BJ’s Wholesale Club Holdings Announces Third Quarter Fiscal 2022 Results

MARLBOROUGH, Mass.–(BUSINESS WIRE)–BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ)  today announced its financial results for the thirteen and thirty-nine weeks ended October 29, 2022. 

“We reported another quarter of strong results, demonstrating the power of our business model,” said Bob Eddy, President and Chief Executive Officer, BJ’s Wholesale Club. “Our consistent focus on delivering value to our members at a time when they need it most will bolster our business for the future. Our member base is growing in both size and quality. We are improving our merchandising to deliver amazing value. We are offering more convenience for our members through a great digital experience. We are expanding our footprint into new and existing markets. We have a great team and a competitive strategy, and the investments we continue to make in our Company position us well for long-term growth and sustainable value creation.”

Key Measures for the Thirteen Weeks Ended October 29, 2022 (Third Quarter Fiscal 2022) and for the Thirty-Nine Weeks Ended October 29, 2022 (Year-to-date Fiscal 2022):

BJ’S WHOLESALE CLUB HOLDINGS, INC.

(Amounts in thousands, except per share amounts)

13 Weeks Ended
October 29, 2022

13 Weeks Ended
October 30, 2021

%
Growth

39 Weeks Ended
October 29, 2022

39 Weeks Ended
October 30, 2021

%
Growth

Net sales

$

4,685,834

$

4,172,594

12.3

%

$

14,090,673

$

12,042,830

17.0

%

Membership fee income

99,485

91,493

8.7

%

294,897

266,634

10.6

%

Total revenues

4,785,319

4,264,087

12.2

%

14,385,570

12,309,464

16.9

%

Operating income

191,968

170,156

12.8

%

545,193

460,194

18.5

%

Income from continuing operations

131,394

126,602

3.8

%

384,862

319,185

20.6

%

Adjusted EBITDA (a)

272,305

228,399

19.2

%

766,804

650,949

17.8

%

Net income

129,942

126,517

2.7

%

383,396

319,084

20.2

%

EPS (b)

0.95

0.92

3.3

%

2.81

2.31

21.6

%

Adjusted net income (a)

135,830

125,935

7.9

%

398,550

338,954

17.6

%

Adjusted EPS (a)

0.99

0.91

8.8

%

2.92

2.45

19.2

%

Basic weighted average shares outstanding

134,091

135,582

(1.1

) %

134,225

135,604

(1.0

) %

Diluted weighted average shares outstanding

136,621

138,005

(1.0

) %

136,630

138,288

(1.2

) %

 (a)

See “Note Regarding Non-GAAP Financial Information.”

 (b)

EPS represents earnings per diluted share.

Additional Highlights:

  • Total comparable club sales increased by 9.7% in the third quarter of fiscal 2022 compared to the third quarter of fiscal 2021. Excluding the impact of gasoline sales, comparable club sales increased by 5.3% in the third quarter of fiscal 2022 compared to the same period in fiscal 2021. Total year-to-date comparable club sales increased by 14.6% in fiscal 2022 compared to fiscal 2021. Excluding the impact of gasoline sales, year-to-date comparable club sales increased by 5.7% in fiscal 2022 compared to fiscal 2021.
  • Gross profit increased to $877.1 million in the third quarter of fiscal 2022 from $791.2 million in the third quarter of fiscal 2021. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 30 basis points over the same quarter of fiscal 2021. Gross profit increased to $2,528.3 million year-to-date in fiscal 2022 from $2,281.5 million in fiscal 2021. Merchandise gross margin rate decreased 40 basis points year-to-date in fiscal 2022 compared to fiscal 2021. The quarter-to-date merchandise margins were impacted by increased supply chain costs and investments in inflationary categories. On a year-to-date basis, merchandise margins were impacted by increased supply chain costs as well as investments in inflationary categories and markdowns in general merchandise inventory.
  • Selling, general and administrative expenses (“SG&A”) increased to $674.4 million in the third quarter of fiscal 2022 compared to $618.0 million in the third quarter of fiscal 2021. SG&A increased to $1,961.6 million year-to-date in fiscal 2022 compared to $1,816.0 million in fiscal 2021. The quarter-to-date increase was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings, as well as incremental costs related to the transition of the Company’s new home office. The year-to-date increase was driven by increased labor costs as a result of last year’s wage investments as well as the acquisition and integration expenses related to the acquisition of assets from Burris Logistics.
  • Operating income increased to $192.0 million, or 4.0% of total revenues, in the third quarter of fiscal 2022 compared to $170.2 million, or 4.0% of total revenues, in the third quarter of fiscal 2021. Operating income increased to $545.2 million, or 3.8% of total revenues, year-to-date in fiscal 2022 compared to $460.2 million, or 3.7% of total revenues, year-to-date in fiscal 2021.
  • Adjusted EBITDA increased 19.2% to $272.3 million in the third quarter of fiscal 2022 compared to $228.4 million in the third quarter of fiscal 2021. Adjusted EBITDA increased 17.8% to $766.8 million year-to-date in fiscal 2022 compared to $650.9 million year-to-date in fiscal 2021.
  • Income tax expense increased to $48.1 million in the third quarter of fiscal 2022 compared to $31.7 million in the third quarter of fiscal 2021. Income tax expense increased to $129.2 million year-to-date in fiscal 2022 compared to $93.4 million year-to-date in fiscal 2021. For both periods, this increase was primarily due to higher operating income year-over-year and lower excess tax benefits.
  • Inventory increased to $1.50 billion at the end of the third quarter of fiscal 2022 from $1.26 billion in the same quarter in fiscal 2021. Inventory balances at the end of the third quarter of fiscal 2022 include $96.3 million of perishable inventory related to the acquisition of four distribution centers and related private transportation fleet from Burris Logistics earlier in the year.
  • The Company reduced outstanding debt in the third quarter of fiscal 2022 by $154.3 million from the second quarter of fiscal 2022, maintaining a net debt to last twelve month adjusted EBITDA ratio of 0.9x.
  • Under its existing share repurchase program, the Company repurchased 684,819 shares of common stock, totaling $50.1 million in the third quarter of fiscal 2022. Year-to-date in fiscal 2022, the Company repurchased 1,608,325 shares of common stock, totaling $108.7 million, under such program.

Fiscal 2022 Ending January 28, 2023 Outlook

“We are optimistic about the outlook on our business given the sustained strength in our grocery business and our gains in market share,” said Laura Felice, Executive Vice President, Chief Financial Officer, BJ’s Wholesale Club. “We now expect fiscal year 2022 comparable club sales growth, excluding the impact of gasoline sales, to be in the 5.0% to 5.5% range. While we expect continued merchandise margin rate pressure, we also now expect fiscal year 2022 EPS to be in the $3.70 to $3.80 range. We remain confident that the strength of our core business and our intense focus on delivering value will continue to drive long-term growth.”

About BJ’s Wholesale Club Holdings, Inc.

Headquartered in Marlborough, Massachusetts, BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) is a leading operator of membership warehouse clubs in the Eastern United States focused on delivering significant value to its members. The Company provides a curated assortment of grocery, general merchandise, gasoline and other ancillary services to offer a differentiated shopping experience that is further enhanced by its omnichannel capabilities. Since pioneering the warehouse club model in New England in 1984, the Company currently operates 233 clubs and 163 BJ’s Gas® locations in 18 states. For more information, please visit us at www.bjs.com or on FacebookTwitter or Instagram.