BJ’s Wholesale Club Holdings, Inc. Announces First Quarter Fiscal 2023 Results

First Quarter Fiscal 2023 Highlights

• Comparable club sales, excluding gasoline sales, increased by 5.7 percent year-over-year

• Digitally enabled comparable sales growth was 19 percent year-over-year

• Membership fee income increased by 6.1 percent year-over-year to $102.5 million

• Merchandise gross margin rate increased 100 basis points year-over-year

• Earnings per diluted share and adjusted earnings per diluted share of $0.85

• Income from continuing operations increased by 3.1 percent year-over-year to $116 million

• Adjusted EBITDA increased by 16.4 percent year-over-year to $257 million

• The Company opened two new clubs and three new gas stations

• The Company successfully launched its co-branded credit card with Capital One

BJ’s Wholesale Club Holdings, Inc. (NYSE: BJ) (the “Company”) today announced its financial results for the thirteen weeks ended April 29, 2023.

“We reported a record first quarter in net income and adjusted EBITDA, demonstrating the power of our business model and the warehouse club channel,” said Bob Eddy, President and Chief Executive Officer, BJ’s Wholesale Club. “We drove topline growth bolstered by robust traffic and share gains. We also made significant improvements on our merchandise margins largely due to waning supply chain pressures and moderating inflation. We remain focused on our strategic priorities and believe that we are well-positioned to maximize long-term shareholder value.”

Key Measures for the Thirteen Weeks Ended April 29, 2023 (First Quarter Fiscal 2023):

Additional Highlights:

• Total comparable club sales increased by 2 percent in the first quarter of fiscal 2023 compared to the first quarter of fiscal 2022. Excluding the impact of gasoline sales, comparable club sales increased by 5.7 percent in the first quarter of fiscal 2023 compared to the same period in fiscal 2022.

• Gross profit increased to $880 million in the first quarter of fiscal 2023 from $790.6 million in the first quarter of fiscal 2022. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased 100 basis points over the same quarter of fiscal 2022. Merchandise margins were impacted by inflation, moderated supply chain costs and improved inventory management.

• Selling, general and administrative expenses (“SG&A”) increased to $689.3 million in the first quarter of fiscal 2023 compared to $635.4 million in the first quarter of fiscal 2022. The increase was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings in addition to other investments to drive strategic priorities.

• Operating income increased to $186.8 million or 4 percent of total revenues, in the first quarter of fiscal 2023 compared to $150.3 million or 3.3 percent of total revenues, in the first quarter of fiscal 2022.

• Income from continuing operations before income taxes increased to $172.1 million in the first quarter of fiscal 2023 compared to $142.5 million in the first quarter of fiscal 2022.

• The effective tax rate increased to 32.6 percent in the first quarter of fiscal 2023 compared to 21.1 percent in the first quarter of fiscal 2022. Income tax expense increased to $56.1 million in the first quarter of fiscal 2023 compared to $30 million in the first quarter of fiscal 2022, as a result of higher taxable income as well as a $21.6 million unexpected tax expense, approximately half of which should have been applied in prior periods in immaterial amounts.

• Net income increased to $116.1 million in the first quarter of fiscal 2023 compared to $112.5 million in the first quarter of fiscal 2022.

• Adjusted EBITDA increased 16.4 percent to $257 million in the first quarter of fiscal 2023 compared to $220.8 million in the first quarter of fiscal 2022.

• Inventory increased $69.9 million to $1.53 billion at the end of the first quarter of fiscal 2023. Inventory balances at the end of the first quarter of fiscal 2023 include $147.4 million of perishable inventory related to the acquisition of four distribution centers and related private transportation fleet from Burris Logistics in Q2 of fiscal 2022. Excluding inventory in our perishable distribution centers, inventory balances declined $77.5 million from Q1 fiscal 2022 to Q1 fiscal 2023.

• Under its existing share repurchase program, the Company repurchased 204,040 shares of common stock, totaling $15.3 million in the first quarter of fiscal 2023.

• The Company launched its new credit card program with Capital One and Mastercard on February 27, 2023, officially named the BJ’s One Mastercard® program. We believe this program will provide a first-class rewards and customer service experience, delivering more value back to its members. The program will offer up to 5 percent rewards on in-club earnings and up to 2 percent rewards on out-of-club earnings as well as up to 15 cents off/gallon at BJ’s Gas.

Fiscal 2023 Ending February 3, 2024 Outlook

“Our fiscal 2023 outlook on our business remains unchanged 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 are confident that the strength of our core business and our intense focus on delivering value will continue to drive long-term growth.”

Conference Call Details

A conference call to discuss the first quarter of fiscal 2023 financial results is scheduled for today, May 23, 2023, at 8:00 A.M. Eastern Time. The live audio webcast of the call can be accessed under the “Events & Presentations” section of the Company’s investor relations website and will remain available for one year. Participants may also dial (833) 470-1428 within the U.S. or (929) 526-1599 outside the U.S. and reference conference ID 230611. A telephonic replay will be available two hours after the conclusion of the call for one week and can be accessed by dialing (929) 458-6194 or (866) 813-9403 and referencing conference ID 817043.