What changed in this filing

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Item 1. Financial Statements

2024-05-30 compared with 2023-11-22 · 104 added, 181 removed, 313 unchanged (48% of the section changed)

3 unchanged sentences

(Amounts in thousands, except par value)

October 28, 2023 January 28, 2023 October 29, 2022

May 4, 2024 February 3, 2024 April 29, 2023

Current assets:

27 unchanged sentences

Common stock, par value $ 0.01 ;

300,000 shares authorized, 147,470 shares issued and 133,494 outstanding at October 28, 2023;

146,347 shares issued and 133,903 outstanding at January 28, 2023;

and 146,243 shares issued and 134,429 outstanding at October 29, 2022

300,000 shares authorized, 148,247 shares issued and 132,708 outstanding at May 4, 2024;

147,544 shares issued and 132,768 outstanding at February 3, 2024;

and 147,380 shares issued and 134,376 outstanding at April 29, 2023

1,482 1,475 1,473

2 unchanged sentences

Accumulated other comprehensive income 501 501 1,049

Treasury stock, at cost, 13,976 shares at October 28, 2023;

12,444 shares at January 28, 2023;

and 11,814 shares at October 29, 2022

Treasury stock, at cost, 15,539 shares at May 4, 2024;

14,776 shares at February 3, 2024;

and 13,004 shares at April 29, 2023

( 774,670 ) ( 717,765 ) ( 601,590 )

6 unchanged sentences

Thirteen Weeks Ended

October 28, 2023 October 29, 2022

May 4, 2024 April 29, 2023

Net sales $ 4,807,129 $ 4,620,620

9 unchanged sentences

Income from continuing operations 111,019 115,988

Loss from discontinued operations, net of income taxes — ( 1,452 )

Income from discontinued operations, net of income taxes — 89

Net income $ 111,019 $ 116,077

1 unchanged sentence

Income from continuing operations $ 0.84 $ 0.87

Loss from discontinued operations — ( 0.01 )

Income from discontinued operations — —

Net income $ 0.84 $ 0.87

1 unchanged sentence

Income from continuing operations $ 0.83 $ 0.85

Loss from discontinued operations — ( 0.01 )

Income from discontinued operations — —

Net income $ 0.83 $ 0.85

2 unchanged sentences

Diluted 134,111 135,902

Other comprehensive income:

Total other comprehensive income — —

Other comprehensive loss:

Amounts reclassified from accumulated other comprehensive income, net of tax $ — $ ( 501 )

Total other comprehensive loss — ( 501 )

Total comprehensive income $ 111,019 $ 115,576

1 unchanged sentence

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands, except per share amounts)

Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022

Net sales $ 14,299,132 $ 14,090,673

Membership fee income 312,273 294,897

Total revenues 14,611,405 14,385,570

Cost of sales 11,932,120 11,857,263

Selling, general and administrative expenses 2,081,392 1,961,606

Pre-opening expenses 11,479 21,508

Operating income 586,414 545,193

Interest expense, net 48,968 31,166

Income from continuing operations before income taxes 537,446 514,027

Provision for income taxes 159,666 129,165

Income from continuing operations 377,780 384,862

Income (loss) from discontinued operations, net of income taxes 89 ( 1,466 )

Net income $ 377,869 $ 383,396

Income per share attributable to common stockholders—basic:

Income from continuing operations $ 2.84 $ 2.87

Income (loss) from discontinued operations — ( 0.01 )

Net income $ 2.84 $ 2.86

Income per share attributable to common stockholders—diluted:

Income from continuing operations $ 2.79 $ 2.82

Income (loss) from discontinued operations — ( 0.01 )

Net income $ 2.79 $ 2.81

Weighted-average shares of common stock outstanding:

Basic 133,232 134,225

Diluted 135,338 136,630

Other comprehensive income (loss):

Amounts released from other comprehensive income, net of tax $ ( 501 ) $ 117

Unrealized gain on cash flow hedge, net of income tax provision of $ 229 , at October 29, 2022

Total other comprehensive income (loss) ( 501 ) 705

Total comprehensive income $ 377,368 $ 384,101

The accompanying notes are an integral part of the consolidated financial statements.

