Delaware | 45-2936287 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
25 Research Drive Westborough, Massachusetts | 01581 | |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.01 | BJ | New York Stock Exchange |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |
Non-accelerated filer | ☒ | Smaller reporting company | ☐ | |
Emerging growth Company | ☐ |
Page | ||
PART I. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
• | “the Company,” “BJ’s,” “we,” “us” and “our” mean BJ’s Wholesale Club Holdings, Inc. and, unless the context otherwise requires, its consolidated subsidiaries; |
• | "fiscal year 2018" means the 52 weeks ended February 2, 2019; |
• | "fiscal year 2019" means the 52 weeks ended February 1, 2020; and |
• | “Sponsors” means investment funds affiliated with or advised by CVC Capital Partners and Leonard Green & Partners, L.P. |
August 3, 2019 | February 2, 2019 | August 4, 2018 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 29,092 | $ | 27,146 | $ | 31,305 | |||||
Accounts receivable, net | 162,278 | 194,300 | 165,347 | ||||||||
Merchandise inventories | 1,026,541 | 1,052,306 | 1,005,045 | ||||||||
Prepaid expenses and other current assets | 47,353 | 63,454 | 107,345 | ||||||||
Total current assets | 1,265,264 | 1,337,206 | 1,309,042 | ||||||||
Operating lease right-of-use assets, net | 2,040,834 | — | — | ||||||||
Property and equipment: | |||||||||||
Land and buildings | 388,399 | 390,243 | 396,349 | ||||||||
Leasehold costs and improvements | 208,978 | 203,394 | 195,455 | ||||||||
Furniture, fixtures and equipment | 1,096,179 | 1,039,360 | 982,117 | ||||||||
Construction in progress | 31,685 | 23,749 | 16,538 | ||||||||
1,725,241 | 1,656,746 | 1,590,459 | |||||||||
Less: accumulated depreciation and amortization | (974,525 | ) | (907,968 | ) | (842,778 | ) | |||||
Total property and equipment, net | 750,716 | 748,778 | 747,681 | ||||||||
Goodwill | 924,134 | 924,134 | 924,134 | ||||||||
Intangibles, net | 153,730 | 200,870 | 212,561 | ||||||||
Other assets | 17,409 | 28,297 | 27,438 | ||||||||
Total assets | $ | 5,152,087 | $ | 3,239,285 | $ | 3,220,856 | |||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Current portion of long-term debt | $ | 195,377 | $ | 254,377 | $ | 62,250 | |||||
Current portion of operating lease liabilities | 118,035 | — | — | ||||||||
Accounts payable | 798,504 | 816,880 | 783,108 | ||||||||
Accrued expenses and other current liabilities | 499,149 | 506,431 | 475,622 | ||||||||
Total current liabilities | 1,611,065 | 1,577,688 | 1,320,980 | ||||||||
Long-term operating lease liabilities | 1,957,934 | — | — | ||||||||
Long-term debt | 1,540,602 | 1,546,471 | 1,894,071 | ||||||||
Deferred income taxes | 46,508 | 36,937 | 52,988 | ||||||||
Other non-current liabilities | 160,564 | 280,273 | 270,690 | ||||||||
Commitments and Contingencies (see Note 8) | |||||||||||
STOCKHOLDERS’ DEFICIT | |||||||||||
Common stock, par value $0.01; 305,000 shares authorized, 140,185 shares issued and 136,762 outstanding at August 3, 2019; 138,099 shares issued and 137,317 outstanding at February 2, 2019; and 136,195 shares issued and 135,413 outstanding at August 4, 2018 | 1,402 | 1,381 | 1,362 | ||||||||
Additional paid-in capital | 760,191 | 742,072 | 731,324 | ||||||||
Accumulated deficit | (813,223 | ) | (915,113 | ) | (1,033,851 | ) | |||||
Accumulated other comprehensive income (loss) | (26,610 | ) | (11,315 | ) | 2,401 | ||||||
Treasury stock, at cost, 3,423 shares at August 3, 2019; and 782 shares at February 2, 2019 and August 4, 2018 | (86,346 | ) | (19,109 | ) | (19,109 | ) | |||||
Total stockholders’ deficit | (164,586 | ) | (202,084 | ) | (317,873 | ) | |||||
Total liabilities and stockholders’ deficit | $ | 5,152,087 | $ | 3,239,285 | $ | 3,220,856 |
Thirteen Weeks Ended | |||||||
August 3, 2019 | August 4, 2018 | ||||||
Net sales | $ | 3,271,145 | $ | 3,236,664 | |||
Membership fee income | 74,697 | 70,441 | |||||
Total revenues | 3,345,842 | 3,307,105 | |||||
Cost of sales | 2,733,085 | 2,718,602 | |||||
Selling, general and administrative expenses | 511,889 | 549,188 | |||||
Preopening expense | 2,127 | 641 | |||||
Operating income | 98,741 | 38,674 | |||||
Interest expense, net | 26,783 | 59,555 | |||||
Income (loss) from continuing operations before income taxes | 71,958 | (20,881 | ) | ||||
Provision (benefit) for income taxes | 17,665 | (15,391 | ) | ||||
Income (loss) from continuing operations | 54,293 | (5,490 | ) | ||||
Income (loss) from discontinued operations, net of income taxes | 230 | (124 | ) | ||||
Net income (loss) | $ | 54,523 | $ | (5,614 | ) | ||
Income (loss) per share attributable to common stockholders—basic: | |||||||
Income (loss) from continuing operations | $ | 0.40 | $ | (0.05 | ) | ||
Income (loss) from discontinued operations | — | — | |||||
Net income (loss) | $ | 0.40 | $ | (0.05 | ) | ||
Income (loss) per share attributable to common stockholders—diluted: | |||||||
Income (loss) from continuing operations | $ | 0.39 | $ | (0.05 | ) | ||
Income (loss) from discontinued operations | — | — | |||||
Net income (loss) | $ | 0.39 | $ | (0.05 | ) | ||
Weighted average number of common shares outstanding: | |||||||
Basic | 136,571 | 106,915 | |||||
Diluted | 139,516 | 106,915 | |||||
Other comprehensive income (loss): | |||||||
Unrealized loss on cash flow hedge, net of income tax of $4,488 | $ | (11,540 | ) | $ | — | ||
Total other comprehensive loss | $ | (11,540 | ) | $ | — | ||
Total comprehensive income (loss) | $ | 42,983 | $ | (5,614 | ) |
Twenty-Six Weeks Ended | |||||||
August 3, 2019 | August 4, 2018 | ||||||
Net sales | $ | 6,340,908 | $ | 6,230,406 | |||
Membership fee income | 148,070 | 138,396 | |||||
Total revenues | 6,488,978 | 6,368,802 | |||||
Cost of sales | 5,302,062 | 5,228,940 | |||||
Selling, general and administrative expenses | 1,013,070 | 1,034,760 | |||||
Preopening expense | 4,423 | 1,858 | |||||
Operating income | 169,423 | 103,244 | |||||
Interest expense, net | 54,572 | 104,758 | |||||
Income (loss) from continuing operations before income taxes | 114,851 | (1,514 | ) | ||||
Provision (benefit) for income taxes | 24,473 | (10,325 | ) | ||||
Income from continuing operations | 90,378 | 8,811 | |||||
Loss from discontinued operations, net of income taxes | (57 | ) | (288 | ) | |||
Net income | $ | 90,321 | $ | 8,523 | |||
Income per share attributable to common stockholders—basic: | |||||||
Income from continuing operations | $ | 0.66 | $ | 0.09 | |||
Loss from discontinued operations | — | — | |||||
Net income | $ | 0.66 | $ | 0.09 | |||
Income per share attributable to common stockholders—diluted: | |||||||
Income from continuing operations | $ | 0.65 | $ | 0.09 | |||
Loss from discontinued operations | — | — | |||||
Net income | $ | 0.65 | $ | 0.09 | |||
Weighted average number of common shares outstanding: | |||||||
Basic | 136,690 | 97,734 | |||||
Diluted | 139,989 | 102,732 | |||||
Other comprehensive income (loss): | |||||||
Unrealized loss on cash flow hedge, net of income tax of $5,948 | $ | (15,295 | ) | $ | — | ||
Total other comprehensive loss | $ | (15,295 | ) | $ | — | ||
Total comprehensive income | $ | 75,026 | $ | 8,523 |
Contingently Redeemable Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (loss) | Treasury Stock | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
Balance, February 2, 2019 | — | $ | — | 138,099 | $ | 1,381 | $ | 742,072 | $ | (915,113 | ) | $ | (11,315 | ) | (782 | ) | $ | (19,109 | ) | $ | (202,084 | ) | |||||||||||||||
Net income | — | — | — | — | — | 35,798 | — | — | — | 35,798 | |||||||||||||||||||||||||||
Unrealized loss on cash flow hedge, net of tax | — | — | — | — | — | — | (3,755 | ) | — | — | (3,755 | ) | |||||||||||||||||||||||||
Common stock issued under stock incentive plans | — | — | 1,737 | 17 | (17 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 3,844 | — | — | — | — | 3,844 | |||||||||||||||||||||||||||
Net cash received on option exercises | — | — | — | — | 6,319 | — | — | — | — | 6,319 | |||||||||||||||||||||||||||
Cumulative effect of change in Accounting principle | — | — | — | — | — | 11,569 | — | — | — | 11,569 | |||||||||||||||||||||||||||
Balance, May 4, 2019 | — | $ | — | 139,836 | $ | 1,398 | $ | 752,218 | $ | (867,746 | ) | $ | (15,070 | ) | (782 | ) | $ | (19,109 | ) | $ | (148,309 | ) | |||||||||||||||
Net income | — | — | — | — | — | 54,523 | — | — | — | 54,523 | |||||||||||||||||||||||||||
Unrealized loss on cash flow hedge, net of tax | — | — | — | — | — | — | (11,540 | ) | — | — | (11,540 | ) | |||||||||||||||||||||||||
Common stock issued under stock incentive plans | — | — | 312 | 4 | (4 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued under ESPP plan | — | — | 37 | — | 726 | — | — | — | — | 726 | |||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 4,952 | — | — | — | — | 4,952 | |||||||||||||||||||||||||||
Net cash received on option exercises | — | — | — | — | 2,299 | — | — | — | — | 2,299 | |||||||||||||||||||||||||||
Treasury stock purchases | — | — | — | — | — | — | — | (2,641 | ) | (67,237 | ) | (67,237 | ) | ||||||||||||||||||||||||
Balance, August 3, 2019 | — | $ | — | 140,185 | $ | 1,402 | $ | 760,191 | $ | (813,223 | ) | $ | (26,610 | ) | (3,423 | ) | $ | (86,346 | ) | $ | (164,586 | ) |
Contingently Redeemable Common Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Treasury Stock | Total Stockholders’ Deficit | |||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||
Balance, February 3, 2018 | 1,456 | $ | 10,438 | 87,073 | $ | 871 | $ | 2,883 | $ | (1,036,012 | ) | $ | 2,401 | — | $ | — | $ | (1,029,857 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 14,137 | — | — | — | 14,137 | |||||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 970 | — | — | — | — | 970 | |||||||||||||||||||||||||||
Options exercised | 280 | 2,792 | — | — | (2,210 | ) | — | — | — | — | (2,210 | ) | |||||||||||||||||||||||||
Call of shares | — | (28 | ) | — | — | (12 | ) | — | — | — | — | (12 | ) | ||||||||||||||||||||||||
Net shares used to pay tax withholdings upon options exercise | — | — | — | — | (1,271 | ) | — | — | — | — | (1,271 | ) | |||||||||||||||||||||||||
Cumulative effect of change in Accounting principle | — | — | — | — | — | (6,362 | ) | — | — | — | (6,362 | ) | |||||||||||||||||||||||||
Balance, May 5, 2018 | 1,736 | $ | 13,202 | 87,073 | $ | 871 | $ | 360 | $ | (1,028,237 | ) | $ | 2,401 | — | $ | — | $ | (1,024,605 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | (5,614 | ) | — | — | — | (5,614 | ) | |||||||||||||||||||||||||
Stock compensation expense | — | — | — | — | 51,156 | — | — | — | — | 51,156 | |||||||||||||||||||||||||||
Common stock issued for public offering, net of related fees | — | — | 43,125 | 431 | 685,458 | — | — | — | — | 685,889 | |||||||||||||||||||||||||||
Common stock issued under stock incentive plans | — | — | 4,261 | 43 | (43 | ) | — | — | — | — | — | ||||||||||||||||||||||||||
Stock reclassification as a result of public offering | (1,736 | ) | (13,202 | ) | 1,736 | 17 | 13,185 | — | — | — | — | 13,202 | |||||||||||||||||||||||||
