issued an emergency paid leave policy to support team members.
The emergency paid leave policy includes:
- Waived absenteeism policy.
- Pay for up to fourteen days when under mandated
quarantine.
- Pay through a mix of accrued sick time and company paid time if
a team member tests positive for coronavirus and needs to
self-quarantine.
- Ensured Aisle Help, the Company’s employee relief fund, is
available to team members facing financial hardship.
- Implemented operational processes to encourage social
distancing in clubs, including instructional signage.
- Provided personal protective equipment to all team
members.
- Implemented enhanced cleaning and sanitization procedures at
clubs, distribution centers and the home office.
- Installed mobile and fixed sneeze-guard barriers at the
membership desk, in checkout lanes and at exits.
- Implemented remote working for home office team members.
- Closed all BJ’s clubs on Easter Sunday, April 12, 2020 to offer
team members a day to rest and recharge.
Member Support:
- Prioritized safety and followed recommendations from the
Centers for Disease Control and Prevention (CDC) to ensure clubs
exceed the company’s already high standards for general hygiene and
health practices.
- Focused on getting high-demand products to its clubs as quickly
as possible and offering members alternative shopping methods like
Buy Online, Pick Up in-Club and Same-Day Delivery.
- Reduced club hours to give team members more time to restock,
sanitize and recharge.
- Limited the number of members allowed to shop inside clubs to
no more than 20% of total capacity, at any given time.
- Temporarily closed all BJ's Optical centers and cellular
services.
Community Support:
- Increased workforce by actively adding permanent and temporary
positions in clubs throughout the Eastern United States.
- Announced dedicated shopping hours for members age 60 and over
to shop in a less crowded environment.
- Implemented "Appreciation Hour" for first responders and
healthcare workers, so they can shop during a designated hour on
Sundays without a membership.
- Contributed $1 million from the BJ’s Charitable Foundation to
support hospitals throughout our footprint and local and national
organizations providing essential services and support to those in
need during these challenging times.
- Donated countless items to first responders, healthcare workers
and nonprofits to help support communities.
- Continued to donate perishable food on a weekly basis to local
food banks across our footprint through the Feeding Communities
program.
To learn more about our response to the coronavirus pandemic and
the additional measures we have taken, please visit:
https://newsroom.bjs.com/BJs-Response-to-Coronavirus/default.aspx
Conference Call Details
A conference call to discuss the first quarter fiscal 2020
financial results is scheduled for today, May 21, 2020, at 8:30
a.m. Eastern Time. Investors and analysts interested in
participating in the call are invited to dial 877-274-0290
(international callers please dial 647-689-5405) approximately 10
minutes prior to the start of the call. A live audio webcast of the
conference call will be available online at
https://investors.bjs.com.
A recorded replay of the conference call will be available
within two hours of the conclusion of the call and can be accessed
both online at https://investors.bjs.com and by dialing
416-621-4642 and entering the access code 8152109. The recorded
replay will be available until May 28, 2020 and an online archive
of the webcast will be available for one year.
About BJ’s Wholesale Club Holdings, Inc.
Headquartered in Westborough, Massachusetts, BJ's Wholesale Club
Holdings, Inc. is a leading operator of membership warehouse clubs
in the Eastern United States. The company currently operates 218
clubs and 146 BJ's Gas® locations in 17 states.