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

6 unchanged sentences

Shares Amount Shares Amount

Balance, January 28, 2023 146,347 $ 1,463 $ 958,555 $ 644,490 $ 1,550 ( 12,444 ) $ ( 559,221 ) $ 1,046,837

Net income — — — 116,077 — — — 116,077

Amounts reclassified from accumulated other comprehensive income, net of tax — — — — ( 501 ) — — ( 501 )

Common stock issued under stock incentive plans 1,033 10 ( 10 ) — — — — —

Stock-based compensation expense — — 10,007 — — — — 10,007

Exercise of stock options — — 1,675 — — — — 1,675

Acquisition of treasury stock — — — — — ( 560 ) ( 42,369 ) ( 42,369 )

Balance, April 29, 2023 147,380 1,473 970,227 760,567 1,049 ( 13,004 ) ( 601,590 ) 1,131,726

Net income — — — 131,325 — — — 131,325

Common stock issued under stock incentive plans 2 — — — — — — —

Common stock issued under ESPP 61 1 3,254 — — — — 3,255

Stock-based compensation expense — — 9,624 — — — — 9,624

Exercise of stock options — — 261 — — — — 261

Acquisition of treasury stock — — — — — ( 719 ) ( 44,902 ) ( 44,902 )

Balance, July 29, 2023 147,443 1,474 983,366 891,892 1,049 ( 13,723 ) ( 646,492 ) 1,231,289

Balance, February 3, 2024 147,544 $ 1,475 $ 1,006,409 $ 1,168,231 $ 501 ( 14,776 ) $ ( 717,765 ) $ 1,458,851

Net income — — — 111,019 — — — 111,019

3 unchanged sentences

Acquisition of treasury stock — — — — — ( 763 ) ( 56,905 ) ( 56,905 )

Balance, October 28, 2023 147,470 $ 1,475 $ 993,178 $ 1,022,359 $ 1,049 ( 13,976 ) $ ( 664,365 ) $ 1,353,696

The accompanying notes are an integral part of the condensed consolidated financial statements.

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Amounts in thousands)

Balance, May 4, 2024 148,247 $ 1,482 $ 1,020,857 $ 1,279,250 $ 501 ( 15,539 ) $ ( 774,670 ) $ 1,527,420

Common Stock Additional

7 unchanged sentences

Net income — — — 116,077 — — — 116,077

Amounts reclassified from accumulated other comprehensive income, net of tax — — — — 117 — — 117

Unrealized gain on cash flow hedge, net of tax — — — — 588 — — 588

Other comprehensive loss, net of tax — — — — ( 501 ) — — ( 501 )

Common stock issued under stock incentive plans 1,033 10 ( 10 ) — — — — —

3 unchanged sentences

Balance, April 29, 2023 147,380 $ 1,473 $ 970,227 $ 760,567 $ 1,049 ( 13,004 ) $ ( 601,590 ) $ 1,131,726

Net income — — — 141,007 — — — 141,007

Common stock issued under stock incentive plans 172 2 ( 2 ) — — — — —

Common stock issued under ESPP 44 — 2,331 — — — — 2,331

Stock-based compensation expense — — 9,387 — — — — 9,387

Exercise of stock options — — 2,712 — — — — 2,712

Acquisition of treasury stock — — — — — ( 359 ) ( 23,188 ) ( 23,188 )

Balance, July 30, 2022 146,157 1,461 928,548 384,770 2,010 ( 11,105 ) ( 463,198 ) 853,591

Net income — — — 129,942 — — — 129,942

Common stock issued under stock incentive plans 86 — — — — — — —

Stock-based compensation expense — — 9,463 — — — — 9,463

Exercise of stock options — — 1,844 — — — — 1,844

Acquisition of treasury stock — — — — — ( 709 ) ( 51,965 ) ( 51,965 )

Balance, October 29, 2022 146,243 $ 1,461 $ 939,855 $ 514,712 $ 2,010 ( 11,814 ) $ ( 515,163 ) $ 942,875

The accompanying notes are an integral part of the condensed consolidated financial statements.

2 unchanged sentences

(Amounts in thousands)

Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

3 unchanged sentences

Amortization of debt issuance costs and accretion of original issue discount 277 324

Debt extinguishment charges 1,830 687

Stock-based compensation expense 8,590 10,007

2 unchanged sentences

Increase (decrease) in cash due to changes in:

Accounts receivable 15,205 ( 73,162 )

Accounts receivable, net 3,491 21,871

Merchandise inventories ( 78,488 ) ( 153,455 )

7 unchanged sentences

Additions to property and equipment, net of disposals ( 105,741 ) ( 92,084 )

Proceeds from sale-leaseback transactions 12,310 11,092

Acquisitions — ( 376,521 )