Common stock repurchased upon vesting of stock awards | — | — | — | — | — | — | — | (782 | ) | (19,109 | ) | (19,109 | ) | ||||||||||||||||||||||||
Net shares used to pay tax withholdings upon exercise | — | — | — | — | (18,792 | ) | — | — | — | — | (18,792 | ) | |||||||||||||||||||||||||
Balance, August 4, 2018 | — | $ | — | 136,195 | $ | 1,362 | $ | 731,324 | $ | (1,033,851 | ) | $ | 2,401 | (782 | ) | $ | (19,109 | ) | $ | (317,873 | ) |
Twenty-Six Weeks Ended | |||||||
August 3, 2019 | August 4, 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income | $ | 90,321 | $ | 8,523 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 77,671 | 82,498 | |||||
Amortization of debt issuance costs and accretion of original issue discount | 2,646 | 3,911 | |||||
Debt extinguishment and refinancing charges | — | 19,159 | |||||
Impairment charges | — | 3,000 | |||||
Other non-cash items, net | 2,733 | 791 | |||||
Stock-based compensation expense | 8,796 | 52,126 | |||||
Deferred income tax provision (benefit) | 10,563 | (1,623 | ) | ||||
Increase (decrease) in cash due to changes in: | |||||||
Accounts receivable | 32,022 | 25,409 | |||||
Merchandise inventories | 25,765 | 14,093 | |||||
Prepaid expenses and other current assets | 20,980 | 20,676 | |||||
Other assets | (498 | ) | 1,005 | ||||
Accounts payable | (15,046 | ) | 37,524 | ||||
Change in book overdrafts | (5,865 | ) | (28,295 | ) | |||
Accrued expenses | (35,083 | ) | (34,388 | ) | |||
Other non-current liabilities | 119 | (1,190 | ) | ||||
Net cash provided by operating activities | 215,124 | 203,219 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Additions to property and equipment, net of disposals | (88,298 | ) | (75,666 | ) | |||
Net cash used in investing activities | (88,298 | ) | (75,666 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Payments on long term debt | (7,689 | ) | (22,829 | ) | |||
Extinguishment of Second Lien Term Loan | — | (631,283 | ) | ||||
Proceeds from ABL Facility | 596,000 | 670,000 | |||||
Payments on ABL Facility | (655,000 | ) | (794,000 | ) | |||
Net cash received (paid) from stock option exercises | 8,618 | (19,481 | ) | ||||
Net cash received from Employee Stock Purchase Program (ESPP) | 726 | — | |||||
Acquisition of treasury stock | (67,237 | ) | (19,149 | ) | |||
Proceeds from Initial Public Offering, net of underwriters’ discount and commission | — | 690,970 | |||||
Payment of Initial Public Offering costs | — | (5,081 | ) | ||||
Other financing activities | (298 | ) | (349 | ) | |||
Net cash used in financing activities | (124,880 | ) | (131,202 | ) | |||
Net increase (decrease) in cash and cash equivalents | 1,946 | (3,649 | ) | ||||
Cash and cash equivalents at beginning of period | 27,146 | 34,954 | |||||
Cash and cash equivalents at end of period | $ | 29,092 | $ | 31,305 | |||
Supplemental cash flow information: | |||||||
Interest paid | $ | 50,844 | $ | 99,071 | |||
Income taxes paid | 17,094 | 13,988 | |||||
Noncash financing and investing activities: | |||||||
Property additions included in accrued expenses | 15,981 | 13,747 | |||||
Conversion of contingently redeemable common stock into common stock | — | 13,202 |
Thirteen Weeks Ended | ||
August 3, 2019 | August 4, 2018 | |
Edible Grocery | 23% | 23% |
Perishables | 29% | 29% |
Non-Edible Grocery | 20% | 21% |
General Merchandise | 15% | 13% |
Gasoline and Other Ancillary Services | 13% | 14% |
Twenty-Six Weeks Ended | ||
August 3, 2019 | August 4, 2018 | |
Edible Grocery | 23% | 23% |
Perishables | 28% | 29% |
Non-Edible Grocery | 21% | 21% |
General Merchandise | 14% | 13% |
Gasoline and Other Ancillary Services | 14% | 14% |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||
August 3, 2019 | August 3, 2019 | |||||||
Operating lease cost | $ | 81,327 | $ | 159,761 | ||||
Finance lease cost: | ||||||||
Amortization of right-of-use assets | 282 | 564 | ||||||
Interest on lease liabilities | 628 | 1,259 | ||||||
Total finance lease costs | 910 | 1,823 | ||||||
Variable lease costs | — | 93 | ||||||
Net lease costs | $ | 82,237 | $ | 161,677 |
Operating Leases | Finance Leases | ||||
Weighted average remaining lease term in years | 9.2 | 9.8 | |||
Weighted average discount rate percentage | 8.3 | % | 8.3 | % |
Operating cash flows paid for operating leases | $ | 154,980 | ||
Operating cash flows paid for interest portion of finance leases | 1,259 | |||
Financing cash flows paid for principal portion of finance leases | 298 |
Fiscal year | Operating Leases | Finance Leases | |||||
2019 (a) | $ | 131,243 | $ | 1,298 | |||
2020 | 311,318 | 3,412 | |||||
2021 | 305,401 | 3,439 | |||||
2022 | 289,964 | 3,439 | |||||
2023 | 271,653 | 3,439 | |||||
Thereafter | 1,818,427 | 20,281 | |||||
Total future minimum operating lease payments | 3,128,006 | 35,308 | |||||
Less: imputed interest | (1,052,037 | ) | (18,779 | ) | |||
Present value of operating lease liabilities | $ | 2,075,969 | $ | 16,529 |
Fiscal Year | Operating Leases | Finance Leases | ||||||
2019 | $ | 309,785 | $ | 4,510 | ||||
2020 | 310,956 | 4,807 | ||||||
2021 | 299,410 | 4,833 | ||||||
2022 | 282,841 | 4,894 | ||||||
2023 | 264,363 | 4,956 | ||||||
Thereafter | 1,778,207 | 34,377 | ||||||
Total | $ | 3,245,562 | $ | 58,377 |
August 3, 2019 | February 2, 2019 | August 4, 2018 | |||||||||
ABL Facility | $ | 230,000 | $ | 289,000 | $ | 93,000 | |||||
First Lien Term Loan | 1,522,356 | 1,530,045 | 1,887,734 | ||||||||
Unamortized debt discount and debt issuance cost | (16,377 | ) | (18,197 | ) | (24,413 | ) | |||||
Less: current portion | (195,377 | ) | (254,377 | ) | (62,250 | ) | |||||
Long-term debt | $ | 1,540,602 | $ | 1,546,471 | $ | 1,894,071 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
August 3, 2019 | August 4, 2018 | August 3, 2019 | August 4, 2018 | ||||||||||||
Interest on debt | $ | 24,847 | $ | 37,633 | $ | 50,698 | $ | 79,762 | |||||||
Interest on capital lease and financing obligations | 628 | 1,041 | 1,259 | 2,085 | |||||||||||
Debt issuance costs amortization | 696 | 915 | 1,392 | 1,930 | |||||||||||
Original issue discount amortization | 627 | 878 | 1,254 | 1,979 | |||||||||||
Loss on debt extinguishment | — | 19,159 | — | 19,159 | |||||||||||
Capitalized interest | (15 | ) | (71 | ) | (31 | ) | (157 | ) | |||||||
Interest expense, net | $ | 26,783 | $ | 59,555 | $ | 54,572 | $ | 104,758 |
Stock Options | Restricted Stock | Restricted Stock Units | ||||||||||||||||||
Shares | Weighted Average Exercise Price | Shares | Weighted Average Grant Date Fair Value | Shares | Weighted Average Grant Date Fair Value | |||||||||||||||
Outstanding, February 2, 2019 | 6,252 | $ | 10.09 | 973 | $ | 22.14 | 16 | $ | 27.59 | |||||||||||
Granted | 726 | 27.59 | 797 | 27.59 | 22 | 25.70 | ||||||||||||||
Exercised/vested | (1,242 | ) | 5.48 | (318 | ) | 26.40 | (16 | ) | 25.64 | |||||||||||
Forfeited/canceled | (4 | ) | 5.72 | (6 | ) | 25.63 | — | — | ||||||||||||
Outstanding, August 3, 2019 | 5,732 | $ | 13.30 | 1,446 | $ | 25.16 | 22 | $ | 25.70 |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||
August 3, 2019 | August 4, 2018 | August 3, 2019 | August 4, 2018 | ||||||||
Weighted-average common shares outstanding, used for basic computation | 136,570,834 | 106,914,966 | 136,690,459 | 97,734,132 | |||||||
Plus: Incremental shares of potentially dilutive securities | 2,945,487 | — | 3,298,988 | 4,997,608 | |||||||
Weighted-average number of common and dilutive potential common shares outstanding | 139,516,321 | 106,914,966 | 139,989,447 | 102,731,740 |
Fair Value at | ||||||||||||||||
Accounting for cash flow hedges | Notional Amount | Fixed Rate | Balance Sheet Classification | August 3, 2019 | February 2, 2019 | |||||||||||
Interest rate swap | $ | 600,000 | 3.00 | % | Other non-current liabilities | $ | (20,549 | ) | $ | (9,730 | ) | |||||
Interest rate swap | 360,000 | 3.00 | % | Other non-current liabilities | (12,303 | ) | (5,804 | ) | ||||||||
Interest rate swap | 240,000 | 3.00 | % | Other non-current liabilities | (8,207 | ) | (3,876 | ) | ||||||||
Net carrying amount | $ | 1,200,000 | Total liabilities | $ | (41,059 | ) | $ | (19,410 | ) |
• | costs associated with operating our distribution centers, including payroll, payroll benefits, occupancy costs and depreciation; |
• | freight expenses associated with moving merchandise from vendors to our distribution centers and from our distribution centers to our clubs; and |
• | vendor allowances, rebates and cash discounts. |
• | payroll and payroll benefits for club and corporate employees; |
• | rent, depreciation and other occupancy costs for retail and corporate locations; |
• | advertising expenses; |
• | tender costs, including credit and debit card fees; |
• | amortization of intangible assets; and |
• | consulting, legal, insurance and other professional services expenses. |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
August 3, 2019 | August 4, 2018 | August 3, 2019 | August 4, 2018 | ||||||||||||
(dollars in thousands) | |||||||||||||||
Income (loss) from continuing operations | $ | 54,293 | $ | (5,490 | ) | $ | 90,378 | $ | 8,811 | ||||||
Interest expense, net | 26,783 | 59,555 | 54,572 | 104,758 | |||||||||||
Provision (benefit) for income taxes | 17,665 | (15,391 | ) | 24,473 | (10,325 | ) | |||||||||
Depreciation and amortization | 39,001 | 41,076 | 77,671 | 82,498 | |||||||||||
Stock-based compensation expense(1) | 4,952 | 52,395 | 8,796 | 53,365 | |||||||||||
Preopening expenses(2) | 2,127 | 641 | 4,423 | 1,858 | |||||||||||
Management fees(3) | — | 1,333 | — | 3,333 | |||||||||||
Noncash rent(4) | 3,019 | 1,218 | 3,773 | 2,441 | |||||||||||
Strategic consulting(5) | 4,610 | 6,299 | 11,349 | 13,248 | |||||||||||
Offering costs(6) | 706 | 761 | 1,928 | 761 | |||||||||||
Other adjustments(7) | 31 | 639 | (100 | ) | 3,845 | ||||||||||
Adjusted EBITDA | $ | 153,187 | $ | 143,036 | $ | 277,263 | $ | 264,593 | |||||||
Adjusted EBITDA as a percentage of net sales | 4.7 | % | 4.4 | % | 4.4 | % | 4.2 | % |
(1) | Represents total stock-based compensation expense and includes expense related to certain restricted stock and stock option awards issued in connection with our IPO. |
(2) | Represents direct incremental costs of opening or relocating a facility that are charged to operations as incurred. |
(3) | Represents management fees paid to our sponsors (or advisory affiliates thereof) in accordance with our management services agreement, which terminated upon closing of the IPO. |
(4) | Consists of an adjustment to remove the non-cash portion of rent expense. |
(5) | Represents fees paid to external consultants for strategic initiatives of limited duration. |
(6) | Represents costs related to our IPO and the registered offerings by selling stockholders. |
(7) | 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. Fiscal year 2018 also includes amortization of a deferred gain from sale leaseback transactions in 2013, and impairment charges related to a club that was relocated in 2018. |
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
August 3, 2019 | August 4, 2018 | August 3, 2019 | August 4, 2018 | ||||||||||||
(in thousands) | |||||||||||||||