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)
13 Weeks Ended
13 Weeks Ended
May 2, 2020
May 4, 2019
Net sales
$
3,718,040
$
3,069,763
Membership fee income
79,565
73,373
Total revenues
3,797,605
3,143,136
Cost of sales
3,060,893
2,568,977
Selling, general and administrative
expenses
590,361
501,181
Pre-opening expense
2,601
2,296
Operating income
143,750
70,682
Interest expense, net
21,844
27,789
Income from continuing operations before
income taxes
121,906
42,893
Provision for income taxes
26,164
6,808
Income from continuing operations
95,742
36,085
Loss from discontinued operations, net of
income taxes
(8
)
(287
)
Net income
$
95,734
$
35,798
Income per share attributable to common
stockholders - basic:
Income from continuing operations
$
0.70
$
0.26
Loss from discontinued operations
—
—
Net income
$
0.70
$
0.26
Income per share attributable to common
stockholders - diluted:
Income from continuing operations
$
0.69
$
0.26
Loss from discontinued operations
—
(0.01
)
Net income
$
0.69
$
0.25
Weighted average number of shares
outstanding:
Basic
136,090
136,810
Diluted
138,428
140,463
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Amounts in thousands)
(Unaudited)
May 2, 2020
May 4, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
132,915
$
29,877
Accounts receivable, net
193,884
180,379
Merchandise inventories
1,024,937
1,085,565
Prepaid expense and other current
assets
46,631
47,403
Total current assets
1,398,367
1,343,224
Operating lease right-of-use assets,
net
2,087,902
2,055,733
Property and equipment, net
753,297
728,762
Goodwill
924,134
924,134
Intangibles, net
144,019
157,103
Other assets
20,350
17,760
Total assets
$
5,328,069
$
5,226,716
LIABILITIES
Current liabilities:
Current portion of long-term debt
$
15,377
$
246,377
Current portion of operating lease
liabilities
125,976
121,878
Accounts payable
990,420
820,489
Accrued expenses and other current
liabilities
588,431
485,168
Total current liabilities
1,720,204
1,673,912
Long-term lease liabilities
2,016,206
1,966,688
Long-term debt
1,334,795
1,543,537
Deferred income taxes
42,369
44,934
Other noncurrent liabilities
181,998
145,954
STOCKHOLDERS' EQUITY (DEFICIT)
32,497
(148,309
)
Total liabilities and stockholders' equity
(deficit)
$
5,328,069
$
5,226,716
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Amounts in thousands)
(Unaudited)
13 Weeks Ended May 2,
2020
13 Weeks Ended May 4,
2019
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
95,734
$
35,798
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
40,839
38,670
Amortization of debt issuance costs and
accretion of original issue discount
1,197
1,323
Other non-cash items, net
2,637
287
Stock-based compensation expense
5,514
3,844
Deferred income tax provision
1,590
4,501
Increase (decrease) in cash due to changes
in:
Accounts receivable
12,469
13,921
Merchandise inventories
56,565
(33,259
)
Accounts payable
204,008
(516
)
Accrued expenses
40,983
(41,801
)
Other operating assets and liabilities,
net
8,366
22,168
Net cash provided by operating
activities
469,902
44,936
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to property and equipment, net
of disposals
(35,212
)
(36,534
)
Net cash used in investing activities
(35,212
)
(36,534
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Payments on long term debt
(3,297
)
(3,844
)
Net payments on ABL Facility
(328,000
)
(8,000
)
Net cash received from stock option
exercises
5,608
6,320
Acquisition of treasury stock
(6,073
)
—
Other financing activities
(217
)
(147
)
Net cash used in financing activities
(331,979
)
(5,671
)
Net increase in cash and cash
equivalents
102,711
2,731
Cash and cash equivalents at beginning of
period
30,204
27,146
Cash and cash equivalents at end of
period
$
132,915
$
29,877
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 and net debt and net debt to LTM adjusted EBITDA.
We define adjusted net income as net income attributable to
common stockholders adjusted for: stock-based compensation related
to the IPO; offering costs; management fees; club closing and
impairment charges; reduction in force severance; gain on sale
leaseback transactions; charges related to debt restructurings and
retirements; 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; strategic consulting; offering
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 transaction.
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 assists
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 stores. The amount
and timing of pre-opening expenses are dependent on, among other
things, the size of new stores opened and the number of new stores
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.
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
13 Weeks Ended
May 2, 2020
May 4, 2019
Net income as reported
$
95,734
$
35,798
Adjustments:
Offering costs (a)
—
1,222
Tax impact of adjustments to net income
(b)
—
(342
)
Adjusted net income
$
95,734
$
36,678
Weighted average diluted shares
outstanding
138,428
140,463
Adjusted net income per diluted share
(c)
$
0.69
$
0.26
(a)
Represents costs related to registered
offerings by selling stockholders.
(b)
Represents the tax effect of the above
adjustments at a statutory tax rate of approximately 28%.
(c)
Adjusted net income per diluted share 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
13 Weeks Ended
May 2, 2020
May 4, 2019
Income from continuing
operations
$
95,742
$
36,085
Interest expense, net
21,844
27,789
Provision for income taxes
26,164
6,808
Depreciation and amortization
40,839
38,670
Stock-based compensation expense (a)
5,514
3,844
Pre-opening expenses (b)
2,601
2,296
Non-cash rent (c)
1,504
754
Strategic consulting (d)
—
6,739
Offering costs (e)
—
1,222
Other adjustments (f)
(293
)
(131
)
Adjusted EBITDA
$
193,915
$
124,076
(a)
Represents total stock-based compensation
expense.
(b)
Represents direct incremental costs of
opening or relocating a facility that are charged to operations as
incurred.
(c)
Consists of an adjustment to remove the
non-cash portion of rent expense.
(d)
Represents fees paid to external
consultants for strategic initiatives of limited duration.
(e)
Represents costs related to registered
offerings by selling stockholders.
(f)
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
13 Weeks Ended
May 2, 2020
May 4, 2019
Net cash provided by operating
activities
$
469,902
$
44,936
Less: Additions to property and equipment,
net of disposals
35,212
36,534
Plus: Proceeds from sale leaseback
transaction
—
—
Free cash flow
$
434,690
$
8,402
BJ'S WHOLESALE CLUB HOLDINGS,
INC.
Reconciliation of Net Debt and Net Debt
to LTM adjusted EBITDA
(Amounts in thousands)
(Unaudited)
May 2, 2020
Total debt
$
1,350,172
Less: Cash and cash equivalents
132,915
Net Debt
$
1,217,257
Income from continuing operations
247,414
Interest expense, net
102,285
Provision for income taxes
75,568
Depreciation and amortization
159,169
Stock-based compensation expense (a)
20,466
Pre-opening expenses (b)
15,457
Non-cash rent (c)
9,124
Strategic consulting (d)
4,610
Reduction in force severance (g)
3,994
Offering costs (e)
706
Club closings and impairment charges
(h)
15,383
Other adjustments (f)
(2,713
)
Adjusted EBITDA
$
651,463
Net debt to LTM adjusted EBITDA
1.9
x
(a)
Represents total stock-based compensation
expense.
(b)
Represents direct incremental costs of
opening or relocating a facility that are charged to operations as
incurred.
(c)
Consists of an adjustment to remove the
non-cash portion of rent expense.
(d)
Represents fees paid to external
consultants for strategic initiatives of limited duration.
(e)
Represents costs related to the registered
offerings by selling stockholders.
(f)
Other non-cash items, including non-cash
accretion on asset retirement obligations, termination costs to
former executives and obligations associated with our
post-retirement medical plan, amortization of a deferred gain from
sale leaseback transactions in 2013, impairment charges related to
a club that was relocated in 2018 and a gain from a third party
settlement.
(g)
Represents severance charges associated
with a reduction in workforce announced in January 2020.
(h)
Represents primarily closing costs
associated with our clubs in Charlotte, N.C. and Geneva, N.Y.,
which closed in the fourth quarter of fiscal 2019 and other
impairment charges.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200521005095/en/
Investor Contact: Faten Freiha, BJ's Wholesale Club (774)
512-6320 ffreiha@bjs.com
Media Contact: Kristy Houston, BJ’s Wholesale Club (774)
512-5086 khouston@bjs.com
BJs Wholesale Club (NYSE:BJ)
Historical Stock Chart
From Aug 2024 to Sep 2024
BJs Wholesale Club (NYSE:BJ)
Historical Stock Chart
From Sep 2023 to Sep 2024