Net cash used in investing activities ( 105,741 ) ( 92,084 )

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 193,000 149,000

Payments on revolving lines of credit ( 242,000 ) ( 154,000 )

Debt issuance costs paid ( 1,722 ) ( 2,733 )

Net cash received from stock option exercises 5,865 1,675

Net cash received from ESPP 3,255 2,331

Acquisition of treasury stock ( 57,256 ) ( 42,369 )

1 unchanged sentence

Other financing activities ( 1,714 ) ( 986 )

Net cash (used in) provided by financing activities ( 109,254 ) 36,088

Net cash used in financing activities ( 96,061 ) ( 37,576 )

Net decrease in cash and cash equivalents ( 955 ) ( 10,528 )

7 unchanged sentences

Finance lease liabilities arising from obtaining right-of-use assets 345 —

Financing obligations arising from failed sale-leasebacks — 3,487

Property additions included in accrued expenses 35,456 24,754

5 unchanged sentences

and its wholly-owned subsidiaries is a leading operator of membership warehouse clubs concentrated primarily in the eastern half of the United States.

The Company provides a curated assortment focused on grocery, general merchandise, gasoline and other ancillary services, coupon books, and promotions to offer a differentiated shopping experience that is further enhanced by its omnichannel capabilities.

As of October 28, 2023, the Company operated 238 warehouse clubs and 169 gas stations in 20 states.

The Company provides a curated assortment focused on groceries, fresh foods, general merchandise, gasoline, and other ancillary services to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities.

Additionally, the Company provides access to coupon books and promotions to deliver further value to our members.

As of May 4, 2024, the Company operated 244 warehouse clubs and 175 gas stations in 20 states.

Summary of Significant Accounting Policies

2 unchanged sentences

are unaudited and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair statement of the Company’s financial statements in accordance with GAAP.

The condensed consolidated balance sheet as of January 28, 2023 is derived from the audited consolidated balance sheet as of that date.

The condensed consolidated balance sheet as of February 3, 2024 is derived from the audited consolidated balance sheet as of that date.

The Company’s business, as is common with the business of retailers generally, is subject to seasonal influences.

3 unchanged sentences

The Company follows the National Retail Federation’s fiscal calendar and reports financial information on a 52- or 53-week year ending on the Saturday closest to January 31.

The thirteen-week periods ended October 28, 2023 and October 29, 2022 are referred to herein as the "third quarter of fiscal year 2023" and the "third quarter of fiscal year 2022," respectively.

The thirty-nine week periods ended October 28, 2023 and October 29, 2022 are referred to herein as the "thirty-nine weeks ended October 28, 2023" and the "thirty-nine weeks ended October 29, 2022," respectively.

Operating results for the thirteen-week and thirty-nine week periods ended October 28, 2023 are not necessarily indicative of the results that may be expected for the 53-week fiscal year ending February 3, 2024.

The thirteen-week periods ended May 4, 2024 and April 29, 2023 are referred to herein as the "first quarter of fiscal year 2024" and the "first quarter of fiscal year 2023," respectively.

Operating results for the thirteen week period ended May 4, 2024 are not necessarily indicative of the results that may be expected for the 52-week fiscal year ending February 1, 2025.

1 unchanged sentence

There have been no material changes to these accounting policies and no accounting pronouncements adopted that had a material impact on the Company’s financial statements.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

ASU 2023-09 will require public companies to disclose, on an annual basis, a tabular reconciliation, using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the statutory tax, further broken out by nature and/or jurisdiction.

ASU 2023-09 requires all entities to disclose, on an annual basis, the amount of income taxes paid (net of refunds received), disaggregated between federal, state/local and foreign, and amounts paid to an individual jurisdiction when 5% or more of the total income taxes paid.

The new standard is effective for fiscal years beginning after December 15, 2024, on a prospective basis.

Early adoption and retrospective application are permitted.

The Company is currently evaluating the impact the adoption of this new pronouncement will have on its financial statement disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which expands the segment reporting disclosures and requires disclosure of segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, amounts and description of its composition for other segment items, and interim disclosure of a reportable segment’s profit or loss and assets.

Additionally, the amendments require the disclosure of the title and position of the CODM

and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance and deciding how to allocate resources.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis.

Early adoption is permitted.

The Company is currently evaluating the impact the adoption of this new pronouncement will have on its financial statement disclosures.