Net cash from operating activities | $ | 170,188 | $ | 137,862 | $ | 215,124 | $ | 203,219 | |||||||
Less: Capital expenditures | 51,764 | 33,521 | (88,298 | ) | (75,666 | ) | |||||||||
Free cash flow | $ | 118,424 | $ | 104,341 | $ | 126,826 | $ | 127,553 |
Statement of Operations Data | Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
(dollars in thousands) | August 3, 2019 | August 4, 2018 | August 3, 2019 | August 4, 2018 | |||||||||||
Net sales | $ | 3,271,145 | $ | 3,236,664 | $ | 6,340,908 | $ | 6,230,406 | |||||||
Membership fee income | 74,697 | 70,441 | 148,070 | 138,396 | |||||||||||
Total revenues | 3,345,842 | 3,307,105 | 6,488,978 | 6,368,802 | |||||||||||
Cost of sales | 2,733,085 | 2,718,602 | 5,302,062 | 5,228,940 | |||||||||||
Selling, general and administrative expenses | 511,889 | 549,188 | 1,013,070 | 1,034,760 | |||||||||||
Preopening expenses | 2,127 | 641 | 4,423 | 1,858 | |||||||||||
Operating income | 98,741 | 38,674 | 169,423 | 103,244 | |||||||||||
Interest expense, net | 26,783 | 59,555 | 54,572 | 104,758 | |||||||||||
Income (loss) from continuing operations before income taxes | 71,958 | (20,881 | ) | 114,851 | (1,514 | ) | |||||||||
Provision (benefit) for income taxes | 17,665 | (15,391 | ) | 24,473 | (10,325 | ) | |||||||||
Income (loss) from continuing operations | 54,293 | (5,490 | ) | 90,378 | 8,811 | ||||||||||
Income (loss) from discontinued operations, net of income taxes | 230 | (124 | ) | (57 | ) | (288 | ) | ||||||||
Net income (loss) | $ | 54,523 | $ | (5,614 | ) | $ | 90,321 | $ | 8,523 | ||||||
Operational Data: | |||||||||||||||
Total clubs at end of period | 217 | 215 | 217 | 215 | |||||||||||
Comparable club sales | 0.6 | % | 5.0 | % | 1.3 | % | 4.2 | % | |||||||
Merchandise comparable club sales | 1.6 | % | 2.0 | % | 1.7 | % | 2.0 | % | |||||||
Adjusted EBITDA | $ | 153,187 | $ | 143,036 | $ | 277,263 | $ | 264,593 | |||||||
Free cash flow | 118,424 | 104,341 | 126,826 | 127,553 |
Thirteen Weeks Ended | ||
August 3, 2019 | ||
Comparable club sales | 0.6 | % |
Less: contribution from gasoline sales | (1.0 | )% |
Merchandise comparable club sales | 1.6 | % |
Twenty-Six Weeks Ended | ||
August 3, 2019 | ||
Comparable club sales | 1.3 | % |
Less: contribution from gasoline sales | (0.4 | )% |
Merchandise comparable club sales | 1.7 | % |
Twenty-Six Weeks Ended | |||||||
August 3, 2019 | August 4, 2018 | ||||||
(in thousands) | |||||||
Net cash provided by operating activities | $ | 215,124 | $ | 203,219 | |||
Net cash used in investing activities | (88,298 | ) | (75,666 | ) | |||
Net cash used in financing activities | (124,880 | ) | (131,202 | ) | |||
Net increase (decrease) in cash and cash equivalents | $ | 1,946 | $ | (3,649 | ) |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||
May 5, 2019 June 1, 2019 | — | $ | — | — | — | ||||
June 2, 2019 to July 6, 2019 | 2,500,000 | 25.41 | 2,500,000 | — | |||||
July 7, 2019 to August 3, 2019 | — | — | — | — | |||||
Total | 2,500,000 | $ | 25.41 | 2,500,000 | — |
(1) | Includes 2,500,000 shares of common stock repurchased by the Company at the same per share public offering price of $25.41 per share as the shares sold by the selling stockholder in the secondary offering consummated on June 27, 2019. |
(2) | The "Average Price Paid per Share" for the period presented reflects the cash paid divided by the number of shares reacquired. |
(3) | The Company does not have any publicly announced share repurchase programs. |
Incorporated by Reference | |||||||||||||
Exhibit Number | Exhibit Description | Form | File No. | Exhibit | Filing Date | Filed Herewith | |||||||
8-K | 001-38559 | 3.1 | July 2, 2018 | ||||||||||
8-K | 001-38559 | 3.2 | July 2, 2018 | ||||||||||
POS AM | 333-229593 | 10.18 | June 4, 2019 | ||||||||||
X | |||||||||||||
X | |||||||||||||
X | |||||||||||||
X | |||||||||||||
101.INS | XBRL Instance Document | ||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||||||||||
101.PRE | XBRL Taxonomy Extension Linkbase Document |
BJ’S WHOLESALE CLUB HOLDINGS, INC. | ||||||||
Date: August 30, 2019 | By: | /s/ Robert W. Eddy | ||||||
Robert W. Eddy | ||||||||
Executive Vice President, Chief Financial & Administrative Officer (Principal Financial Officer and Authorized Signatory) |
1. | I have reviewed this Quarterly Report on Form 10-Q of BJ’s Wholesale Club Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | [Intentionally omitted]; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Christopher J. Baldwin | |
Christopher J. Baldwin Chairman, President and Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of BJ’s Wholesale Club Holdings, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | [Intentionally omitted]; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Robert W. Eddy | |
Executive Vice President, Chief Financial and Administrative Officer (Principal Financial Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Christopher J. Baldwin | |
Christopher J. Baldwin Chairman, President and Chief Executive Officer (Principal Executive Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Robert W. Eddy | |
Robert W. Eddy Executive Vice President, Chief Financial and Administrative Officer (Principal Financial Officer) |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Aug. 03, 2019 |
Aug. 23, 2019 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Aug. 03, 2019 | |
Entity Registrant Name | BJ's Wholesale Club Holdings, Inc. | |
Entity Central Index Key | 0001531152 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --02-01 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 136,772,790 | |
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Aug. 03, 2019 |
Feb. 02, 2019 |
Aug. 04, 2018 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Common stock, par value (in dollar per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 305,000,000 | 305,000,000 | 305,000,000 |
Common stock, issued (in shares) | 140,185,000 | 138,099,000 | 136,195,000 |
Common stock, outstanding (in shares) | 136,762,000 | 137,317,000 | 135,413,000 |
Treasury stock, at cost (in shares) | 3,423,000 | 782,000 | 782,000 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Aug. 03, 2019 |
Aug. 03, 2019 |
|
Income Statement [Abstract] | ||
Unrealized loss on cash flow hedge, income tax | $ 4,488 | $ 5,948 |
Description of Business |
6 Months Ended |
---|---|
Aug. 03, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business BJ’s is a leading warehouse club operator on the east coast of the United States. As of August 3, 2019, the Company operated 217 warehouse clubs and 140 gas stations, in 16 states. The Company is a publicly traded entity and is listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “BJ.” The Company follows, and reports, based on the National Retail Federation’s fiscal calendar. The thirteen-week periods ended August 3, 2019 and August 4, 2018 are referred to as the "second quarter of fiscal year 2019" and the "second quarter of fiscal year 2018," respectively. |
Summary of Significant Accounting Policies |
6 Months Ended |
---|---|
Aug. 03, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying interim financial statements of BJ’s Wholesale Club Holdings, Inc. 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 generally accepted accounting principles in the United States of America ("GAAP"). The consolidated balance sheet as of February 2, 2019 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the second quarter of fiscal year 2019 are not necessarily indicative of future results or results to be expected for fiscal year 2019. The Company’s business, in common with the business of retailers generally, is subject to seasonal influences. The Company’s sales and operating income have typically been highest in the fourth quarter holiday season and lowest in the first quarter of each fiscal year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year 2018, as filed with the Securities and Exchange Commission (the "SEC") on March 25, 2019. Initial Public Offering and Secondary Offerings On July 2, 2018, the Company completed its initial public offering ("IPO"), in which the Company issued and sold 43,125,000 shares of its common stock (including 5,625,000 shares of common stock that were subject to the underwriters’ option to purchase additional shares) at an initial public offering price of $17.00 per share. The Company received total aggregate proceeds of $685.9 million net of underwriters’ discounts, commissions and other transaction expenses, which totaled $47.2 million. On July 2, 2018, the Company used the net proceeds from the IPO to extinguish the total outstanding balance of $623.2 million of its senior secured second lien term loan facility (the “Second Lien Term Loan”). See Note 6, Debt and Credit Arrangements, for further discussion regarding the Second Lien Term Loan extinguishment. On October 1, 2018, certain selling stockholders completed a registered sale (the "October 2018 Secondary Offering") of 32,200,000 shares of the Company’s common stock at a public offering price of $26.00 per share. Of the 32,200,000 shares sold, 4,200,000 shares represented the underwriters’ exercise of their overallotment option. The Company did not receive any proceeds from this offering or incur underwriters’ discounts or commissions on the sale. The Company incurred transaction costs of $2.4 million primarily for legal, accounting and printer services related to the offering. On March 11, 2019, certain selling stockholders completed a registered sale (the "March 2019 Secondary Offering") of 19,550,000 shares of the Company's common stock at a public offering price of $25.08 per share. Of the 19,550,000 shares sold, 2,550,000 shares represented the underwriters’ exercise of their overallotment option. The Company did not receive any proceeds from the March 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred transaction costs of $1.2 million primarily for legal, accounting and printer services related to the offering. On June 6, 2019, certain selling stockholders completed a registered sale (the "June 2019 Secondary Offering") of 17,500,000 shares of the Company's common stock at a public offering price of $24.65 per share. The Company did not receive any proceeds from the June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the June 2019 Secondary Offering. On June 27, 2019, certain selling stockholders completed a registered sale (the "CVC June 2019 Secondary Offering") of 9,977,024 shares of the Company's common stock at a price of $25.41 per share. In connection with this offering, the Company repurchased 2,500,000 shares at $25.41 per share. The Company did not receive any proceeds from the CVC June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the CVC June 2019 Secondary Offering. Stock Split On June 15, 2018, the Company effected a seven-to-one stock split of its issued and outstanding shares of common stock and proportional adjustment to the existing conversion ratios for each series of the Company’s Contingently Redeemable Common Stock (see Note 9). Accordingly, all shares and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the contingently redeemable common stock conversion ratios. Deferred Offering Costs The Company capitalized certain legal, professional, accounting and other third-party fees that were directly associated with the IPO as deferred offering costs. Upon the consummation of the IPO, $47.2 million was recorded in stockholders’ deficit as a reduction of additional paid-in capital. Reclassification A reclassification has been made to the consolidated statements of cash flows for the twenty-six weeks ended August 4, 2018 related to a tax windfall benefit from that period and the impact of recording the allowance for returns reserve on a gross basis in accordance with the adoption of ASU 2014-09, Revenue from Contracts with Customers, in order to conform with the current period presentation of these items. Specifically, the Other non-cash items, net line item decreased by $9.7 million, the Deferred income tax provision (benefit) line item decreased by $0.1 million, the Prepaid expenses and other current assets line item increased by $7.8 million, and the Accrued expenses line item increased by $2.0 million. The reclassification has no impact on net cash provided by operating activities. Recent Accounting Pronouncements The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2018. There have been no material changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal year 2019. Leases (ASU 2016-2) In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-2, Leases (FASB Accounting Standards Codification (“ASC”) Topic 842, Leases) which requires recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The Company adopted ASC 842 using the modified retrospective method at the beginning of fiscal year 2019. In accordance with ASC 842, the Company did not recast comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of $2.040 billion of operating lease right-of-use (“ROU”) assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the ROU assets. Finance leases were not impacted by the adoption of the new guidance as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not have a material impact on the Company’s interim unaudited consolidated statements of operations and comprehensive income, statements of contingently redeemable common stock and stockholders’ deficit or cash flows, and had a $11.6 million impact on beginning retained earnings in fiscal year 2019 primarily associated with the impact of the Company's deferred gain on prior years' sale leaseback transactions, net of tax. The Company elected the transition package of practical expedients permitted within the new standard which, among other things, allowed it to carry-forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of ROU assets and therefore continued to utilize lease terms determined under previous lease guidance. Please refer to Note 4 – Leases for further discussion on the Company's leases. Non-Employee Share-Based Compensation (ASU 2018-07) In June 2018, the FASB issued ASU 2018-07 Improvements to Non-employee Share-Based Payment Accounting which updates the guidance to Compensation—Stock Compensation (Topic 718). The updated guidance aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees, with certain exceptions. The Company adopted ASU 2018-07 at the beginning of fiscal year 2019 and the adoption of this standard did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Fair Value Measurement (ASU 2018-13) In August 2018, the FASB issued ASU 2018-13 Changes to the Disclosure Requirements for Fair Value Measurement which updates the guidance to Fair Value Measurement (Topic 820). The updated guidance modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The updated guidance is effective for fiscal periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company does not anticipate the updated guidance will have a material impact on its consolidated financial statements. Intangibles-Goodwill and Other-Internal-Use Software (ASU 2018-15) In August 2018, the FASB issued ASU 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The update related to accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update allows entities who are customers in hosting arrangements that are service contracts to apply the existing internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The update specifies classification for capitalizing implementation costs and related amortization expense within the financial statements and requires additional disclosures. The updated guidance is effective for fiscal reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted and can be applied either retrospectively or prospectively. The Company is currently evaluating the transition methods and the impact of the adoption of this standard on its consolidated financial statements. Goodwill Impairment (ASU 2017-04) In January 2017, the FASB issued ASU 2017-04, which provides amendments to ASC 350, "Intangibles - Goodwill and Other", to eliminate Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company does not believe adoption of this standard will have a material effect on its consolidated financial statements. Credit Losses (ASU 2016-13) In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 will replace the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, an entity will recognize a loss (or allowance) upon initial recognition of the asset that reflects all future events that will lead to a loss being realized, regardless of whether it is probable that the future event will occur. The "incurred loss" model considers past events and current conditions, while the "expected loss" model includes expectations for the future which have yet to occur. ASU 2016-13 is effective for public companies for fiscal years beginning after December 15, 2019 with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods therein. The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe adoption of this standard will have a material impact on its consolidated financial statements. |
Revenue Recognition |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition 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. Merchandise sales—The Company recognizes sales of merchandise at clubs and gas stations when the customer takes possession of the goods and tenders payment. Sales of merchandise at the Company’s clubs and gas stations, excluding sales taxes, represent approximately 96% of the Company’s net sales and approximately 94% of the Company’s total revenues for the twenty-six weeks ended August 3, 2019. Sales taxes are recorded as a liability at the point of sale. Revenue is recorded at the point of sale based on the transaction price on the shelf sign, net of any applicable discounts, sales taxes and expected refunds. For e-commerce sales, the Company recognizes sales when control of the merchandise is transferred to the customer, which is typically at the shipping point. BJ’s Perks Rewards and My BJ's Perks programs— The Company’s BJ’s Perks Rewards® membership program allows participating members to earn 2% cash back, up to a maximum of $500 per year, on qualified purchases made at BJ’s. The Company also offers a co-branded credit card program, the My BJ’s Perks® program, which allows My BJ's Perks® Mastercard credit card holders to earn 3% or 5% cash back on eligible purchases made at BJ’s and 1% or 2% cash back on purchases made with the card outside of BJ’s. Cash back is in the form of electronic awards issued in $20 increments that may be used online or in-club at the register and expire six months from the date issued. Earned awards may be redeemed on future purchases made at the Company. The Company recognizes revenue for earned awards when customers redeem such awards as part of a purchase at one of the Company’s clubs or the Company’s website. The Company accounts for these transactions as multiple element arrangements and allocates the transaction price to separate performance obligations using their relative fair values. The Company includes the fair value of award dollars earned in deferred revenue at the time the award dollars are earned. This liability was $28.4 million at August 3, 2019, $25.8 million at February 2, 2019 and $24.2 million at August 4, 2018. Royalty revenue received in connection with the My BJ's Perks co-brand credit card program is variable consideration and is considered deferred until the card holder makes a purchase. The Company’s total deferred royalty revenue related to the outstanding My BJ’s Perks Rewards was $13.2 million, $13.4 million and $12.9 million at August 3, 2019, February 2, 2019 and August 4, 2018, respectively. The timing of revenue recognition of these awards dollars is driven by actual customer activities, such as redemptions and expirations. As of August 3, 2019, the Company expects to recognize $9.5 million of the deferred revenue in fiscal year 2019, and expects the remainder will be recognized in the years thereafter. Membership—The Company charges a membership fee to its customers. That fee 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. Because 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. The Company’s deferred revenue related to membership fees was $138.4 million, $134.4 million and $129.9 million at August 3, 2019, February 2, 2019 and August 4, 2018, respectively. Gift Card Programs—The Company sells BJ’s gift cards that allow the customer to redeem the card for future purchases equal to the amount of the original purchase price of the gift card. Revenue from gift card sales is recognized upon redemption of the gift card because the Company’s performance obligation to redeem the gift card for merchandise is satisfied when the gift card is redeemed. Historically, the Company has recognized breakage under the remote model, which recognizes breakage income when the likelihood of the customer exercising its remaining rights becomes remote. Under the current guidance, the Company recognizes breakage in proportion to its rate of gift card redemptions. This change in breakage recognition model had an immaterial impact on the Company’s results of operations for the second quarter of fiscal year 2019 and second quarter of fiscal year 2018. Deferred revenue related to gift cards was $8.1 million, $9.1 million and $7.5 million at August 3, 2019, February 2, 2019 and August 4, 2018, respectively. The Company recognized $11.4 million and $10.1 million of revenue from gift card redemptions in the second quarter of fiscal year 2019 and second quarter of fiscal year 2018, respectively. The Company recognized $22.5 million and $21.4 million of revenue from gift card redemptions in the twenty-six weeks ended August 3, 2019 and the twenty-six weeks ended August 4, 2018, respectively. Disaggregation of Revenue The Company’s club retail operations, which represent substantially all the consolidated total revenues, are the Company’s only reportable segment. All the Company’s identifiable assets are 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 for the thirteen weeks ended August 3, 2019 and August 4, 2018, respectively.