Revenue Recognition

(a) Performance Obligations

The Company identifies each distinct performance obligation to transfer goods (or bundle of goods) or services.

The Company recognizes revenue as it satisfies a performance obligation by transferring control of the goods or services to the customer.

The Company recognizes net sales at clubs and gas stations when the customer takes possession of the goods and tenders payment.

2 unchanged sentences

For e-commerce sales, the Company recognizes sales when control of the merchandise is transferred to the customer, which is typically at the time of shipment.

The following table summarizes the Company’s point-of-sale transactions at clubs and gas stations, excluding sales tax, as a percentage of both net sales and total revenues:

Thirteen Weeks Ended

Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Point-of-sale transactions, excluding sales tax, as a percent of net sales 92 % 92 % 91 % 92 %

Point-of-sale transactions, excluding sales tax, as a percent of total revenues 90 % 90 % 89 % 90 %

Rewards programs

5 unchanged sentences

Cash back is in the form of electronic awards issued to each member once $ 10 in rewards have been earned.

Earned rewards under the Club+ program do not expire.

The Company's co-branded credit card program is now the BJ's One and BJ's One+ program, which allows cardholders with the opportunity to earn up to 5 % cash back on purchases made in BJ's clubs or online at bjs.com and up to a 15 -cent per gallon discount on gasoline when paying with a BJ's One or BJ's One+ Mastercard at our BJ’s gas locations.

Cash back is in the form of electronic awards issued to each member monthly on their credit card statement date.

Earned rewards under these two programs do not expire.

Earned rewards under the co-branded credit card program do not expire.

The Company accounts for these transactions as multiple-element arrangements and allocates the transaction price to separate performance obligations using their relative fair values.

3 unchanged sentences

The Company recognizes royalty revenue related to the outstanding My BJ's Perks and BJ's One and BJ's One+ credit card programs based upon actual customer activities, such as reward redemptions.

Additionally, the Company deferred revenue for funds received related to marketing and other integration costs in connection with the new co-brand credit card program and will recognize these into revenue as performance obligations are satisfied.

Additionally, the Company deferred revenue for funds received related to marketing and other integration costs in connection with the new co-brand credit card program and will recognize these funds into revenue as performance obligations are satisfied.

The Company charges a membership fee to its customers, which allows customers to shop in the Company’s clubs, shop on the Company’s website, and purchase gasoline at the Company’s gas stations for the duration of the membership, which is generally 12 months.

In addition, members have access to other ancillary services, coupon books, and promotions.

In addition, members have access to other ancillary services, coupons, and promotions.

As the Company has the obligation to provide access to its clubs, website, and gas stations for the duration of the membership term, the Company recognizes membership fees on a straight-line basis over the life of the membership.

2 unchanged sentences

Revenue from gift card sales is recognized upon redemption of the gift cards and control of the purchased goods or services is transferred to the customer.

(b) Contract Balances

The following table summarizes the Company's deferred revenue balance related to outstanding performance obligations for contracts with customers:

October 28, 2023 January 28, 2023 October 29, 2022

Contract Balances

The following table summarizes the Company's deferred revenue balance related to outstanding performance obligations for contracts with customers (in thousands):

May 4, 2024 February 3, 2024 April 29, 2023

Rewards programs:

5 unchanged sentences

Gift card programs 14,484 15,290 13,140

E-commerce sales 5,723 6,757 8,620

Rewards programs:

2 unchanged sentences

Current and long-term deferred revenue balances are included within accrued expenses and other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.

The following table summarizes the Company's revenue recognized during the period that was included in the opening deferred balance as of January 28, 2023 :

Thirty-Nine Weeks Ended

October 28, 2023

The following table summarizes the Company's revenue recognized during the period that was included in the opening deferred balance as of February 3, 2024 and January 28, 2023 (in thousands) :

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Rewards programs:

5 unchanged sentences

Gift card programs 2,799 2,933

E-commerce sales 6,757 2,731

Total revenue $ 161,850 $ 145,188

Performance obligations related to earned award dollars, royalty revenue and membership fees are typically satisfied over a period of twelve months or less.

1 unchanged sentence

The timing and recognition of gift card redemptions varies depending on consumer behavior and spending patterns.

(d) Disaggregation of Revenue

Disaggregation of Revenue

The Company’s club retail operations, which include retail club and other sales procured from our clubs and distribution centers, represent substantially all of its consolidated total revenues and are the Company’s only reportable segment.

Company’s identifiable assets are in the United States.

Substantially all of the Company’s identifiable assets are located in the United States.