The following table summarizes the Company’s percentage of net sales disaggregated by category for the twenty-six weeks ended August 3, 2019 and August 4, 2018, respectively.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company adopted ASC 842 as of February 3, 2019, using the modified retrospective method and applying transitional relief allowing entities to initially apply the requirements at the adoption date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, results and disclosures for the reporting periods beginning on February 3, 2019 are reported and presented under ASC 842, while prior period amounts and disclosures are not adjusted and continue to be reported and presented under ASC 840. As part of the adoption, the Company elected the following practical expedients: 1. A package of practical expedients allowing the Company to: a) carry forward its historical lease classification; b) avoid reassessing whether any expired or existing contracts are or contain leases; and c) avoid reassessing initial direct costs for any existing leases. 2. A practical expedient related to land easements, allowing the Company to carry forward the accounting treatment for land easements on existing agreements and eliminating the need to reassess existing lease contracts to determine if land easements are separate leases under ASC 842. The Company did not elect the following practical expedients: 1. A practical expedient that would allow the Company to use hindsight in determining the lease term and to assess impairment of the entity's ROU assets, since election of this expedient could make adoption more complex given that re-evaluation of the lease term. 2. A practical expedient allowing the Company to not separate lease components from nonlease components (e.g., common area maintenance costs) since currently the Company does not combine lease and nonlease components for any of its real estate leases. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception or modification of a contract and classifies each lease as either operating or finance lease at commencement. The Company only reassesses lease classification subsequent to commencement upon a change to the expected lease term or the contract being modified. The Company has operating and finance leases for the Company's clubs, and operating leases for the Company's distribution centers, corporate office, and stand-alone gas stations. Operating leases, net of accumulated amortization, are included in operating lease ROU assets, and current and non-current operating lease liabilities, on the interim unaudited consolidated balance sheet. Finance leases are included in property and equipment, accrued expenses and other current liabilities, and other non-current liabilities on the interim unaudited consolidated balance sheets. Lease liabilities are calculated using the effective interest method, regardless of classification, while the amortization of the ROU assets varies depending upon classification. Finance lease classification results in a front-loaded expense recognition pattern over the lease term, which amortizes the ROU asset by recognizing interest expense and amortization expense as separate components of lease expense and calculates the amortization expense component on a straight-line basis. Conversely, operating lease classification results in a straight-line expense recognition pattern over the lease term and recognizes lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Lease expense for finance and operating leases are included in selling general and administrative expense on the interim unaudited consolidated statement of operations and comprehensive income. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company is generally obligated for the cost of property taxes, insurance, and maintenance relating to its leases, which are often variable lease payments. Such costs are presented as occupancy costs for finance and operating leases included in selling, general and administrative expense on the interim unaudited consolidated statement of operations and comprehensive income. Certain of the Company's lease agreements provide for lease payments based on future sales volumes at the leased location, or include rental payments adjusted periodically for inflation or based on an index, which are not measurable at the inception of the lease. The Company expenses such variable amounts in the period incurred, which is the period in which it becomes probable that the specified target that triggers the variable lease payments will be achieved. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Where the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate ("IBR") to determine the present value of lease payments. The collateralized IBR is based on a synthetic credit rating that is externally prepared on an annual basis at the measurement date, and that the Company adjusts quarterly with a yield curve that approximates the Company's market risk profile. In calculating the present value of the lease payments, the Company has elected to utilize its estimated IBR based on the original lease term and not the remaining lease term. The initial primary term of the Company's operating leases ranges from 5 to 44 years, with most of these leases having an initial term of 20 years. The initial primary term of the Company's two finance leases are 20 years. The adoption of ASC 842 resulted in the initial recognition of $2.040 billion of operating lease ROU assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the right-of-use assets. The Company derecognized assets and liabilities of $94.7 million and $125.8 million, respectively, in connection with the non-cash transitional adjustment. As a result of adopting ASC 842, the Company also recorded a charge to retained earnings of $11.6 million, primarily associated with the net of tax impact of the Company's deferred gain on prior years' sale leaseback transactions. Finance leases were not impacted by the adoption of the new guidance, as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not materially impact the Company's consolidated statements of operations and comprehensive income, or the Company's consolidated statements of cash flows. As of August 3, 2019, assets recorded under finance leases were $19.3 million and accumulated amortization associated with finance leases was $8.9 million, while ROU assets recorded as operating leases were $2.114 billion and accumulated amortization associated with operating leases was $73.0 million. As of August 3, 2019, the Company also recorded non-cash increases of $71.7 million to ROU assets and liabilities resulting from lease reassessments. The following table is a summary of the Company’s components of total lease costs for the thirteen and twenty-six weeks ended August 3, 2019, respectively (in thousands):
The weighted average remaining lease term and weighted average discount rate for operating and finance leases as of August 3, 2019 were as follows:
Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):
Future lease commitments to be paid by the Company as of August 3, 2019 were as follows (in thousands):
(a) Represents the remainder of fiscal year 2019 which excludes the twenty-six weeks ended August 3, 2019. As of August 3, 2019, the Company had certain executed real estate and gas station leases that have not yet commenced and therefore are not reflected in the tables above. These leases are expected to commence between fiscal year 2019 and the fiscal year ending January 30, 2021 with lease terms ranging from 10 years to 25 years. The following table represents the Company's lease commitments under its previous presentation of its operating and finance lease agreements as of February 2, 2019 (in thousands):
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Leases | Leases The Company adopted ASC 842 as of February 3, 2019, using the modified retrospective method and applying transitional relief allowing entities to initially apply the requirements at the adoption date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, results and disclosures for the reporting periods beginning on February 3, 2019 are reported and presented under ASC 842, while prior period amounts and disclosures are not adjusted and continue to be reported and presented under ASC 840. As part of the adoption, the Company elected the following practical expedients: 1. A package of practical expedients allowing the Company to: a) carry forward its historical lease classification; b) avoid reassessing whether any expired or existing contracts are or contain leases; and c) avoid reassessing initial direct costs for any existing leases. 2. A practical expedient related to land easements, allowing the Company to carry forward the accounting treatment for land easements on existing agreements and eliminating the need to reassess existing lease contracts to determine if land easements are separate leases under ASC 842. The Company did not elect the following practical expedients: 1. A practical expedient that would allow the Company to use hindsight in determining the lease term and to assess impairment of the entity's ROU assets, since election of this expedient could make adoption more complex given that re-evaluation of the lease term. 2. A practical expedient allowing the Company to not separate lease components from nonlease components (e.g., common area maintenance costs) since currently the Company does not combine lease and nonlease components for any of its real estate leases. In accordance with ASC 842, the Company determines if an arrangement is a lease at inception or modification of a contract and classifies each lease as either operating or finance lease at commencement. The Company only reassesses lease classification subsequent to commencement upon a change to the expected lease term or the contract being modified. The Company has operating and finance leases for the Company's clubs, and operating leases for the Company's distribution centers, corporate office, and stand-alone gas stations. Operating leases, net of accumulated amortization, are included in operating lease ROU assets, and current and non-current operating lease liabilities, on the interim unaudited consolidated balance sheet. Finance leases are included in property and equipment, accrued expenses and other current liabilities, and other non-current liabilities on the interim unaudited consolidated balance sheets. Lease liabilities are calculated using the effective interest method, regardless of classification, while the amortization of the ROU assets varies depending upon classification. Finance lease classification results in a front-loaded expense recognition pattern over the lease term, which amortizes the ROU asset by recognizing interest expense and amortization expense as separate components of lease expense and calculates the amortization expense component on a straight-line basis. Conversely, operating lease classification results in a straight-line expense recognition pattern over the lease term and recognizes lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Lease expense for finance and operating leases are included in selling general and administrative expense on the interim unaudited consolidated statement of operations and comprehensive income. Leases with an initial term of twelve months or less are not recorded on the balance sheet. The Company is generally obligated for the cost of property taxes, insurance, and maintenance relating to its leases, which are often variable lease payments. Such costs are presented as occupancy costs for finance and operating leases included in selling, general and administrative expense on the interim unaudited consolidated statement of operations and comprehensive income. Certain of the Company's lease agreements provide for lease payments based on future sales volumes at the leased location, or include rental payments adjusted periodically for inflation or based on an index, which are not measurable at the inception of the lease. The Company expenses such variable amounts in the period incurred, which is the period in which it becomes probable that the specified target that triggers the variable lease payments will be achieved. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Where the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate ("IBR") to determine the present value of lease payments. The collateralized IBR is based on a synthetic credit rating that is externally prepared on an annual basis at the measurement date, and that the Company adjusts quarterly with a yield curve that approximates the Company's market risk profile. In calculating the present value of the lease payments, the Company has elected to utilize its estimated IBR based on the original lease term and not the remaining lease term. The initial primary term of the Company's operating leases ranges from 5 to 44 years, with most of these leases having an initial term of 20 years. The initial primary term of the Company's two finance leases are 20 years. The adoption of ASC 842 resulted in the initial recognition of $2.040 billion of operating lease ROU assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the right-of-use assets. The Company derecognized assets and liabilities of $94.7 million and $125.8 million, respectively, in connection with the non-cash transitional adjustment. As a result of adopting ASC 842, the Company also recorded a charge to retained earnings of $11.6 million, primarily associated with the net of tax impact of the Company's deferred gain on prior years' sale leaseback transactions. Finance leases were not impacted by the adoption of the new guidance, as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not materially impact the Company's consolidated statements of operations and comprehensive income, or the Company's consolidated statements of cash flows. As of August 3, 2019, assets recorded under finance leases were $19.3 million and accumulated amortization associated with finance leases was $8.9 million, while ROU assets recorded as operating leases were $2.114 billion and accumulated amortization associated with operating leases was $73.0 million. As of August 3, 2019, the Company also recorded non-cash increases of $71.7 million to ROU assets and liabilities resulting from lease reassessments. The following table is a summary of the Company’s components of total lease costs for the thirteen and twenty-six weeks ended August 3, 2019, respectively (in thousands):