The Company does not have significant sales outside the United States, nor does any customer represent more than 10% of total revenues for any period presented.

The following table summarizes the Company’s percentage of net sales disaggregated by category:

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Grocery 71 % 71 %

3 unchanged sentences

The following table summarizes the Company’s debt (in thousands):

October 28, 2023 January 28, 2023 October 29, 2022

May 4, 2024 February 3, 2024 April 29, 2023

ABL Revolving Facility $ 270,000 $ 319,000 $ 400,000

8 unchanged sentences

Indebtedness under the ABL Revolving Facility is secured by substantially all of the assets (other than real estate) of the Company and its subsidiaries, subject to customary exceptions.

As amended, interest on the ABL Revolving Facility is calculated either at the SOFR plus a range of 100 to 125 basis points or a base rate plus 0 to 25 basis points, based on excess availability.

As amended, interest on the ABL Revolving Facility is calculated either at SOFR plus a range of 100 to 125 basis points or a base rate plus 0 to 25 basis points, based on excess availability.

The Company will also pay an unused commitment fee of 20 basis points per annum on the unused ABL Revolving Commitment.

1 unchanged sentence

The ABL Revolving Facility places certain restrictions (i.e., covenants) upon the Borrower’s, and its subsidiaries’, ability to, among other things, incur additional indebtedness, pay dividends and make certain loans, investments, and divestitures.

The ABL Revolving Facility contains customary events of default (including payment defaults, cross-defaults to certain of the Company's other indebtedness, breach of representations and covenants and change of control).

The ABL Revolving Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other indebtedness, breach of representations and covenants and change of control).

The occurrence of an event of default under the ABL Revolving Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Revolving Facility.

As of October 28, 2023, there was $ 434.0 million outstanding in loans under the ABL Revolving Facility and $ 12.3 million in outstanding letters of credit.

As of May 4, 2024, there was $ 270.0 million outstanding in loans under the ABL Revolving Facility and $ 18.4 million in outstanding letters of credit.

The interest rate on the ABL Revolving Facility was 6.41 % and unused capacity was $ 911.6 million.

As of February 3, 2024 and April 29, 2023, the interest rate on the ABL Revolving Facility was 6.44 % and 6.08 %, respectively.

First Lien Term Loan

4 unchanged sentences

and Wells Fargo Securities LLC acted as joint lead arrangers and joint bookrunners of the Fourth Amendment.

The Fourth Amendment, among other things, extends the maturity date with respect to the term loans outstanding under the First Lien Term Loan Credit Agreement from February 3, 2027 to February 3, 2029.

In addition, the Fourth Amendment reduces applicable margin in respect of the interest rate, effective immediately, from SOFR plus 275 basis points per annum to SOFR plus 200 basis points per annum.

The Fourth Amendment, among other things, extended the maturity date with respect to the term loans outstanding under the First Lien Term Loan Credit Agreement from February 3, 2027 to February 3, 2029.

In addition, the Fourth Amendment reduced applicable margin in respect of the interest rate from SOFR plus 275 basis points per annum to SOFR plus 200 basis points per annum.

Voluntary prepayments are permitted.

Principal payments must be made on the First Lien Term Loan pursuant to an annual excess cash flow calculation when the net leverage ratio exceeds 3.50 to 1.00.

As of October 28, 2023, the Company's net leverage ratio did not exceed 3.50 to 1.00, and therefore, no incremental principal payments were required.

The First Lien Term Loan is subject to certain affirmative and negative covenants but no financial covenants.

As of May 4, 2024, the Company's net leverage ratio did not exceed 3.50 to 1.00, and therefore, no incremental principal payments were required.

The First Lien Term Loan is subject to certain affirmative and negative covenants.

It is secured on a senior basis by certain "fixed assets" of the Company and on a junior basis by certain "liquid" assets of the Company.

Total fees incurred in connection with the refinancing were approximately $ 1.7 million.

The Company expensed $ 1.4 million of previously capitalized debt issuance costs and original issue discount and expensed $ 0.4 million of new third-party fees.

The Company deferred $ 1.3 million of new debt issuance costs.

As of October 28, 2023, there was $ 400.0 million outstanding under the First Lien Term Loan, which reflects the Company's repayment of $ 50.0 million of the principal amount outstanding under the First Lien Term Credit Agreement during the third quarter of fiscal year 2023 prior to the Fourth Amendment.