The weighted average remaining lease term and weighted average discount rate for operating and finance leases as of August 3, 2019 were as follows:
Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):
Future lease commitments to be paid by the Company as of August 3, 2019 were as follows (in thousands):
(a) Represents the remainder of fiscal year 2019 which excludes the twenty-six weeks ended August 3, 2019. As of August 3, 2019, the Company had certain executed real estate and gas station leases that have not yet commenced and therefore are not reflected in the tables above. These leases are expected to commence between fiscal year 2019 and the fiscal year ending January 30, 2021 with lease terms ranging from 10 years to 25 years. The following table represents the Company's lease commitments under its previous presentation of its operating and finance lease agreements as of February 2, 2019 (in thousands):
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Related Party Transactions |
6 Months Ended |
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Aug. 03, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Management Agreement The Company had a management services agreement with the Sponsors for ongoing consulting and advisory services that terminated upon the consummation of the Company’s IPO. The management services agreement provided for the aggregate payment of management fees to the Sponsors (or advisory affiliates thereof) of $8.0 million per year, plus out of pocket expenses. The Company incurred no management fees for the thirteen and twenty-six weeks ended August 3, 2019, respectively. The Company incurred $1.3 million and $3.3 million of management fees for the thirteen and twenty-six weeks ended August 4, 2018, respectively. Management fees and expenses are reported in selling, general and administrative expenses (“SG&A”) in the consolidated statements of operations and comprehensive income. One of the Company’s suppliers, Advantage Solutions Inc., is controlled by affiliates of the Sponsors. Advantage Solutions Inc. is principally a provider of in-club product demonstration and sampling services, and the Company also engages them from time to time to provide ancillary support services, including for example, seasonal gift wrapping, on-floor sales assistance and display maintenance. The Company incurred approximately $10.6 million and $10.4 million of costs payable to Advantage Solutions Inc. for services rendered during the thirteen weeks ended August 3, 2019 and August 4, 2018, respectively. The Company incurred approximately $22.4 million and $22.0 million costs payable to Advantage Solutions Inc. for services rendered during the twenty-six weeks ended August 3, 2019 and August 4, 2018, respectively. The demonstration and sampling service fees are fully funded by merchandise vendors who participate in the program. The Company believes the terms obtained or consideration paid or received, as applicable, in connection with the transactions were comparable to terms available or amounts that would be paid or received, as applicable, in arms’-length transactions with unrelated parties. |
Debt and Credit Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Credit Arrangements | Debt and Credit Arrangements Debt consisted of the following at August 3, 2019, February 2, 2019 and August 4, 2018 (in thousands):
ABL Facility On August 17, 2018, the Company amended and restated the senior secured asset based revolving credit and term facility (the "ABL Facility") to extend the maturity date from February 3, 2022 to August 17, 2023 and reduce the applicable interest rates and letter of credit fees on the facility. Total fees associated with the refinancing were approximately $1.0 million. The Company capitalized approximately $0.9 million of new debt issuance costs and had immaterial write-offs for previously capitalized debt issuance costs and third-party fees. The ABL Facility is comprised of a $950.0 million revolving credit facility and a $50.0 million term loan. The ABL Facility is secured on a senior basis by certain “liquid assets” of the Company and secured on a junior basis by certain “fixed assets” of the Company. The $50.0 million term loan payment terms are restricted in that the term loan cannot be repaid unless all loans outstanding under the revolving credit facility are repaid, and once repaid, cannot be re-borrowed. The availability under the $950.0 million revolving credit facility is restricted based on eligible monthly merchandise inventories and receivables as defined in the facility agreement. As amended, interest on the revolving credit facility is calculated either at LIBOR plus a range of 125 to 175 basis points or a base rate plus a range of 25 to 75 basis points; and interest on the term loan is calculated at LIBOR plus a range of 200 to 250 basis points or a base rate plus a range of 100 to 150 basis points, in all cases based on excess availability. The applicable spread of LIBOR and base rate loans at all levels of excess availability steps down by 12.5 basis points upon achieving total net leverage of 3.00 to 1.00. The ABL Facility also provides a sub-facility for issuances of letters of credit subject to certain fees defined in the ABL Facility agreement. The ABL Facility is subject to various commitment fees during the term of the facility based on utilization of the revolving credit facility. At August 3, 2019, there was $230.0 million outstanding in loans under the ABL Facility and $26.3 million in outstanding letters of credit. At February 2, 2019, there was $289.0 million outstanding in loans under the ABL Facility and $41.2 million in outstanding letters of credit. At August 4, 2018, there was $93.0 million outstanding in loans under the ABL Facility and $46.7 million in outstanding letters of credit. As of August 3, 2019, the interest rate on the revolving credit facility was 3.48%, and borrowing availability was $558.1 million. As of February 2, 2019, the interest rate on the revolving credit facility was 3.76%, and borrowing availability was $545.6 million. As of August 4, 2018, the interest rate on the revolving credit facility was 3.58%, and borrowing availability was $672.9 million. First Lien Term Loan On August 13, 2018, the Company amended its senior secured first lien term loan facility (the "First Lien Term Loan") to reduce the applicable interest rates and reduce the principal on the loan. The Company drew $350.0 million under its ABL Facility to fund the transaction. As amended, the First Lien Term Loan has an initial principal amount of $1,537.7 million and interest is calculated either at LIBOR plus 275 to 300 basis points or a base rate plus 175 to 200 basis points based on the Company achieving a net leverage ratio of 3.00 to 1.00. Total fees associated with the refinancing were approximately $1.8 million. The Company wrote-off $4.4 million of previously capitalized deferred debt issuance costs and original issue discount and expensed $1.8 million of new third-party fees. At August 3, 2019, the Company's net leverage ratio was less than 3.00 and the interest rate for the First Lien Term Loan was 5.08%. At February 2, 2019, the interest rate for the First Lien Term Loan was 5.51%. At August 4, 2018, the interest rate for the First Lien Term Loan was 5.60%. Principal payments on the First Lien Term Loan are required in quarterly installments of 0.25% of the original principal amount with the balance due upon maturity on February 3, 2024. Voluntary prepayments are permitted subject to premium payments. Principal payments must be made on the First Lien Term Loan pursuant to an annual excess cash flow calculation. The First Lien Term Loan is subject to certain affirmative and negative covenants but no financial 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. At August 3, 2019, there was $1,522.4 million outstanding on the First Lien Term Loan. At February 2, 2019, there was $1,530.0 million outstanding on the First Lien Term Loan. At August 4, 2018, there was $1,887.7 million outstanding on the First Lien Term Loan. Second Lien Term Loan On July 2, 2018, the Company paid off the Second Lien Term Loan by extinguishing the entire outstanding amount of $623.2 million. In connection with the debt extinguishment, the Company paid a $6.2 million prepayment premium. The Company recorded debt extinguishment charges of $19.2 million in conjunction with the pay down, of which $13.0 million represents the write-off of previously capitalized deferred debt issuance costs associated with the Second Lien Term Loan. |
Interest Expense, net |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Expense, net | Interest Expense, net The following details the components of interest expense for the periods presented (in thousands):
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Commitments and Contingencies |
6 Months Ended |
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Aug. 03, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to various claims and pending or threatened lawsuits in the normal course of business. The Company is not currently a party to any legal proceedings that it believes would have a material adverse impact on its financial position, results of operations, or cash flows. |
Contingently Redeemable Common Stock |
6 Months Ended |
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Aug. 03, 2019 | |
Temporary Equity [Abstract] | |
Contingently Redeemable Common Stock | Contingently Redeemable Common Stock The Company and certain current and former management employees were party to a Management Stockholders Agreement (the “MSA”). All grants of equity by the Company to the employees were governed by the terms of individual equity award agreements and the MSA through the date of the IPO. The MSA specified certain transfer restrictions, tag-along and drag-along rights, put and call rights and various other rights and restrictions applicable to any equity held by employees. The call right permitted the Company to repurchase common stock held by an employee stockholder following a minimum holding period and prior to the expiration of a specified time period following the later of the employee’s termination of employment with the Company or acquisition of the common stock. If the employee’s employment was terminated for cause, the repurchase price was the least of (a) the fair market value as of the repurchase date, (b) the fair market value at issuance or (c) the price paid by the employee stockholder for such shares. If the employee’s employment was terminated other than for cause, the repurchase price was the fair market value as of the repurchase date. The MSA also gave the employees the ability to put any shares back to the Company at fair market value upon death or disability while actively employed. As neither death nor disability while actively employed was a certainty, the shares of common stock held by the employee stockholders were considered to be contingently redeemable common stock and were accounted for outside of stockholders’ equity until the shares of common stock were either repurchased by the Company or the put right terminated. The contingently redeemable common stock was recorded at fair value of the common stock as of the date of issuance. Both the Company’s repurchase right, and the employee stockholder’s put right terminated upon the consummation of the IPO and reclassified all contingently redeemable common stock to common stock on the Company’s consolidated balance sheet. As of August 3, 2019, February 2, 2019 and August 4, 2018, there was no contingently redeemable common stock outstanding on the Company’s balance sheet. Prior to the IPO, when the Company exercised its call option to repurchase shares classified outside of stockholders’ equity, it was deemed to be a constructive retirement of the contingently redeemable share for accounting purposes. The Company recorded the excess of the fair value paid to repurchase the share over the carrying value of the contingently redeemable share within additional paid-in capital, as the Company had an accumulated deficit. |
Stock Incentive Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Stock Incentive Plans On June 13, 2018, the Company’s board of directors adopted, and its stockholders approved, the 2018 Incentive Award Plan (the “2018 Plan”). 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, respectively, under the Fourth Amended and Restated 2011 Stock Option Plan of BJ's Wholesale Club, Inc. ("2011 Plan") and the 2012 Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (“2012 Director Plan”). No further grants will be made under 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, 2011 Plan or 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 following shares may not be used again for grants 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 on 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. The following table summarizes the Company’s stock award activity during the twenty-six weeks ended August 3, 2019 (shares in thousands):
Stock-based compensation expense was $5.0 million and $51.2 million for the thirteen weeks ended August 3, 2019 and August 4, 2018, respectively. Stock-based compensation expense was $8.8 million and $52.1 million for the twenty-six weeks ended August 3, 2019 and August 4, 2018, respectively. In connection with the IPO, the Company's board of directors granted the following new awards to certain employees under the 2018 Plan, subject to vesting: stock options to purchase 2,510,263 shares of common stock, with an exercise price of $17.00 and restricted stock in the amount of 2,942,695 shares with a grant date fair value of $22.00, equivalent to the closing price of the first day of trading. Treasury Shares Acquired On June 27, 2019, the Company completed the CVC June 2019 Secondary Offering of 9,977,024 shares of the Company's common stock and, in connection with the offering, the Company repurchased 2,500,000 shares of common stock at a price of $25.41 per share. These repurchased shares are being held in treasury. In addition, 140,630 shares and 781,866 shares were reacquired to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the second quarter of fiscal 2019 and the second quarter of fiscal 2018, respectively. These reacquired shares were recorded as $3.7 million and $19.1 million of treasury stock in the second quarter of fiscal 2019 and the second quarter of fiscal 2018, respectively. |