There was $ 450.0 million outstanding on the First Lien Term Loan at January 28, 2023 and $ 601.9 million outstanding at October 29, 2022.

The interest rates were 7.35 %, 7.11 %, and 5.35 % at October 28, 2023, January 28, 2023, and October 29, 2022, respectively.

There was $ 400.0 million, $ 400.0 million, and $ 450.0 million outstanding under the First Lien Term Loan as of May 4, 2024, February 3, 2024, and April 29, 2023, respectively.

The interest rate on the First Lien Term Loan was 7.32 %, 7.33 %, and 7.58 % at May 4, 2024, February 3, 2024, and April 29, 2023, respectively.

Commitments and Contingencies

6 unchanged sentences

The 2018 Plan provides for the grant of stock options, restricted stock, dividend equivalents, stock payments, restricted stock units, performance shares, other incentive awards, stock appreciation rights, and cash awards.

Prior to the adoption of the 2018 Plan, the Company granted stock-based compensation to employees and non-employee directors under the Fourth Amended and Restated 2011 Stock Option Plan of BJ’s Wholesale Club, Inc.

(f/k/a Beacon Holding Inc.), as amended (the "2011 Plan") and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc.

(f/k/a Beacon Holding, Inc.), as amended (the "2012 Director Plan").

No further grants will be made under the 2011 Plan or the 2012 Director Plan.

The 2018 Plan authorizes the issuance of 13,148,058 shares, including 985,369 shares that were reserved but not issued under the 2011 Plan and the 2012 Director Plan.

If an award under the 2018 Plan, the 2011 Plan, or the 2012 Director Plan is forfeited, expires, or is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration, or cash settlement, be used again for new grants under the 2018 Plan.

Additionally, shares tendered or withheld to satisfy grant or exercise price, or tax withholding obligations associated with an award under the 2018 Plan, the 2011 Plan, or the 2012 Director Plan will be added to the shares authorized for grant under the 2018 Plan.

The 2018 Plan authorizes the issuance of 13,148,058 shares.

If an award under the 2018 Plan is forfeited, expires, or is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration, or cash settlement, be used again for new grants under the 2018 Plan.

Additionally, shares tendered or withheld to satisfy grant or exercise price, or tax withholding obligations associated with an award under the 2018 Plan will be added to the shares authorized for grant under the 2018 Plan.

The following shares may not be used again for grant under the 2018 Plan:

(1) shares subject to a stock appreciation right ("SAR") that are not issued in connection with the stock settlement of the SAR upon its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan, or 2012 Director Plan.

As of October 28, 2023, there were 4,932,865 shares available for future issuance under the 2018 Plan.

The following table summarizes the Company’s stock award activity during the thirty-nine weeks ended October 28, 2023 (shares in thousands):

As of May 4, 2024, there were 4,519,493 shares available for future issuance under the 2018 Plan.

The following table summarizes the Company’s stock award activity during the thirteen weeks ended May 4, 2024 (shares in thousands):

Stock Options Restricted Stock Restricted Stock Units Performance Stock

2 unchanged sentences

Value Shares Weighted-

Outstanding, January 28, 2023 1,788 $ 20.35 750 $ 50.10 24 $ 58.61 854 $ 45.70

Value Shares (a)

Outstanding, February 3, 2024 1,655 $ 20.53 621 $ 67.35 22 $ 62.13 677 $ 58.84

— — — — 358 74.65 425 76.65

1 unchanged sentence

Exercised/vested ( 258 ) 22.74 ( 305 ) 61.65 — — ( 458 ) 44.31

Outstanding, October 28, 2023 1,662 $ 20.47 618 $ 67.28 22 $ 62.13 677 $ 58.84

(a) Includes 320 incremental Performance Stock awards granted in fiscal year 2020 with a weighted-average grant date fair value of $ 24.35 , that vested in fiscal year 2023 at greater than 100 % of target based on performance.

Stock-based compensation expense was $ 9.4 million and $ 9.5 million for the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively, and $ 29.0 million and $ 28.0 million for the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.

Outstanding, May 4, 2024 1,397 $ 20.13 305 $ 72.86 379 $ 73.93 637 $ 69.44

(a) Shares presented reflect a 100 % payout, however, the actual payout for the remaining performance stock awards granted in fiscal year 2021 is expected to be 200 %.

Actual payout for the performance stock awards granted in each of fiscal year 2022 and 2023, which vest in fiscal year 2025 and 2026, respectively, could be below 100 % or up to 200 %.

Actual payout for the performance stock awards granted in fiscal year 2024, which vest in fiscal year 2027, could be below 100 % or up to 300 %.

(b) Includes 229 incremental performance stock awards granted in fiscal year 2021 with a weighted-average grant date fair value of $ 44.31 , that vested in fiscal year 2024 at greater than 100 % of target payout based on performance.

Stock-based compensation expense was $ 8.6 million and $ 10.0 million for the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively.

On June 14, 2018, the Company’s board of directors adopted, and its stockholders approved, the ESPP, which became effective July 1, 2018.

The aggregate number of shares of common stock that were to be reserved for issuance under the ESPP was to be equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5 % of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the Company's board of directors.

The amount of expense recognized related to the ESPP was $ 0.4 million and $ 0.3 million for the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively, and $ 1.1 million and $ 0.8 million for the thirty-nine weeks ended October 28, 2023 and October 29, 2022, respectively.

As of October 28, 2023, there were 2,463,889 shares available for issuance under the ESPP.

The aggregate number of shares of common stock reserved for issuance under the ESPP is equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5 % of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the Company's board of directors.

The amount of expense recognized related to the ESPP was $ 0.4 million and $ 0.3 million for the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively.

As of May 4, 2024, there were 2,894,011 shares available for issuance under the ESPP.

Treasury Shares and Share Repurchase Program

Treasury Shares Acquired on Restricted Stock and Performance Stock Awards

The Company acquired 11,052 shares to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended October 28, 2023, which was recorded as $ 0.8 million of treasury stock.

The Company acquired 24,885 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended October 29, 2022, which was recorded as $ 1.9 million of treasury stock.

The Company acquired 370,879 shares to satisfy employees’ tax withholding obligations upon the vesting of restricted stock and performance stock awards in the thirty-nine weeks ended October 28, 2023, which was recorded as $ 28.1 million of treasury stock.

The Company acquired 260,730 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the thirty-nine weeks ended October 29, 2022, which was recorded as $ 17.8 million of treasury stock.

The Company acquired 357,451 shares to satisfy employees’ tax withholding obligations upon the vesting of restricted stock and performance stock awards in the thirteen weeks ended May 4, 2024, which was recorded as $ 26.7 million of treasury stock.

The Company acquired 356,202 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock and performance stock awards in the thirteen weeks ended April 29, 2023, which was recorded as $ 27.1 million of treasury stock.

Share Repurchase Program

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The Company initiated the 2021 Repurchase Program to mitigate potentially dilutive effects of stock awards granted by the Company, in addition to enhancing shareholder value.

The Company repurchased 242,000 shares for $ 17.1 million and 684,819 shares for $ 50.1 million during the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively.

The Company repurchased 1,161,162 shares for $ 77.0 million and 1,608,325 shares for $ 108.7 million during the thirty-nine weeks ended October 28, 2023 and October 29, 2022,

respectively.

The Company repurchased 405,110 shares for $ 30.2 million and 204,040 shares for $ 15.3 million during the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively.

The Company accounts for treasury stock under the cost method based on the fair market value of the shares on the dates of repurchase plus any direct costs incurred.

As of October 28, 2023, $ 241.9 million remained available to purchase under the 2021 Repurchase Program.

As of May 4, 2024, $ 159.1 million remained available to purchase under the 2021 Repurchase Program.

The Company projects the estimated annual effective tax rate for fiscal year 2024 to be 27.9 %, excluding the tax effect of discrete events, such as excess tax benefits from stock-based compensation, changes in tax legislation, settlements of tax audits and changes in uncertain tax positions, among others.

The Company’s effective income tax rate from continuing operations was 28.1 % and 26.8 % for the thirteen weeks ended October 28, 2023 and October 29, 2022, respectively.

For the thirty-nine weeks ended October 28, 2023 and October 29, 2022, the Company's effective tax rate from continuing operations was and 29.7 % and 25.1 %, respectively.

The increase for both comparative periods was primarily driven by lower tax benefits from stock-based compensation.

The increase for the first nine months of fiscal 2023 was also due to an immaterial adjustment to certain deferred tax assets related to prior periods.

The Company’s effective income tax rate from continuing operations was 24.4 % and 32.6 % for the thirteen weeks ended May 4, 2024 and April 29, 2023, respectively.

The decrease in income tax expense is primarily driven by higher tax benefits from stock-based compensation.

The Company is subject to taxation in the U.S.