Income Taxes |
6 Months Ended |
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Aug. 03, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate is based on estimated income from continuing operations for the fiscal year as well as discrete adjustments, if any, in the applicable quarterly periods. The Company projects the estimated annual effective tax rate for the fiscal year to be 27.0%, excluding the tax effect of discrete events. Potential discrete adjustments include tax charges or benefits related to 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 24.5% and 73.7% for the thirteen weeks ended August 3, 2019 and August 4, 2018, respectively; and 21.3% and 682.0% for the twenty-six weeks ended August 3, 2019 and August 4, 2018, respectively. The decrease in the effective tax rate for the second quarter of fiscal year 2019 compared to second quarter of fiscal year 2018 is due to pretax book income in the second quarter of fiscal year 2019 versus a pretax book loss in the second quarter of fiscal year 2018 netted with lower excess tax benefits from stock-based compensation in the second quarter of fiscal year 2019. We are subject to taxation in the U.S. federal and various state taxing jurisdictions. In general, the Company’s tax years from 2014 forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities; however, certain ongoing state audits and appeals relate to earlier periods. |
Fair Value Measurements |
6 Months Ended |
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Aug. 03, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date or “exit price.” The inputs used to measure fair value are generally classified into the following hierarchy: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not observable for the asset or liability. Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s debt was determined based on comparable quoted market prices and on borrowing rates available to the Company at August 3, 2019, February 2, 2019 and August 4, 2018. These inputs are considered to be Level 2. At August 3, 2019, the fair value of total debt was $1,760.0 million compared to a carrying value of $1,752.4 million. At February 2, 2019, the fair value of total debt was $1,805.9 million compared to a carrying value of $1,819.0 million. At August 4, 2018, the fair value of total debt was $1,982.7 million compared to a carrying value of $1,980.7 million. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table summarizes the computation of basic and diluted net income per share attributable to common stockholders:
Stock options and restricted shares of 740,655 and 539,991, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended August 3, 2019, because their inclusion would have been anti-dilutive. Stock options and restricted shares of 513,389 and 374,570, respectively, were excluded from the computation of diluted earnings for the twenty-six weeks ended August 3, 2019 because their inclusion would have been anti-dilutive. Similarly, stock options of 3,155,531 were excluded from the computation of diluted earnings for the twenty-six weeks ended August 4, 2018. |
Derivative Financial Instruments |
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Derivative Financial Instruments | Derivative Financial Instruments Interest Rate Swaps On November 13, 2018, the Company entered into three forward starting interest rate swaps (the "Interest Rate Swaps"), which became effective on February 13, 2019. The Company has fixed the LIBOR component of $1.2 billion of its floating rate debt at a rate of approximately 3.0%. At August 3, 2019 and February 2, 2019, the Interest Rate Swaps were recorded as a liability of $41.1 million and $19.4 million, respectively, with the net of tax amount recorded in other comprehensive income. The Company elected hedge accounting for the interest rate swap agreements, and as such, the effective portion of the gains and losses was recorded as a component of other comprehensive income. There were $16.0 million and $21.2 million of losses recorded in the thirteen and twenty-six weeks ended August 3, 2019, respectively, in other comprehensive income. There were no unrealized losses recorded in the thirteen and twenty-six weeks ended August 4, 2018. The fair values of derivative instruments included on the consolidated balance sheets are as follows (in thousands):
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Aug. 03, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim financial statements of BJ’s Wholesale Club Holdings, Inc. 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 generally accepted accounting principles in the United States of America ("GAAP"). The consolidated balance sheet as of February 2, 2019 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the second quarter of fiscal year 2019 are not necessarily indicative of future results or results to be expected for fiscal year 2019. The Company’s business, in common with the business of retailers generally, is subject to seasonal influences. The Company’s sales and operating income have typically been highest in the fourth quarter holiday season and lowest in the first quarter of each fiscal year. |
Initial Public Offering and Secondary Offerings | Initial Public Offering and Secondary Offerings On July 2, 2018, the Company completed its initial public offering ("IPO"), in which the Company issued and sold 43,125,000 shares of its common stock (including 5,625,000 shares of common stock that were subject to the underwriters’ option to purchase additional shares) at an initial public offering price of $17.00 per share. The Company received total aggregate proceeds of $685.9 million net of underwriters’ discounts, commissions and other transaction expenses, which totaled $47.2 million. On July 2, 2018, the Company used the net proceeds from the IPO to extinguish the total outstanding balance of $623.2 million of its senior secured second lien term loan facility (the “Second Lien Term Loan”). See Note 6, Debt and Credit Arrangements, for further discussion regarding the Second Lien Term Loan extinguishment. On October 1, 2018, certain selling stockholders completed a registered sale (the "October 2018 Secondary Offering") of 32,200,000 shares of the Company’s common stock at a public offering price of $26.00 per share. Of the 32,200,000 shares sold, 4,200,000 shares represented the underwriters’ exercise of their overallotment option. The Company did not receive any proceeds from this offering or incur underwriters’ discounts or commissions on the sale. The Company incurred transaction costs of $2.4 million primarily for legal, accounting and printer services related to the offering. On March 11, 2019, certain selling stockholders completed a registered sale (the "March 2019 Secondary Offering") of 19,550,000 shares of the Company's common stock at a public offering price of $25.08 per share. Of the 19,550,000 shares sold, 2,550,000 shares represented the underwriters’ exercise of their overallotment option. The Company did not receive any proceeds from the March 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred transaction costs of $1.2 million primarily for legal, accounting and printer services related to the offering. On June 6, 2019, certain selling stockholders completed a registered sale (the "June 2019 Secondary Offering") of 17,500,000 shares of the Company's common stock at a public offering price of $24.65 per share. The Company did not receive any proceeds from the June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the June 2019 Secondary Offering. On June 27, 2019, certain selling stockholders completed a registered sale (the "CVC June 2019 Secondary Offering") of 9,977,024 shares of the Company's common stock at a price of $25.41 per share. In connection with this offering, the Company repurchased 2,500,000 shares at $25.41 per share. The Company did not receive any proceeds from the CVC June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the CVC June 2019 Secondary Offering. |
Stock Split | Stock Split On June 15, 2018, the Company effected a seven-to-one stock split of its issued and outstanding shares of common stock and proportional adjustment to the existing conversion ratios for each series of the Company’s Contingently Redeemable Common Stock (see Note 9). Accordingly, all shares and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the contingently redeemable common stock conversion ratios. |
Deferred Offering Costs | Deferred Offering Costs The Company capitalized certain legal, professional, accounting and other third-party fees that were directly associated with the IPO as deferred offering costs. Upon the consummation of the IPO, $47.2 million was recorded in stockholders’ deficit as a reduction of additional paid-in capital. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2018. There have been no material changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal year 2019. Leases (ASU 2016-2) In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-2, Leases (FASB Accounting Standards Codification (“ASC”) Topic 842, Leases) which requires recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet. The Company adopted ASC 842 using the modified retrospective method at the beginning of fiscal year 2019. In accordance with ASC 842, the Company did not recast comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of $2.040 billion of operating lease right-of-use (“ROU”) assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the ROU assets. Finance leases were not impacted by the adoption of the new guidance as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not have a material impact on the Company’s interim unaudited consolidated statements of operations and comprehensive income, statements of contingently redeemable common stock and stockholders’ deficit or cash flows, and had a $11.6 million impact on beginning retained earnings in fiscal year 2019 primarily associated with the impact of the Company's deferred gain on prior years' sale leaseback transactions, net of tax. The Company elected the transition package of practical expedients permitted within the new standard which, among other things, allowed it to carry-forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of ROU assets and therefore continued to utilize lease terms determined under previous lease guidance. Please refer to Note 4 – Leases for further discussion on the Company's leases. Non-Employee Share-Based Compensation (ASU 2018-07) In June 2018, the FASB issued ASU 2018-07 Improvements to Non-employee Share-Based Payment Accounting which updates the guidance to Compensation—Stock Compensation (Topic 718). The updated guidance aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees, with certain exceptions. The Company adopted ASU 2018-07 at the beginning of fiscal year 2019 and the adoption of this standard did not have a material impact on its consolidated financial statements. Recently Issued Accounting Pronouncements Fair Value Measurement (ASU 2018-13) In August 2018, the FASB issued ASU 2018-13 Changes to the Disclosure Requirements for Fair Value Measurement which updates the guidance to Fair Value Measurement (Topic 820). The updated guidance modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The updated guidance is effective for fiscal periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company does not anticipate the updated guidance will have a material impact on its consolidated financial statements. Intangibles-Goodwill and Other-Internal-Use Software (ASU 2018-15) In August 2018, the FASB issued ASU 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The update related to accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update allows entities who are customers in hosting arrangements that are service contracts to apply the existing internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The update specifies classification for capitalizing implementation costs and related amortization expense within the financial statements and requires additional disclosures. The updated guidance is effective for fiscal reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted and can be applied either retrospectively or prospectively. The Company is currently evaluating the transition methods and the impact of the adoption of this standard on its consolidated financial statements. Goodwill Impairment (ASU 2017-04) In January 2017, the FASB issued ASU 2017-04, which provides amendments to ASC 350, "Intangibles - Goodwill and Other", to eliminate Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company does not believe adoption of this standard will have a material effect on its consolidated financial statements. Credit Losses (ASU 2016-13) In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 will replace the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, an entity will recognize a loss (or allowance) upon initial recognition of the asset that reflects all future events that will lead to a loss being realized, regardless of whether it is probable that the future event will occur. The "incurred loss" model considers past events and current conditions, while the "expected loss" model includes expectations for the future which have yet to occur. ASU 2016-13 is effective for public companies for fiscal years beginning after December 15, 2019 with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods therein. The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company does not believe adoption of this standard will have a material impact on its consolidated financial statements. |
Revenue Recognition (Tables) |
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Summary of Disaggregation of Revenue | The following table summarizes the Company’s percentage of net sales disaggregated by category for the thirteen weeks ended August 3, 2019 and August 4, 2018, respectively.
The following table summarizes the Company’s percentage of net sales disaggregated by category for the twenty-six weeks ended August 3, 2019 and August 4, 2018, respectively.
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Leases (Tables) |
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Components of net lease cost and other information | The following table is a summary of the Company’s components of total lease costs for the thirteen and twenty-six weeks ended August 3, 2019, respectively (in thousands):
The weighted average remaining lease term and weighted average discount rate for operating and finance leases as of August 3, 2019 were as follows:
Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):
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Maturities of operating lease liabilities | Future lease commitments to be paid by the Company as of August 3, 2019 were as follows (in thousands):
(a) Represents the remainder of fiscal year 2019 which excludes the twenty-six weeks ended August 3, 2019. |
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Maturities of finance lease liabilities | Future lease commitments to be paid by the Company as of August 3, 2019 were as follows (in thousands):
(a) Represents the remainder of fiscal year 2019 which excludes the twenty-six weeks ended August 3, 2019. |
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Lease commitments operating leases | The following table represents the Company's lease commitments under its previous presentation of its operating and finance lease agreements as of February 2, 2019 (in thousands):
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Lease commitments capital leases | The following table represents the Company's lease commitments under its previous presentation of its operating and finance lease agreements as of February 2, 2019 (in thousands):
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Debt and Credit Arrangements (Tables) |
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Schedule of Debt | Debt consisted of the following at August 3, 2019, February 2, 2019 and August 4, 2018 (in thousands):
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Interest Expense, net (Tables) |
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Interest Expense | The following details the components of interest expense for the periods presented (in thousands):
|
Stock Incentive Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Company's Stock Award Activity | The following table summarizes the Company’s stock award activity during the twenty-six weeks ended August 3, 2019 (shares in thousands):
|
Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of basic and diluted net income per share attributable to common stockholders | The following table summarizes the computation of basic and diluted net income per share attributable to common stockholders:
|
Derivative Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Aug. 03, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Values of Derivative Instruments | The fair values of derivative instruments included on the consolidated balance sheets are as follows (in thousands):
|
Description of Business (Detail) - Aug. 03, 2019 |
state |
warehouse_club |
gas_station |
---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of warehouses operated | 217 | 140 | |
Number of states in country | 16 |
Revenue Recognition - Remaining Performance Obligations (Details) - BJ's Perks Rewards - royalty revenue - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-04 $ in Millions |
Aug. 03, 2019
USD ($)
|
---|---|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized | $ 9.5 |
Revenue expected to be recognized, period | 6 months |
Revenue Recognition - Summary of Disaggregation of Revenue (Detail) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
Aug. 04, 2018 |
|
Edible Grocery | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 23.00% | 23.00% | 23.00% | 23.00% |
Perishables | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 29.00% | 29.00% | 28.00% | 29.00% |
Non-Edible Grocery | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 20.00% | 21.00% | 21.00% | 21.00% |
General Merchandise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 15.00% | 13.00% | 14.00% | 13.00% |
Gasoline and Other Ancillary Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue recognized | 13.00% | 14.00% | 14.00% | 14.00% |
Leases - Components of Net Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Aug. 03, 2019 |
Aug. 03, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 81,327 | $ 159,761 |
Finance lease cost: | ||
Amortization of right-of-use assets | 282 | 564 |
Interest on lease liabilities | 628 | 1,259 |
Total finance lease costs | 910 | 1,823 |
Variable lease costs | 0 | 93 |
Net lease costs | $ 82,237 | $ 161,677 |
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) |
Aug. 03, 2019 |
---|---|
Operating Leases | |
Weighted average remaining lease term in years | 9 years 2 months 12 days |
Weighted average discount rate percentage | 8.30% |
Finance Leases | |
Weighted average remaining lease term in years | 9 years 9 months 6 days |
Weighted average discount rate percentage | 8.30% |
Leases - Cash Paid For Amounts Included in the Measurement of Lease Liabilities (Details) $ in Thousands |
6 Months Ended |
---|---|
Aug. 03, 2019
USD ($)
| |
Leases [Abstract] | |
Operating cash flows paid for operating leases | $ 154,980 |
Operating cash flows paid for interest portion of finance leases | 1,259 |
Financing cash flows paid for principal portion of finance leases | $ 298 |
Leases - Maturities of Operating and Finance Lease Liabilities (Details) $ in Thousands |
Aug. 03, 2019
USD ($)
|
---|---|
Operating Leases | |
2019 | $ 131,243 |
2020 | 311,318 |
2021 | 305,401 |
2022 | 289,964 |
2023 | 271,653 |
Thereafter | 1,818,427 |
Total future minimum operating lease payments | 3,128,006 |
Less: imputed interest | (1,052,037) |
Present value of operating lease liabilities | 2,075,969 |
Finance Leases | |
Remainder of 2019 | 1,298 |
2020 | 3,412 |
2021 | 3,439 |
2022 | 3,439 |
2023 | 3,439 |
Thereafter | 20,281 |
Total future minimum operating lease payments | 35,308 |
Less: imputed interest | (18,779) |
Present value of operating lease liabilities | $ 16,529 |
Leases - Future Minimum Payments Due (Details) $ in Thousands |
Feb. 02, 2019
USD ($)
|
---|---|
Operating Leases | |
2019 | $ 309,785 |
2020 | 310,956 |
2021 | 299,410 |
2022 | 282,841 |
2023 | 264,363 |
Thereafter | 1,778,207 |
Total | 3,245,562 |
Finance Leases | |
2019 | 4,510 |
2020 | 4,807 |
2021 | 4,833 |
2022 | 4,894 |
2023 | 4,956 |
Thereafter | 34,377 |
Total | $ 58,377 |
Related Party Transactions (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
Aug. 04, 2018 |
|
Management Service | ||||
Related Party Transaction [Line Items] | ||||
Aggregate payment of management fees per year, plus out of pocket expenses | $ 8,000,000 | |||
Costs for services rendered | 0 | $ 1,300,000 | $ 0 | $ 3,300,000 |
Advantage Solutions Inc. | ||||
Related Party Transaction [Line Items] | ||||
Costs for services rendered | $ 10,600,000 | $ 10,400,000 | $ 22,400,000 | $ 22,000,000 |
Debt and Credit Arrangements - Schedule of Debt (Detail) - USD ($) $ in Thousands |
Aug. 03, 2019 |
Feb. 02, 2019 |
Aug. 04, 2018 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Debt instrument carrying amount | $ 1,752,400 | $ 1,819,000 | $ 1,980,700 |
Unamortized debt discount and debt issuance cost | (16,377) | (18,197) | (24,413) |
Less: current portion | (195,377) | (254,377) | (62,250) |
Long-term debt | 1,540,602 | 1,546,471 | 1,894,071 |
ABL Facility | |||
Debt Instrument [Line Items] | |||
Credit facility, borrowed | 230,000 | 289,000 | 93,000 |
First Lien Term Loan | |||
Debt Instrument [Line Items] | |||
Debt instrument carrying amount | $ 1,522,356 | $ 1,530,045 | $ 1,887,734 |
Interest Expense, net (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
Aug. 04, 2018 |
|
Other Income and Expenses [Abstract] | ||||
Interest on debt | $ 24,847 | $ 37,633 | $ 50,698 | $ 79,762 |
Interest on capital lease and financing obligations | 628 | 1,041 | 1,259 | 2,085 |
Debt issuance costs amortization | 696 | 915 | 1,392 | 1,930 |
Original issue discount amortization | 627 | 878 | 1,254 | 1,979 |
Loss on debt extinguishment | 0 | 19,159 | 0 | 19,159 |
Capitalized interest | (15) | (71) | (31) | (157) |
Interest expense, net | $ 26,783 | $ 59,555 | $ 54,572 | $ 104,758 |
Contingently Redeemable Common Stock (Detail) - USD ($) |
Aug. 03, 2019 |
May 04, 2019 |
Feb. 02, 2019 |
Aug. 04, 2018 |
May 05, 2018 |
Feb. 03, 2018 |
---|---|---|---|---|---|---|
Temporary Equity [Abstract] | ||||||
Contingently redeemable common stock | $ 0 | $ 0 | $ 0 | $ 0 | $ 13,202,000 | $ 10,438,000 |
Income Taxes (Detail) |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
Aug. 04, 2018 |
Feb. 01, 2020 |
|
Income Tax Disclosure [Line Items] | |||||
Effective income tax rate | 24.50% | 73.70% | 21.30% | 682.00% | |
Scenario, Forecast | |||||
Income Tax Disclosure [Line Items] | |||||
Effective income tax rate | 27.00% |
Fair Value Measurements (Detail) - USD ($) $ in Millions |
Aug. 03, 2019 |
Feb. 02, 2019 |
Aug. 04, 2018 |
---|---|---|---|
Fair Value Disclosures [Abstract] | |||
Fair value of total debt | $ 1,760.0 | $ 1,805.9 | $ 1,982.7 |
Carrying value of debt | $ 1,752.4 | $ 1,819.0 | $ 1,980.7 |
Earnings Per Share - Summary of Basic and Diluted Net Income Per Share Attributable to Common Stockholders (Detail) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
Aug. 04, 2018 |
|
Earnings Per Share [Abstract] | ||||
Weighted-average common shares outstanding, used for basic computation (in shares) | 136,570,834 | 106,914,966 | 136,690,459 | 97,734,132 |
Plus: Incremental shares of potentially dilutive securities (in shares) | 2,945,487 | 0 | 3,298,988 | 4,997,608 |
Weighted-average number of common and dilutive potential common shares outstanding (in shares) | 139,516,321 | 106,914,966 | 139,989,447 | 102,731,740 |
Earnings Per Share - Additional Information (Detail) - shares |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Aug. 03, 2019 |
Aug. 04, 2018 |
Aug. 03, 2019 |
|
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock options not included in the computation of diluted earnings (in shares) | 740,655 | 3,155,531 | 513,389 |
Restricted stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock options not included in the computation of diluted earnings (in shares) | 539,991 | 374,570 |
Derivative Financial Instruments - Additional Information (Details) - Interest rate swaps |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Nov. 13, 2018
derivative_instrument
|
Aug. 03, 2019
USD ($)
|
Aug. 04, 2018
USD ($)
|
Aug. 03, 2019
USD ($)
|
Aug. 04, 2018
USD ($)
|
Feb. 13, 2019
USD ($)
|
Feb. 02, 2019
USD ($)
|
|
Derivative [Line Items] | |||||||
Number of derivative instruments entered | derivative_instrument | 3 | ||||||
Amount of hedged item | $ 1,200,000,000 | ||||||
Average fixed interest rate | 3.00% | ||||||
Derivative liability | $ 41,059,000 | $ 41,059,000 | $ 19,400,000 | ||||
Unrealized losses | $ (16,000,000) | $ 0 | $ (21,200,000) | $ 0 |
Derivative Financial Instruments - Fair Values of Derivative Instruments (Details) - Designated as hedging instrument - USD ($) $ in Thousands |
Aug. 03, 2019 |
Feb. 02, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 1,200,000 | |
Total liabilities | $ (19,410) | |
Interest rate swap 1 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 600,000 | |
Fixed Rate | 3.00% | |
Interest rate swap 1 | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total liabilities | $ (20,549) | (9,730) |
Interest rate swap 2 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 360,000 | |
Fixed Rate | 3.00% | |
Interest rate swap 2 | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total liabilities | $ (12,303) | (5,804) |
Interest rate swap 3 | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 240,000 | |
Fixed Rate | 3.00% | |
Interest rate swap 3 | Other non-current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total liabilities | $ (8,207) | $ (3,876) |
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