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As such, the estimated fair value of long-term debt is classified within Level 2, as defined under U.S.

The gross carrying amount and fair value of the Company’s debt at October 28, 2023 are as follows (in thousands):

The gross carrying amount and fair value of the Company’s debt at May 4, 2024 are as follows (in thousands):

Carrying Amount Fair Value

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Total Debt $ 670,000 $ 672,000

The gross carrying amount and fair value of the Company’s debt at January 28, 2023 are as follows (in thousands):

The gross carrying amount and fair value of the Company’s debt at February 3, 2024 are as follows (in thousands):

Carrying Amount Fair Value

2 unchanged sentences

Total Debt $ 719,000 $ 720,168

The gross carrying amount and fair value of the Company’s debt at October 29, 2022 are as follows (in thousands):

The gross carrying amount and fair value of the Company’s debt at April 29, 2023 are as follows (in thousands):

Carrying Amount Fair Value

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Earnings Per Share

The table below reconciles basic weighted-average shares of common stock outstanding to diluted weighted-average shares of common stock outstanding for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022 (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

The table below reconciles basic weighted-average shares of common stock outstanding to diluted weighted-average shares of common stock outstanding for the thirteen weeks ended May 4, 2024 and April 29, 2023 (in thousands):

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Weighted-average shares of common stock outstanding, used for basic computation 132,397 133,312

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Weighted-average shares of common stock and dilutive potential shares of common stock outstanding 134,111 135,902

The table below summarizes awards that were excluded from the computation of diluted earnings for the thirteen and thirty-nine weeks ended October 28, 2023 and October 29, 2022, as their inclusion would have been anti-dilutive (in thousands):

Thirteen Weeks Ended Thirty-Nine Weeks Ended

October 28, 2023 October 29, 2022 October 28, 2023 October 29, 2022

The table below summarizes awards that were excluded from the computation of diluted earnings for the thirteen weeks ended May 4, 2024 and April 29, 2023, as their inclusion would have been anti-dilutive (in thousands):

Thirteen Weeks Ended

May 4, 2024 April 29, 2023

Stock-based awards 328 103

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This Quarterly Report on Form 10-Q contains forward-looking statements.

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 (the "Exchange Act").

All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q should be considered forward-looking statements, including, without limitation, statements regarding our future results of operations and financial position, business strategy, transformation, strategic priorities and future progress, including expectations regarding deferred revenue, lease commencement dates, impact of infrastructure investments on our operating model and selling, general and administrative expenses, sales of gasoline and gross profit margin rates, and new club and gas station openings, as well as statements that include terms such as "may", "will", "should", "expect", "plan", "anticipate", "could", "intend", "project", "believe", "estimate", "predict", "continue", "forecast", "would", or the negative of these terms or other similar expressions.

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 (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act").

All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q should be considered forward-looking statements, including, without limitation, statements regarding our future results of operations and financial position, business strategy, transformation, strategic priorities and future progress, including expectations regarding deferred revenue, lease commencement dates, impact of infrastructure investments on our operating model and selling, general and administrative expenses, sales of gasoline and gross profit margin rates, share repurchases, and new club and gas station openings, as well as statements that include terms such as "may", "will", "should", "expect", "plan", "anticipate", "could", "intend", "project", "believe", "estimate", "predict", "continue", "forecast", "would", or the negative of these terms or other similar expressions.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions.

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• changes in laws related to, or the governments administration of, the Supplemental Nutrition Assistance Program or its electronic benefit transfer systems;

• the risks and uncertainties related to the impact of any future pandemic, epidemic or outbreak of any other highly infectious disease;

• the risks and uncertainties related to the impact of any future pandemic, epidemic or outbreak of any other highly infectious disease on the U.S., regional and global economies and on our business, financial condition and results of operations;

• risks related to climate change and natural disasters;

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• risks relating to our ability to implement our growth strategy by opening new clubs, and gasoline stations;

• the other risk factors identified in our filings with the Securities and Exchange Commission, including in particular those set forth under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended January 28, 2023 (the "Annual Report on Form 10-K for the fiscal year 2022") and our other filings with the Securities and Exchange Commission.

• the other risk factors identified in our filings with the Securities and Exchange Commission, including in particular those set forth under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended February 3, 2024 (the "Annual Report on Form 10-K for the fiscal year 2023") and our other filings with the Securities and Exchange Commission.

Given these uncertainties, you should not place undue reliance on any forward-looking statements.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements