10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 10-Q

_________________

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 2, 2020

OR

☐      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 001-38559

_________________

BJ’S WHOLESALE CLUB HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

_________________

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)

(774) 512-7400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of May 22, 2020, the registrant had 138,606,855 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	6
Item 1.	Financial Statements (Unaudited)	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations and Comprehensive Income	7
	Consolidated Statements of Stockholders’ Equity (Deficit)	8
	Consolidated Statements of Cash Flows	9
	Notes to Unaudited Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
	Signatures	30

3

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q should be considered forward-looking statements, including, without limitation, statements regarding our future results of operations and financial position, business strategy, transformation, strategic priorities and future progress, including expectations regarding deferred revenue, lease commencement dates, impact of infrastructure investments on our operating model and selling, general and administrative expenses, sales of gasoline and gross profit margin rates, and new club and gas station openings, as well as statements that include terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "project," "believe," "estimate," "predict," "continue," "forecast," "would," or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to:

• uncertainties in the financial markets and the effect of certain economic conditions or events on consumer and small business spending patterns and debt levels;

• risks related to our dependence on having a large and loyal membership;

• the effects of competition in, and regulation of, the retail industry;

• our dependence on vendors to supply us with quality merchandise at the right time and at the right price;

• risks related to our substantial indebtedness;

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

• the risks and uncertainties related to the impact of the novel coronavirus (COVID-19) pandemic, including the duration, scope and severity of the pandemic, federal, state and local government actions or restrictive measures implemented in response to COVID-19, the effectiveness of such measures and the direct and indirect impact of such measures;

• risks related to climate change and natural disasters;

• our ability to identify and respond effectively to consumer trends, including our ability to successfully maintain a relevant omnichannel experience for our members;

• risks related to cybersecurity, which may be heightened due to our e-commerce business, including our ability to protect the privacy of member or business information and the security of payment card information;

• our ability to attract and retain a qualified management team and other team members;

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

• the other risk factors identified in our filings with the Securities and Exchange Commission, including in particular those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020 (the "Annual Report on Form 10-K for the fiscal year 2019") and this Quarterly Report on Form 10-Q.

Given these uncertainties, you should not place undue reliance on any forward-looking statements.  Except as required by applicable law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, and you should not rely upon these forward-looking statements after the date of this Quarterly Report on Form 10-Q.

4

TRADEMARKS

BJ’s Wholesale Club^®, BJ’s^®, Wellsley Farms^®, Berkley Jensen^®, My BJ’s Perks^®, BJ’s Easy Renewal^®, BJ’s Gas^®, BJ’s Perks Elite^®, BJ’s Perks Plus^®, Inner Circle^® and BJ’s Perks Rewards^® are all registered trademarks of BJ’s Wholesale Club, Inc. Other trademarks, tradenames and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. We do not intend our use or display of those other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. Solely for convenience, trademarks, trade names and service marks referred to in this Quarterly Report on Form 10-Q may appear without the ^®, ^™ or ^SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks.

DEFINED TERMS

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires:

• "the Company," "BJ’s," "we," "us" and "our" mean BJ’s Wholesale Club Holdings, Inc. and, unless the context otherwise requires, its consolidated subsidiaries;

• "Sponsors" means investment funds affiliated with or advised by CVC Capital Partners ("CVC") and Leonard Green & Partners, L.P ("Leonard Green");

• "ABL Facility" means the Company's senior secured asset based revolving credit and term facility;

• "First Lien Term Loan" means the Company's senior secured first lien term loan facility;

• "fiscal year 2019" means the 52 weeks ended February 1, 2020; and

• "fiscal year 2020" means the 52 weeks ended January 30, 2021.

5

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

(Unaudited)

	May 2, 2020			February 1, 2020			May 4, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	132,915		$	30,204		$	29,877
Accounts receivable, net	193,884			206,353			180,379
Merchandise inventories	1,024,937			1,081,502			1,085,565
Prepaid expenses and other current assets	46,631			41,961			47,403
Total current assets	1,398,367			1,360,020			1,343,224
Operating lease right-of-use assets, net	2,087,902			2,060,059			2,055,733
Property and equipment:
Land and buildings	383,915			375,375			381,041
Leasehold costs and improvements	215,878			214,209			204,742
Furniture, fixtures and equipment	1,170,139			1,135,892			1,067,448
Construction in progress	37,781			51,741			14,427
	1,807,713			1,777,217			1,667,658
Less: accumulated depreciation and amortization	(1,054,416		)	(1,017,009		)	(938,896		)
Total property and equipment, net	753,297			760,208			728,762
Goodwill	924,134			924,134			924,134
Intangibles, net	144,019			146,985			157,103
Other assets	20,350			18,374			17,760
Total assets	$	5,328,069		$	5,269,780		$	5,226,716
LIABILITIES
Current liabilities:
Current portion of long-term debt	$	15,377		$	343,377		$	246,377
Current portion of operating lease liabilities	125,976			123,751			121,878
Accounts payable	990,420			786,412			820,489
Accrued expenses and other current liabilities	588,431			547,876			485,168
Total current liabilities	1,720,204			1,801,416			1,673,912
Long-term operating lease liabilities	2,016,206			1,986,790			1,966,688
Long-term debt	1,334,795			1,337,308			1,543,537
Deferred income taxes	42,369			46,200			44,934
Other non-current liabilities	181,998			152,410			145,954
Commitments and Contingencies (see Note 7)
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock; par value $0.01; 5,000 shares authorized, and no shares issued or outstanding	—			—			—
Common stock, par value $0.01; 300,000 shares authorized, 142,349 shares issued and 138,666 outstanding at May 2, 2020; 140,723 shares issued and 137,298 outstanding at February 1, 2020; and 139,836 shares issued and 139,054 outstanding at May 4, 2019	1,423			1,407			1,398
Additional paid-in capital	784,724			773,618			752,218
Accumulated deficit	(620,635		)	(716,369		)	(867,746		)
Accumulated other comprehensive loss	(40,528		)	(26,586		)	(15,070		)
Treasury stock, at cost, 3,683 shares at May 2, 2020; 3,425 shares at February 1, 2020; 782 shares and May 4, 2019	(92,487		)	(86,414		)	(19,109		)
Total stockholders’ equity (deficit)	32,497			(54,344		)	(148,309		)
Total liabilities and stockholders’ equity (deficit)	$	5,328,069		$	5,269,780		$	5,226,716

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

6

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Amounts in thousands, except per share amounts)

(Unaudited)

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
Net sales	$	3,718,040		$	3,069,763
Membership fee income	79,565			73,373
Total revenues	3,797,605			3,143,136
Cost of sales	3,060,893			2,568,977
Selling, general and administrative expenses	590,361			501,181
Pre-opening expense	2,601			2,296
Operating income	143,750			70,682
Interest expense, net	21,844			27,789
Income from continuing operations before income taxes	121,906			42,893
Provision for income taxes	26,164			6,808
Income from continuing operations	95,742			36,085
Loss from discontinued operations, net of income taxes	(8		)	(287		)
Net income	$	95,734		$	35,798
Income per share attributable to common stockholders—basic:
Income from continuing operations	$	0.70		$	0.26
Loss from discontinued operations	—			—
Net income	$	0.70		$	0.26
Income per share attributable to common stockholders—diluted:
Income from continuing operations	$	0.69		$	0.26
Loss from discontinued operations	—			(0.01		)
Net income	$	0.69		$	0.25
Weighted average number of common shares outstanding:
Basic	136,090			136,810
Diluted	138,428			140,463
Other comprehensive loss:
Unrealized loss on cash flow hedge, net of income tax of $5,421 and $1,460, respectively	$	(13,942	)	$	(3,755	)
Total other comprehensive loss	$	(13,942	)	$	(3,755	)
Total comprehensive income	$	81,792		$	32,043

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

7

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Amounts in thousands)

(Unaudited)

	Common Stock			Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock					Total Stockholders’ Equity (Deficit)
	Shares	Amount											Shares		Amount
Balance, February 1, 2020	140,723	$	1,407	$	773,618		$	(716,369	)	$	(26,586	)	(3,425	)	$	(86,414	)	$	(54,344	)
Net income	—	—		—			95,734			—			—		—			95,734
Unrealized loss on cash flow hedge, net of tax	—	—		—			—			(13,942		)	—		—			(13,942		)
Common stock issued under stock incentive plans	1,626	16		(16		)	—			—			—		—			—
Stock compensation expense	—	—		5,514			—			—			—		—			5,514
Net cash received on option exercises	—	—		5,608			—			—			—		—			5,608
Treasury stock purchases	—	—		—			—			—			(258	)	(6,073		)	(6,073		)
Balance, May 2, 2020	142,349	$	1,423	$	784,724		$	(620,635	)	$	(40,528	)	(3,683	)	$	(92,487	)	$	32,497

	Common Stock			Additional Paid-in Capital				Accumulated Deficit			Accumulated Other Comprehensive Loss			Treasury Stock						Total Stockholders’ Equity (Deficit)
	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, 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	)

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

8

BJ’S WHOLESALE CLUB HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	95,734		$	35,798
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	40,839			38,670
Amortization of debt issuance costs and accretion of original issue discount	1,197			1,323
Other non-cash items, net	2,637			287
Stock-based compensation expense	5,514			3,844
Deferred income tax provision	1,590			4,501
Increase (decrease) in cash due to changes in:
Accounts receivable	12,469			13,921
Merchandise inventories	56,565			(33,259		)
Prepaid expenses and other current assets	(200		)	20,913
Other assets	(1,389		)	(436		)
Accounts payable	204,008			3,609
Accrued expenses	40,983			(45,926		)
Other non-current liabilities	9,955			1,691
Net cash provided by operating activities	469,902			44,936
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net of disposals	(35,212		)	(36,534		)
Net cash used in investing activities	(35,212		)	(36,534		)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long term debt	(3,297		)	(3,844		)
Proceeds from ABL Facility	736,000			245,000
Payments on ABL Facility	(1,064,000		)	(253,000		)
Net cash received from stock option exercises	5,608			6,320
Acquisition of treasury stock	(6,073		)	—
Other financing activities	(217		)	(147		)
Net cash used in financing activities	(331,979		)	(5,671		)
Net increase in cash and cash equivalents	102,711			2,731
Cash and cash equivalents at beginning of period	30,204			27,146
Cash and cash equivalents at end of period	$	132,915		$	29,877
Supplemental cash flow information:
Interest paid	$	18,418		$	25,018
Income taxes paid	3,872			2,965
Non-cash financing and investing activities:
Lease liabilities arising from obtaining right-of-use assets	65,893			49,440
Property additions included in accrued expenses	21,734			26,284

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

9

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

BJ’s Wholesale Club Holdings, Inc. and its wholly owned subsidiaries is a leading warehouse club operator in the eastern United States. As of May 2, 2020, the Company operated 218 warehouse clubs and 145 gas stations in 17 states.

The Company follows, and reports based on the National Retail Federation’s fiscal calendar. The thirteen week periods ended May 2, 2020 and May 4, 2019 are referred to as the "first quarter of fiscal year 2020" and the "first quarter of fiscal year 2019," respectively.

The coronavirus disease 2019 (“COVID-19”) pandemic has severely impacted the economies of the U.S. and other countries around the world. In the preparation of these financial statements and related disclosures we have assessed the impact that COVID-19 has had on our estimates, assumptions and accounting policies and made additional disclosures, as necessary.

2. 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 1, 2020 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the first quarter of fiscal year 2020 are not necessarily indicative of future results or results to be expected for fiscal year 2020. 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 2019, as filed with the Securities and Exchange Commission (the "SEC") on March 19, 2020.

Reclassification

We adjusted the statement of cash flows for the first quarter of fiscal year 2020 to reclassify the change in book overdraft amounts into the accounts payable and accrued expenses line items, all within net cash provided by operating activities.    

Recently Adopted Accounting Pronouncements

The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2019. 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 2020.

Fair Value Measurement (ASU 2018-13)

In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("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 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 adopted ASU 2018-13 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

10

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. The Company adopted this standard at the beginning of fiscal year 2020 on a prospective basis. The adoption of this standard had no material impact on the Company's consolidated financial statements.

Goodwill Impairment (ASU 2017-04)

In January 2017, the FASB issued ASU 2017-04, which provides amendments to Accounting Standards Codification ("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 Company adopted ASU 2017-04 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's 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 changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 replaces 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 recognizes 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. The Company adopted ASU 2016-13 at the beginning of fiscal year 2020 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform (ASU 2020-04)

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

3. 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, represented approximately 96% of the Company’s net sales and approximately 94% of the Company’s total revenues for the thirteen weeks ended May 2, 2020. 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.

11

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 up to 5% cash back on eligible purchases made at BJ’s and up to 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 $28.6 million at May 2, 2020, $26.7 million at February 1, 2020 and $27.6 million at May 4, 2019.

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 $14.8 million, $14.8 million and $13.3 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively. The timing of revenue recognition of these awards dollars is driven by actual customer activities, such as redemptions and expirations. As of May 2, 2020, the Company expects to recognize $13.0 million of the deferred revenue in fiscal year 2020, 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 $157.6 million, $144.0 million and $141.6 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively.

Gift Card Program—The Company sells BJ’s gift cards that allow customers 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 in proportion to its rate of gift card redemptions because the Company’s performance obligation to redeem the gift card for merchandise is satisfied when the gift card is redeemed. The Company also recognizes breakage in proportion to its rate of gift card redemptions. Deferred revenue related to gift cards was $9.8 million, $10.3 million and $8.0 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively. The Company recognized $10.2 million and $11.1 million of revenue from gift card redemptions in the first quarter of fiscal year 2020 and first quarter of fiscal year 2019, respectively.

Disaggregation of Revenue

The Company’s club retail operations, which represent substantially all of its 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:

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Grocery (1)	81%	74%
General Merchandise & Services	11%	13%
Gasoline and Other	8%	13%

(1) Grocery division includes the legacy perishables, edible grocery and non-edible grocery division.

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4. Related Party Transactions

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 $9.4 million and $11.8 million of costs payable to Advantage Solutions Inc. for services rendered during the thirteen weeks ended May 2, 2020 and May 4, 2019, 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.

5. Debt and Credit Arrangements

Debt consisted of the following at May 2, 2020, February 1, 2020 and May 4, 2019 (in thousands):

	May 2, 2020			February 1, 2020			May 4, 2019
ABL Facility	$	50,000		$	378,000		$	281,000
First Lien Term Loan	1,311,919			1,315,216			1,526,201
Unamortized debt discount and debt issuance cost	(11,747		)	(12,531		)	(17,287		)
Less: current portion	(15,377		)	(343,377		)	(246,377		)
Long-term debt	$	1,334,795		$	1,337,308		$	1,543,537

ABL Facility

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 agreement governing the ABL Facility (the "ABL 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, which is scheduled to mature on August 17, 2023.

At May 2, 2020, there was $50.0 million outstanding in loans under the ABL Facility and $22.1 million in outstanding letters of credit. As of May 2, 2020, the interest rate on the revolving credit facility was 1.45%, and unused capacity was $770.6 million.

At February 1, 2020, there was $378.0 million outstanding in loans under the ABL Facility and $17.5 million in outstanding letters of credit. As of February 1, 2020, the interest rate on the revolving credit facility was 2.78%, and unused capacity was $496.3 million.

At May 4, 2019, there was $281.0 million outstanding in loans under the ABL Facility and $29.2 million in outstanding letters of credit. As of May 4, 2019, the interest rate on the revolving credit facility was 3.73%, and unused capacity was $560.8 million.

First Lien Term Loan

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

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On November 1, 2019, the Company borrowed $200.0 million from the ABL Facility. The proceeds from the Company's borrowing were used to pay a portion of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $2.0 million of previously capitalized deferred debt issuance costs and original issue discount.

On January 29, 2020, the Company amended its First Lien Term Loan to reduce the applicable interest rates. As amended, the First Lien Term Loan has an initial principal amount of $1,315.2 million and interest is calculated either at LIBOR plus 225 basis points or a base rate plus 125 basis points. Total fees associated with the refinancing were approximately $1.7 million. The Company wrote-off $0.1 million of previously capitalized debt issuance costs and original issue discount and expensed $1.7 million of new third-party fees.

At May 2, 2020, there was $1,311.9 million outstanding on the First Lien Term Loan. At February 1, 2020, there was $1,315.2 million outstanding on the First Lien Term Loan. At May 4, 2019, there was $1,526.2 million outstanding on the First Lien Term Loan. At May 2, 2020, the Company's net leverage ratio was less than 2.00 and the interest rate for the First Lien Term Loan was 3.08%. At February 1, 2020, the interest rate for the First Lien Term Loan was 3.90%. At May 4, 2019, the interest rate for the First Lien Term Loan was 5.47%.

6. Interest Expense, net

The following details the components of interest expense for the periods presented (in thousands):

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
Interest on debt	$	19,643		$	25,851
Interest on capital lease and financing obligations	1,008			631
Debt issuance costs amortization	657			696
Original issue discount amortization	539			627
Capitalized interest	(3		)	(16		)
Interest expense, net	$	21,844		$	27,789

7. Commitments and Contingencies

The Company is involved in various legal proceedings that are typical of a retail business. In accordance with applicable accounting guidance, an accrual will be established for legal proceedings if and when those matters present loss contingencies that are both probable and estimable. The Company does not believe the resolution of any current proceedings will result in a material loss to the consolidated financial statements.

8. Stock Incentive Plans

On June 13, 2018, the Company’s board of directors adopted, and its stockholders approved, the BJ's Wholesale Club Holdings, Inc. 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. (f/k/a Beacon Holding Inc.), as amended (the "2011 Plan") and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holding, Inc.), as amended (the "2012 Director Plan"). No further grants will be made under the 2011 Plan or the 2012 Director Plan.

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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 grant under the 2018 Plan: (1) shares subject to a stock appreciation right ("SAR") that are not issued in connection with the stock settlement of the SAR upon its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan or 2012 Director Plan. As of May 2, 2020, there were 5,687,534 shares available for future issuance under the 2018 Plan.

The following table summarizes the Company’s stock award activity during the thirteen weeks ended May 2, 2020 (shares in thousands):

	Stock Options				Restricted Stock				Restricted Stock Units			Performance Stock
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding, February 1, 2020	5,213		$	14.00	1,445		$	25.22	30	$	25.83	—	$	—
Granted	441		25.07		683		25.07		2	20.52		527	23.96
Forfeited/canceled	(26	)	20.07		(26	)	24.29		—	—		—	—
Exercised/vested	(969	)	6.03		(254	)	25.07		—	—		—	—
Outstanding, May 2, 2020	4,659		$	16.67	1,848		$	24.85	32	$	25.41	527	$	23.96

Stock-based compensation expense was $5.5 million and $3.8 million for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively.

Employee Stock Purchase Plan

On June 14, 2018, the Company’s board of directors adopted and its stockholders approved the BJ's Wholesale Club Holdings, Inc. Employee Stock Purchase Plan (the "ESPP"), which became effective the day prior to the first day of public trading of the Company’s equity securities. The aggregate number of shares of common stock that were to be reserved for issuance under the ESPP was to be equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the board of directors. The offering under the ESPP commenced on January 1, 2019. As of May 2, 2020, 1,857,062 shares remained available for issuance. The amount of expense recognized for the thirteen weeks ended May 2, 2020 and May 4, 2019 was $0.1 million and $0.2 million, respectively.

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, 83,353 shares were reacquired to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended May 2, 2020 and no shares were reacquired in the thirteen weeks ended May 4, 2019. These reacquired shares were recorded as $2.1 million of treasury stock for the thirteen weeks ended May 2, 2020.

Share Repurchase Program

On December 19, 2019, the Company's board of directors authorized the repurchase of up to $250.0 million of the Company's outstanding common stock from time to time as market conditions warrant (the "Program"). The Program expires at the end of fiscal year 2021. The Company initiated the Program to mitigate potentially dilutive effects of stock options and shares of restricted stock granted by the Company, in addition to enhancing shareholder value. As of May 2, 2020, $246.0 million remained available to purchase under the Program. The Company repurchased 175,000 shares for $4.0 million during the first quarter of fiscal year 2020.

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9. Income Taxes

The Company projects the estimated annual effective tax rate for fiscal year 2020 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 21.5% and 15.9% for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively. The effective tax rate for the first quarter of fiscal year 2020 differs from our annual effective tax rate primarily due to excess tax benefits from stock-based compensation in the first quarter which reduced the effective tax rate by 3.7% and increase of prior year enhanced charitable contributions in the same period which reduced the effective tax rate by 1.6%.

We are subject to taxation in the U.S. federal and various state taxing jurisdictions. In general, the Company’s tax years from 2015 forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities.

10. 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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair values of the Company’s derivative instruments are based on quotes received from third-party banks and represent the estimated amount the Company would pay to terminate the agreements taking into consideration current interest rates as well as the creditworthiness of the counterparties. These inputs are considered to be Level 2.

Financial Assets and Liabilities

The gross carrying amount and fair value of the Company’s debt at May 2, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,311,919	$	1,268,758
ABL Facility	50,000		50,000
Total Debt	$	1,361,919	$	1,318,758

The gross carrying amount and fair value of the Company’s debt at February 1, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,315,216	$	1,319,990
ABL Facility	378,000		378,000
Total Debt	$	1,693,216	$	1,697,990

The gross carrying amount and fair value of the Company’s debt at May 4, 2019 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,526,200	$	1,532,800
ABL Facility	281,000		281,000
Total Debt	$	1,807,200	$	1,813,800

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The fair value of debt was based on quoted market prices and on borrowing rates available to the Company as of May 2, 2020, February 1, 2020 and May 4, 2019. These inputs are considered to be Level 2.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis.

The Company believes that the carrying amounts of its other financial instruments, including cash, accounts receivable, and accounts payable, approximates their carrying value due to the short-term maturities of these instruments.

11. Earnings Per Share

The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average common shares outstanding for the thirteen weeks ended May 2, 2020 and May 4, 2019:

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Weighted-average common shares outstanding, used for basic computation	136,089,960	136,810,084
Plus: Incremental shares of potentially dilutive securities	2,337,780	3,652,488
Weighted-average number of common and dilutive potential common shares outstanding	138,427,740	140,462,572

Stock options and restricted shares of 875,894 and 780,256, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended May 2, 2020, because their inclusion would have been anti-dilutive. Similarly, stock options and restricted shares of 286,124 and 209,149, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended May 4, 2019.

12. 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% from February 13, 2019 to February 13, 2022. At May 2, 2020, February 1, 2020, and May 4, 2019, the Interest Rate Swaps were recorded as a liability of $59.8 million, $40.0 million and $24.6 million, respectively, with the net of tax amount recorded in other comprehensive loss.

The Company elected hedge accounting for the interest rate swap agreements, and as such, the effective portion of the losses was recorded as a component of other comprehensive loss. There were $19.4 million and $5.2 million of losses recorded in other comprehensive loss for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively.

The fair values of derivative instruments included on the consolidated balance sheets are as follows (in thousands):

						Fair Value at
Accounting for cash flow hedges	Notional Amount		Fixed Rate		Balance Sheet Classification	May 2, 2020			February 1, 2020			May 4, 2019
Interest rate swap	$	600,000	3.00	%	Other non-current liabilities	$	(29,934	)	$	(20,035	)	$	(12,336	)
Interest rate swap	360,000		3.00	%	Other non-current liabilities	(17,941		)	(11,997		)	(7,370		)
Interest rate swap	240,000		3.00	%	Other non-current liabilities	(11,965		)	(8,003		)	(4,920		)
Net carrying amount	$	1,200,000			Total liabilities	$	(59,840	)	$	(40,035	)	$	(24,626	)

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q, as well as the audited consolidated financial statements and the related notes thereto in our Annual Report on Form 10-K for the fiscal year 2019. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause such differences are discussed in the sections of this Quarterly Report on Form 10-Q titled "Forward-Looking Statements" and "Item 1A. Risk Factors," and in Part I. "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year 2019.

We report on the basis of a 52- or 53-week fiscal year, which ends on the Saturday closest to the last day of January. Accordingly, references herein to "fiscal year 2020" relate to the 52 weeks ending January 30, 2021, and references herein to "fiscal year 2019" relate to the 52 weeks ended February 1, 2020. The first quarter of fiscal year 2020 ended on May 2, 2020, and the first quarter of fiscal year 2019 ended on May 4, 2019, and both include thirteen weeks.

Overview

BJ’s Wholesale Club is a leading warehouse club operator on the east coast of the United States. We deliver significant value to our members, consistently offering 25% or more savings on a representative basket of manufacturer-branded groceries compared to traditional supermarket competitors. We provide a curated assortment focused on perishable products, continuously refreshed general merchandise, services and gasoline to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities.

Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 218 large-format, high volume warehouse clubs spanning 17 states. In our core New England markets, which have high population density and generate a disproportionate part of U.S. gross domestic product, we operate almost three times the number of clubs compared to the next largest warehouse club competitor. In addition to shopping in our clubs, members are able to shop when and how they want through our website, www.bjs.com; our highly-rated mobile app and our integrated same-day delivery offering.

Our goal is to offer our members significant value and a meaningful return in savings on their annual membership fee. As of the end of fiscal year 2019, we had approximately 5.5 million members paying annual fees to gain access to savings on groceries, consumables, general merchandise, services and gasoline. The annual membership fee for our Inner Circle^® membership is $55, and the annual membership fee for our BJ’s Perks Rewards^® membership, which offers additional value-enhancing features, is $110. We believe that members can save over ten times the price of their $55 Inner Circle membership fee versus what they would otherwise pay at traditional supermarket competitors when they spend $2,500 or more per year at BJ’s on manufacturer-branded groceries. In addition to providing significant savings on a representative basket of manufacturer-branded groceries, we accept all manufacturer coupons and also carry our own exclusive brands that enable members to save on price without compromising on quality. Our two private label brands, Wellsley Farms^® and Berkley Jensen^®, represented over $2 billion in annual sales for fiscal year 2019, and are the largest brands we sell. Our customers recognize the relevance of our value proposition across economic environments, as demonstrated by over 20 consecutive years of membership fee income growth. Our membership fee income was $302.2 million for fiscal year 2019.

Our business is moderately seasonal in nature. Historically, our business has realized a slightly higher portion of net sales, operating income and cash flows from operations in the second and fourth fiscal quarters, attributable primarily to the impact of the summer and year-end holiday season, respectively.

Factors Affecting Our Business

COVID-19 Impact. During the first quarter of 2020, the COVID-19 pandemic had a positive impact on our results of operations. Increased demand for our grocery products more than offset declines in our general merchandise and services division, which resulted in significant growth in comparable club sales over last year’s first quarter. This increased demand for our grocery products could reverse in the future if consumer purchasing behavior changes. However, the COVID-19 situation is unprecedented and continuously evolving, and the long-term impacts to our financial condition and results of operations are still uncertain. For a further discussion of the impact of COVID-19 on our business, see the section entitled "Thirteen Weeks Ended May 2, 2020 (First Quarter of Fiscal Year 2020) Compared to Thirteen Weeks Ended May 4, 2019 (First Quarter of Fiscal Year 2019)" included below.

The COVID-19 pandemic may impact many of the factors discussed in this section, including, among others, overall economic trends, consumer preferences and demand, product mix, quarterly fluctuations and sourcing, which in turn could adversely affect our business, financial condition and results of operations. See Part II. "Item 1A. Risk Factors".

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Overall economic trends. The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending in our clubs, while economic weakness, which generally results in a reduction of customer spending, may have a different or more extreme effect on spending at our clubs. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include employment rates, business conditions, changes in the housing market, the availability of credit, interest rates, tax rates and fuel and energy costs. In addition, during periods of low unemployment, we may experience higher labor costs.

Size and loyalty of membership base. The membership model is a critical element of our business. Members drive our results of operations through their membership fee income and their purchases. The majority of members renew within six months following their renewal date. Therefore, our renewal rate is a trailing calculation that captures renewals during the period seven to eighteen months prior to the reporting date. We have grown our membership fee income each year for the past two decades. Our membership fee income totaled $302.2 million in fiscal year 2019. Our membership renewal rate, a key indicator of membership engagement, satisfaction and loyalty, was 87% at the end of fiscal year 2019.

Consumer preferences and demand. Our ability to maintain our appeal to existing customers and attract new customers primarily depends on our ability to originate, develop and offer a compelling product assortment responsive to customer preferences. If we misjudge the market for our products, fail to adjust to changes in our member needs, or there is otherwise a decrease in consumer spending and confidence, including in response to COVID-19, we may be faced with excess inventories for some products and may be required to become more promotional in our selling activities, which would impact our net sales and gross profit.

Infrastructure investment. Our historical operating results reflect the impact of our ongoing investments to support our growth. We have made significant investments in our business that we believe have laid the foundation for continued profitable growth. We believe that strengthening our management team and enhancing our information systems, including our distribution center management and point-of-sale systems, will enable us to replicate our profitable club format and provide a differentiated shopping experience. We expect these infrastructure investments to support our successful operating model across our club operations.

Product mix. Changes in our product mix affect our performance. For example, we have continued to add private label products to our assortment of product offerings at our clubs, which we generally price lower than the manufacturer branded products of comparable quality that we also offer. Accordingly, a shift in our sales mix in which we sell more units of our private label products and fewer units of our manufacturer branded products would generally have a positive impact on our profit margins but an adverse impact on our overall net sales. Changes in our revenues from gasoline sales may also negatively affect our performance. Since gasoline generates lower profit margins than the remainder of our business, we could expect to see our overall gross profit margin rates decline as sales of gasoline increase.

Effective sourcing and distribution of products. Our net sales and gross profit are affected by our ability to purchase our products in sufficient quantities at competitive prices. While we believe our vendors have adequate capacity to meet our current and anticipated demand, our level of net sales could be adversely affected in the event of constraints in our supply chain, including our inability to procure and stock sufficient quantities of some merchandise in a manner that is able to match market demand from our customers, leading to lost sales.

Gasoline prices. The market price of gasoline impacts our net sales and comparable club sales, and large fluctuations in the price of gasoline may produce a short-term impact on our margins. Retail gasoline prices are driven by daily crude oil and wholesale commodity market changes and are volatile, as they are influenced by factors that include changes in demand and supply of oil and refined products, global geopolitical events, regional market conditions and supply interruptions caused by severe weather conditions. Typically, the change in crude oil prices impacts the purchase price of wholesale petroleum fuel products, which in turn impacts retail gasoline prices at the pump. During times when prices are particularly volatile, differences in pricing and procurement strategies between the Company and its competitors may lead to temporary margin contraction or expansion depending on whether prices are rising or falling, and this impact could affect our overall results for a fiscal quarter.

In addition, the relative level of gasoline prices from period to period may lead to differences in our net sales between those periods. Further, because we generally attempt to maintain a fairly stable gross profit per gallon, this variance in net sales, which may be substantial, may or may not have a significant impact on our operating income.

Fluctuation in quarterly results. Our quarterly results have historically varied depending upon a variety of factors, including our product offerings, promotional events, club openings, weather related events and shifts in the timing of holidays, among other things. As a result of these factors, our working capital requirements and demands on our product distribution and delivery network may fluctuate during the year.

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Inflation and deflation trends. Our financial results can be expected to be directly impacted by substantial increases in product costs due to commodity cost increases or general inflation, which could lead to a reduction in our sales, as well as greater margin pressure, as costs may not be able to be passed on to consumers. Changes in commodity prices and general inflation have not materially impacted our business. In response to increasing commodity prices or general inflation, we seek to minimize the impact of such events by sourcing our merchandise from different vendors, changing our product mix or increasing our pricing when necessary.

Tariffs. We are implementing a variety of mitigation measures in order to reduce the risk associated with our direct exposure to tariffs. We have diversified our global supply chain to reduce our reliance on China by sourcing high-quality products from other markets in both Asia and Africa. Chinese-sourced goods represent 1% of our cost of sales during the first quarter of fiscal year 2020. We believe that this gives us a much smaller exposure to tariffs than many other retailers.

Refinancings. In January of fiscal year 2019, we repriced our senior secured first lien term loan facility (the "First Lien Term Loan"), resulting in a reduction to the applicable interest rate.

How We Assess the Performance of Our Business

In assessing our performance, we consider a variety of performance and financial measures. The key generally accepted accounting principles in the United States of America ("GAAP") measures include net sales, membership fee income, cost of sales, SG&A and net income. In addition, we also review other important metrics such as Adjusted EBITDA, comparable club sales and merchandise comparable club sales.

Net sales

Net sales are derived from direct retail sales to customers in our clubs and online, net of merchandise returns and discounts. Growth in net sales is impacted by opening new clubs and increases in comparable club sales.

Comparable club sales

Comparable club sales, also known as same store sales, is an important measure throughout the retail industry. In determining comparable club sales, we include all clubs that were open for at least thirteen months at the beginning of the period and were in operation during the entirety of both periods being compared, including relocated clubs and expansions. There may be variations in the way in which some of our competitors and other retailers calculate comparable club or same store sales. As a result, data in this Quarterly Report on Form 10-Q regarding our comparable club sales may not be comparable to similar data made available by other retailers.

Comparable club sales allow us to evaluate how our club base is performing by measuring the change in period-over-period net sales in clubs that have been open for the applicable period. Various factors affect comparable club sales, including consumer preferences and trends, product sourcing, promotional offerings and pricing, customer experience and purchase amounts, weather and holiday shopping period timing and length.

Merchandise comparable club sales

Merchandise comparable club sales represents comparable club sales from all merchandise other than our gasoline operations for the applicable period.

Membership fee income

Membership fee income reflects the amount collected from our customers to be a member of our clubs. Membership fee income is recognized in revenue on a straight-line basis over the life of the membership, which is typically twelve months.

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Cost of sales

Cost of sales consists primarily of the direct cost of merchandise and gasoline sold at our clubs, including the following: 

• 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.

Selling, general and administrative expenses ("SG&A")

SG&A consists of various expenses related to supporting and facilitating the sale of merchandise in our clubs, including the following: 

• 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.

SG&A includes both fixed and variable components and, therefore, is not directly correlated with net sales. In addition, the components of our SG&A may not be comparable to those of other retailers. We expect that our SG&A will increase in future periods due to investments to spur comparable club sales growth and our continuing club growth. In addition, any increase in future stock option or other stock-based grants or modifications will increase our stock-based compensation expense included in SG&A.

Net Income

Net income reflects the Company's net sales, less cost of sales, SG&A, interest, taxes and other expenses.

Adjusted EBITDA

Adjusted EBITDA is defined as income from continuing operations before interest expense, net, provision for income taxes and depreciation and amortization, adjusted for the impact of certain other items, including: stock-based compensation expense; pre-opening expenses; non-cash rent; strategic consulting; offering costs; and other adjustments. For a reconciliation of Adjusted EBITDA to income from continuing operations, the most directly comparable GAAP measure, see "Non-GAAP Financial Measures."

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Non-GAAP Financial Measures

Adjusted EBITDA

We present Adjusted EBITDA, which is not a recognized financial measure under GAAP, because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance, including pre-opening expenses. The amount and timing of pre-opening expenses are dependent on, among other things, the size of new clubs opened and the number of new clubs opened during any given period. You are encouraged to evaluate the adjustments described above and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in our presentation of Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be considered as an alternative to any other performance measure derived in accordance with GAAP and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. There can be no assurance that we will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries. Further, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation or as a substitute for any analysis of our results as reported under GAAP.

Management believes Adjusted EBITDA is helpful in highlighting trends in our core operating performance compared to other measures, which can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which companies operate and capital investments. We use Adjusted EBITDA in connection with establishing discretionary annual incentive compensation; to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies; to make budgeting decisions; and to compare our performance against that of other peer companies using similar measures.

The following is a reconciliation of our income from continuing operations to Adjusted EBITDA and Adjusted EBITDA as a percentage of net sales for the periods presented:

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
(dollars in thousands)
Income from continuing operations	$	95,742		$	36,085
Interest expense, net	21,844			27,789
Provision for income taxes	26,164			6,808
Depreciation and amortization	40,839			38,670
Stock-based compensation expense (a)	5,514			3,844
Pre-opening expenses (b)	2,601			2,296
Non-cash rent (c)	1,504			754
Strategic consulting (d)	—			6,739
Offering costs (e)	—			1,222
Other adjustments (f)	(293		)	(131		)
Adjusted EBITDA	$	193,915		$	124,076
Adjusted EBITDA as a percentage of net sales	5.2		%	4.0		%

(a) Represents total stock-based compensation expense.

(b) Represents direct incremental costs of opening or relocating a facility that are charged to operations as incurred.

(c) Consists of an adjustment to remove the non-cash portion of rent expense.

(d) Represents fees paid to external consultants for strategic initiatives of limited duration.

(e) Represents costs related to registered offerings by selling stockholders.

(f) Other non-cash items, including non-cash accretion on asset retirement obligations and obligations associated with our post-retirement medical plan.

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Free cash flow

We present free cash flow, which is not a recognized financial measure under GAAP, because we use it to report to our board of directors and we believe it assists investors and analysts in evaluating our liquidity. Free cash flow should not be considered as an alternative to cash flows from operations as a liquidity measure. We define free cash flow as net cash provided by operating activities less additions to property and equipment, net of disposals, plus proceeds from sale leaseback transactions.

Our presentation of free cash flow should not be considered as an alternative to any other measure derived in accordance with GAAP and should not be construed as an inference that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, free cash flow may not be comparable to similarly titled measures used by other companies in our industry or across different industries. Further, free cash flow has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

The following is a reconciliation of our net cash from operating activities to free cash flow for the periods presented:

	Thirteen Weeks Ended
(dollars in thousands)	May 2, 2020		May 4, 2019
Net cash provided by operating activities	$	469,902	$	44,936
Less: Additions to property and equipment, net of disposals	35,212		36,534
Free cash flow	$	434,690	$	8,402

Results of Operations

The following tables summarize key components of our results of operations for the periods indicated:

Statement of Operations Data	Thirteen Weeks Ended
(dollars in thousands)	May 2, 2020			May 4, 2019
Net sales	$	3,718,040		$	3,069,763
Membership fee income	79,565			73,373
Total revenues	3,797,605			3,143,136
Cost of sales	3,060,893			2,568,977
Selling, general and administrative expenses	590,361			501,181
Pre-opening expenses	2,601			2,296
Operating income	143,750			70,682
Interest expense, net	21,844			27,789
Income from continuing operations before income taxes	121,906			42,893
Provision for income taxes	26,164			6,808
Income from continuing operations	95,742			36,085
Loss from discontinued operations, net of income taxes	(8		)	(287		)
Net income	$	95,734		$	35,798
Operational Data:
Total clubs at end of period	218			216
Comparable club sales	19.9		%	2.0		%
Merchandise comparable club sales	27.0		%	1.9		%
Adjusted EBITDA	$	193,915		$	124,076
Free cash flow	434,690			8,402

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Thirteen Weeks Ended May 2, 2020 (First Quarter of Fiscal Year 2020) Compared to Thirteen Weeks Ended May 4, 2019 (First Quarter of Fiscal Year 2019)

Net Sales

Net sales for the first quarter of fiscal year 2020 were $3,718.0 million, a 21.1% increase from net sales reported for the first quarter of fiscal year 2019 of $3,069.8 million. The increase was due to a 27.0% increase in merchandise comparable club sales discussed below, offset by a 25.3% decrease in gasoline sales due to declines in demand and the retail price of gasoline versus the first quarter of fiscal year 2019.

Comparable club sales 

	Thirteen Weeks Ended
	May 2, 2020
Comparable club sales	19.9	%
Less: contribution from gasoline sales	(7.1	)%
Merchandise comparable club sales	27.0	%

Merchandise comparable club sales increased by 27.0% in the first quarter of fiscal year 2020.  The increase was due to remarkable sales growth in our grocery division of approximately 33%, partially offset by lower sales in the general merchandise and services division of approximately 3%.  In grocery, sales were most robust in categories impacted by the COVID-19 pandemic, including paper products, cleaning supplies, fresh meat, frozen, dairy, fresh produce, packaged goods and beverages. General merchandise and services sales declined due primarily to lower sales of apparel and services, partially offset by increases in sales of televisions, consumer electronics and small appliances.

Membership fee income

Membership fee income was $79.6 million in the first quarter of fiscal year 2020, compared to $73.4 million in the first quarter of fiscal year 2019, reflecting an 8.4% increase. The increase in membership fee income was primarily driven by growth in members.

Cost of sales

Cost of sales was $3,060.9 million, or 82.3% of net sales, in the first quarter of fiscal year 2020, compared to $2,569.0 million, or 83.7% of net sales, in the first quarter of fiscal year 2019.  The 1.4% decrease as a percentage of net sales was driven by increased gas margins worth approximately 1.7%, as the dislocation in the gasoline market caused the cost per gallon to decrease rapidly.  The merchandise margin rate decreased by approximately 0.3% compared to the first quarter of fiscal year 2019 due to markdowns on apparel inventory, higher distribution costs due to the COVID-19 pandemic, and price investments in some perishable categories.  These decreases were partially countered by continued progress in our category profitability improvement program and improved shrink and salvage rates. 

Selling, general and administrative expenses

SG&A increased by 17.8% to $590.4 million in the first quarter of fiscal year 2020 from $501.2 million in the first quarter of fiscal year 2019. SG&A in the first quarter of fiscal 2019 included charges related to registered offerings by selling stockholders of $1.2 million. The year-over-year increase in SG&A expense was primarily driven by incremental costs related to the COVID-19 pandemic, including $51.3 million of wage increases and bonus expense, $8.8 million in safety and protective equipment and $1.7 million in other operational costs, such as increased security. The remaining increase in SG&A was related to higher insurance expenses and higher credit and debit acceptance fees due to the increase in merchandise sales. We expect to continue to have elevated expenses related to COVID-19 in the second quarter of fiscal 2020 and potentially beyond such quarter, though at lower rates than for the first quarter of fiscal 2020.

Pre-opening expenses

Pre-opening expenses were $2.6 million in the first quarter of fiscal year 2020, compared to $2.3 million in the first quarter of fiscal year 2019. Pre-opening expenses for the first quarter of fiscal year 2020 included charges for one new club and three new gas stations that opened during the first quarter of fiscal year 2020, and one additional club and five additional gas stations that are expected to open later in fiscal year 2020.

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Interest expense

Interest expense was $21.8 million for the first quarter of fiscal year 2020, compared to $27.8 million for the first quarter of fiscal year 2019. Interest expense for the first quarter of fiscal year 2020 included interest expense of $19.8 million related to debt service on outstanding borrowings, $1.2 million of amortization expense on deferred financing costs and original issue discounts on our outstanding borrowings and $0.8 million of other interest charges. The decrease in interest expense was driven by continued de-leveraging and the repricing of our First Lien Term Loan, which was completed in January 2020.

Interest expense for the first quarter of fiscal year 2019 included interest expense of $25.9 million related to debt service on outstanding borrowings, $1.3 million of amortization expense on deferred financing costs and original issue discounts on our outstanding borrowings and $0.6 million of other interest charges.

Provision for income taxes

The Company’s effective income tax rate from continuing operations was 21.5% for the first quarter of fiscal year 2020, compared to 15.9% for the first quarter of fiscal year 2019. The increase in the effective tax rate for the first quarter of fiscal year 2020, compared to the first quarter of fiscal year 2019, was primarily due to higher excess tax benefits from stock-based compensation as a percentage of pre-tax book income in the same period in fiscal year 2019.

Seasonality

Our business is moderately seasonal in nature. Historically, our business has realized a slightly higher portion of net sales, operating income and cash flows from operations in the second and fourth fiscal quarters, attributable primarily to the impact of the summer and year-end holiday season, respectively. Our quarterly results have been and will continue to be affected by the timing of new club openings and their associated pre-opening costs. As a result of these factors, our financial results for any single quarter or for periods of less than a year are not necessarily indicative of the results that may be achieved for a full fiscal year.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows generated from club operations and borrowings from our senior secured asset based revolving credit and term facility ("ABL Facility"). As of May 2, 2020, cash and cash equivalents totaled $132.9 million and we had $770.6 million of unused capacity under our ABL Facility. We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under our ABL Facility, will be sufficient to finance our operations, meet our current debt obligations, and fund anticipated capital expenditures.

Summary of Cash Flows

A summary of our cash flows from operating, investing and financing activities is presented in the following table:

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
(in thousands)
Net cash provided by operating activities	$	469,902		$	44,936
Net cash used in investing activities	(35,212		)	(36,534		)
Net cash used in financing activities	(331,979		)	(5,671		)
Net increase in cash and cash equivalents	$	102,711		$	2,731

Net Cash from Operating Activities

Net cash provided by operating activities was $469.9 million for the first quarter of fiscal year 2020, compared to $44.9 million for the first quarter of fiscal year 2019. The increase in operating cash flow was primarily due to the working capital benefit generated by our strong sales performance and increased turnover of inventory, as well as increased membership fee income and lower interest payments on debt.

Net Cash from Investing Activities

Cash used for capital expenditures was $35.2 million for the first quarter of fiscal year 2020, compared to $36.5 million for the first quarter of fiscal year 2019. The decrease is due primarily to the timing of construction costs on new clubs and gas stations.

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Net Cash from Financing Activities

Net cash used in financing activities for the first quarter of fiscal year 2020 was $332.0 million, compared to $5.7 million for the first quarter of fiscal year 2019. The increase compared to the first quarter of fiscal year 2019 is due mainly to the repayment of outstanding borrowings on our ABL Facility.

Debt and Borrowing Capacity

On November 1, 2019, we borrowed $200.0 million from the ABL Facility. The proceeds were used to pay a portion of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $2.0 million of previously capitalized deferred debt issuance costs and original issue discount.

On January 29, 2020, we amended the First Lien Term Loan to reduce the applicable interest rates. As amended, the First Lien Term Loan has an initial principal amount of $1,315.2 million and interest is calculated either at LIBOR plus 225 basis points or a base rate plus 125 basis points. Total fees associated with the refinancing were approximately $1.7 million. We wrote-off $0.1 million of previously capitalized debt issuance costs and original issue discount and expensed $1.7 million of new third-party fees.

At May 2, 2020, the interest rate for the First Lien Term Loan was 3.08% and there was $1,311.9 million outstanding. See Note 5, "Debt and Credit Arrangements" of our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Contractual Obligations

Our contractual obligations consist primarily of long-term debt obligations, interest payments, operating leases and purchase orders for merchandise inventory. These contractual obligations impact our short-term and long-term liquidity and capital needs. As of May 2, 2020, other than those items related to the ordinary course of operations of our business such as inventory purchases, there were no material changes to our contractual obligations from those described in our Annual Report on Form 10-K for the fiscal year ended February 1, 2020.

Off-Balance Sheet Arrangements

We have not entered into off-balance sheet arrangements. We do enter into operating lease commitments, letters of credit and purchase obligations in the ordinary course of our operations.

Critical Accounting Policies and Use of Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which we have prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. Our critical accounting policies are described under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations— Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year 2019. For a full discussion of our significant accounting policies, see Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

For a full discussion of recently issued accounting pronouncements, see Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to changes in market interest rates and these changes in rates will impact our net interest expense and our cash flow from operations. Substantially all of our borrowings carry variable interest rates. There have been no material changes in our market risk from the disclosure included in Part II. "Item 7A. Quantitative and Qualitative Disclosures of Market Risk" in the Annual Report on Form 10-K for the fiscal year 2019.

Item 4. Controls and Procedures.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of May 2, 2020.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the most recently completed fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are subject to various litigations, claims and other proceedings that arise from time to time in the ordinary course of business. We believe these actions are routine and incidental to the business. While the outcome of these actions cannot be predicted with certainty, we do not believe that any will have a material adverse impact on our business, financial condition or results of operations.

Item 1A. Risk Factors.

The following risk factor supplements the risk factors described under "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended February 1, 2020, and should be read in conjunction with the other risk factors presented in such Annual Report on Form 10-K.

The outbreak of the novel coronavirus, or COVID-19, has caused, and could continue to cause, severe disruptions in the United States, regional and global economies and could have a material adverse effect on our business, financial condition and results of operations.

The COVID-19 pandemic has caused significant disruptions to the United States, regional and global economies and has contributed to significant volatility and negative pressure in financial markets.  The global impact of the COVID-19 pandemic has been rapidly evolving and many U.S. states and cities, including where our clubs and distribution centers are located, have imposed measures intended to control its spread, such as instituting shelter-in-place orders and restrictions on the types of businesses that may continue to operate and the manner in which they may do so. Generally, under these orders, our operations have been deemed "essential" by U.S. federal, state and local authorities, which have allowed our clubs and distribution centers to remain open. However, many of these orders and other government regulations have resulted in reduced operating hours and limited access for our members, including limits on the number of people that can be in a club at a time, and member traffic may decline if more severe restrictions are implemented or if members opt to shop less frequently or use other online outlets and delivery systems in order to reduce their risk of potential exposure to COVID-19. Further, any alleged failure to comply with governmental orders or regulations, which vary across states and localities, could result in costly litigation, enforcement actions and penalties.

The extent to which the COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious disease, effects our business, operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of such pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic may materially adversely affect our business, financial condition and results of operations, and may have the effect of heightening many of the risks described in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended February 1, 2020, including:

• a complete or partial closure of, or a decrease in member traffic at, one or more of our clubs, due to government restrictions and limitations intended to promote social distancing and contain the spread of COVID-19, which could adversely affect our net sales and operating results;

• any difficulties and delays in obtaining products from our distributors and suppliers, delivering products to our clubs and adequately staffing our clubs and distribution centers, which could result in an inability to maintain inventory levels and meet our members’ demands and may cause us to seek alternative and potentially more expensive sources of supply;

• a decrease in consumer discretionary spending and confidence, changes in our members' needs or decreased traffic from stockpiling in preparation for the pandemic, each of which could adversely affect member demand for the products we sell, result in shifts in demand to lower priced options and change the mix of products we sell, result in slower inventory turnover and greater markdowns of inventory, cause us to lose existing members and/or fail to attract new members, or otherwise materially adversely affect our net sales and operating results;

• any inability to continue to provide our team members with appropriate compensation and protective measures, which could cause us to be unable to retain current or attract new team members to perform necessary functions within our clubs and distribution centers;

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• any spread of COVID-19 among our team members or employees of our distributors or suppliers, within a particular club, distribution center or geographical area, may necessitate that impacted clubs, distribution centers or suppliers be temporarily closed, which could negatively impact our business and financial condition, as well as our reputation;

• any belief by members or team members that they have contracted COVID-19 in one of our clubs or that we have not taken appropriate precautionary measures to prevent the spread of COVID-19 in our clubs, which could result in costly and time consuming litigation and negatively impact our reputation;

• severe disruption and instability in the U.S. and global financial markets or deteriorations in credit and financing conditions, which could make it difficult for us to access debt and equity capital on attractive terms, or at all;

• any potential negative impact on the health of our executive management team or key employees or the executive management team or key employees of our suppliers and distributors, particularly if a significant number of our or their executive management team or key employees are impacted, which could result in a deterioration in our or their ability to ensure business continuity during a disruption;

• any inability to effectively manage our operations while certain of our employees continue to work remotely due to the COVID-19 pandemic, which could adversely impact our business; and

• limited access to our management, support staff and professional advisors, which could decrease the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, increase our susceptibility to security breaches, or hamper our ability to comply with regulatory obligations, each of which could lead to reputational harm and regulatory issues or fines.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table sets forth information regarding our purchases of shares of our common stock during the first quarter of fiscal year 2020.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
February 2, 2020 to February 29, 2020	—		$	—	—	$	250,000,000
March 1, 2020 to April 4, 2020	258,353	(2)	23.49		175,000	246,020,500
April 5, 2020 to May 2, 2020	—		—		—	246,020,500
Total	258,353		$	23.49	175,000	$	246,020,500

(1) On December 19, 2019, our board of directors authorized the repurchase of up to $250.0 million of our outstanding common stock from time to time as market conditions warrant. The share repurchase program expires at the end of fiscal year 2021 and may be suspended or discontinued at any time without notice.

(2) Includes 83,353 shares of common stock surrendered to the Company by employees to satisfy their tax withholding obligations in connection with the vesting of restricted stock awards. See Note 8 "Stock Incentive Plans" in the Notes to Unaudited Consolidated Financial Statements included in this report.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable

Item 5. Other Information.

None.

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Item 6. Exhibits.

Exhibit Number	Exhibit Description
3.1	Second Amended and Restated Certificate of Incorporation of the Company (previously filed as Exhibit 3.1 to the Company’s Registration Statement on Form S-1 (File No. 333-229593) on February 11, 2019 and incorporated herein by reference).
3.2	Second Amended and Restated Bylaws of the Company (previously filed as Exhibit 3.2 to the Company’s Registration Statement on Form S-1 (File No. 333-229593) on February 11, 2019 and incorporated herein by reference).
10.1#	BJ's Wholesale Club, Inc. Executive Retirement Plan, as amended (filed herewith).
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section  1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101.INS	Inline XBRL Instance Document (filed herewith)
101.SCH	Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.PRE	Inline XBRL Taxonomy Extension Linkbase Document (filed herewith)
104	Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) (filed herewith)

# Represents management compensation plan, contract or arrangement.

29

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BJ’S WHOLESALE CLUB HOLDINGS, INC.
Date: May 29, 2020	By:	/s/ Robert W. Eddy
		Robert W. Eddy
		Executive Vice President, Chief Financial & Administrative Officer (Principal Financial Officer and Authorized Signatory)

30

EX-10.1

As amended through February 4, 1999

BJ’S WHOLESALE CLUB, LNC.

EXECUTIVE RETIREMENT PLAN, As Amended

BJ's Wholesale Club, Inc. (the "Company") desires to assure that it and its subsidiaries will have the benefit of the continued service and experience of certain of their key employees and to assure the Company and such employees of the continuity of management in the event of a change of control of the Company, and amends and restates this plan (the "Plan") to provide such assurances. This amended and restated Plan is intended to cover as Participants those employees of the Company who are designated or otherwise described as Participant in Article 1.8.

ARTICLE 1. DEFINITIONS. The following terms as used in this Plan shall have the following meanings:

1.1    "Code" shall mean the Internal Revenue Code of 1986, as the same presently exists

and as the same may hereafter be amended, or any successor statute of similar purpose.

1.2    "Committee" shall mean the Executive Compensation Committee of the Board of

Directors of BJ’s Wholesale Club, Inc.

1.3    "Company" shall mean BJ's Wholesale Club, Inc. and any wholly-owned

subsidiaries of BJ’s Wholesale Club, Inc.

1.4    "Compensation" shall mean, for any Plan Year, a participant's actual base salary

earned during the Plan Year (before taking into account any reduction in base salary pursuant to a salary reduction agreement under Section 401(k) or Section 125 of the Code). Any base salary that is deferred under a non-qualified deferred compensation plan shall be included as "Compensation" for the Plan Year in which the salary is earned but not included for the Plan Year in which such deferred compensation is paid.

1.5    “Effective Date” shall mean July 27, 1997.

1.6    "Plan" shall mean the BJ's Wholesale Club, Inc. Executive Retirement Plan, as

herein set forth, including any and all amendments hereto and restatements hereof.

1.7    "Plan Year" shall mean the Company's fiscal year.

1.8    "Participant" shall mean an employee of the Company selected by the Committee

to be a Participant in the Plan; provided, however, that the Committee shall in no event designate as a Participant hereunder any employee who is not a highly compensated employee or a member of the Company's select group of management-level employees. The list of Participants is attached as "Schedule A" hereto, which list shall be periodically updated: The Committee, in its sole and absolute discretion, may designate new Participants and remove persons as Participants hereunder, provided, however, that the Committee may not take any action so as to reduce a former Participant's funded benefit hereunder. Notwithstanding the foregoing, all Company employees as of the Effective Date who immediately prior to the Effective Date were Waban Inc. employees who participated in the Waban Inc. Executive Retirement Plan shall (i) be Participants in the Plan, and (ii) all years of Service, Annual Retirement Contributions, accrued benefits and other benefits, rights and features of or attributable to such employees under the Waban Inc. Executive Retirement Plan shall continue in full force and effect and carry over into this Plan.

1

1.9    "Annual Retirement Contribution" shall mean that amount the Company

contributes on behalf of each Participant pursuant to Article 2 hereof.

1.10 "Years of Service" shall mean each 52 or 53 week period of uninterrupted service with the Company, including Waban Inc., and their subsidiaries, ending on the last Saturday in January. A non-compensated leave of absence shall be excluded from Years of Service.

1.11 "Change of Control" shall have the meaning, set forth in Exhibit A.

ARTICLE 2. BENEFITS UNDER THIS PLAN

2.1    Annual Retirement Contribution. The Committee shall determine, in its sole

discretion, at any time within two (2) months prior to the end of the Plan Year but no later than two and-one-half (2-1/2) months following the close of the Plan Year, the amount of Annual Retirement Contribution the Company will make on behalf of each Participant, which amount shall be distributed or deemed distributed (as the case may be) as soon as practicable after the Committee's determination.

A Participant hereunder shall be entitled to an Annual Retirement Contribution in a Plan Year only if the Participant was actively employed by the Company on the last day of such Plan Year, unless the Participant's termination of employment during the Plan Year occurred due to either the Participant's (i) retirement on or after the attainment of age fifty-five (55), or (ii) disability (as defined under the Company's long-term disability plan).

2.2    Amount of Annual Retirement Contribution. The Committee shall have sole and

absolute discretion to determine the amount of the Annual Retirement Contribution; provided that the smallest Annual Retirement Contribution the Committee may determine on behalf of each Participant shall be that amount sufficient to provide the Participant with a benefit equal to three percent (3%) of the Participant's Compensation on an “after-tax” basis, taking into account the Participant's appropriate marginal tax bracket. The "after-tax" value of the Annual Retirement Contribution is hereinafter referred to as the "After-Tax Benefit".

2.3    Investment of After-Tax Benefit. As a condition of being a Participant hereunder,

each Participant agrees, understands and accepts that the After-Tax Benefit will be used to fund an appropriate vehicle to provide retirement income and benefit to the Participant (such as an insurance policy), which such vehicle shall be chosen by the Committee. If the Committee chooses an insurance program as said appropriate vehicle, then in the Committee's sole discretion either; (i) the Participant shall apply the After-Tax Benefit to purchase and maintain an individual policy (with the Participant as the owner thereof), or (ii) the Committee shall, on behalf of the Participant, apply the After-Tax Benefit to purchase and maintain an individual account (with the Participant as the owner thereof) under a group policy.

The Committee reserves the right not to make Annual Retirement Contributions on behalf of a Participant if it becomes aware or determines that prior Annual Retirement Contributions are not being applied in accordance with the terms and intent of this paragraph 2.3.

ARTICLE 3. FUNDING

3.1    Four Year Rule. Notwithstanding anything to the contrary herein contained or

implied, other than the provisions of Section 3.5 hereof, including Section 2.1 hereof, the Company will make payment in respect of a Participant's Annual Retirement Contribution for a Plan Year only if the Participant has been credited with at least four (4) Years of Service by, and is employed by the Company at, the end of such Plan Year.

2

3.2    Treatment of Participants with Less Than Four Years of Service. If a Participant

hereunder is credited with less than four (4) Years of Service by the end of the applicable Plan Year, the Participant will accrue the right to an Annual Retirement Contribution for that Plan year, based on (i) the Annual Retirement Contribution approved by the Committee for that Plan Year, and (ii) the Participant's Compensation for that Plan Year.

In the Plan Year in which the Participant is first credited with four (4) Years of Service, the Company will, in the time-frame determined in accordance with Section 2.1 hereof, make an aggregate retirement contribution on behalf of the Participant equal to: (i) the amount of the Annual Retirement Contribution of such Plan Year, plus (ii) the Annual Retirement Contribution amounts the Participant had accrued in the prior three (3) Plan Years, as determined pursuant to the first sentence of this Section 3.2, The aggregate retirement contribution shall be treated as provided in Section 2.3 hereof

3.3Forfeitures. If a Participant hereunder terminates employment with the Company

prior to being credited with four (4) years of Service, the Participant shall forfeit the right to any benefit accrued hereunder.

3.4Modification. By virtue of participating in this Plan, each Participant authorizes

the Company to adjust the amounts of insurance for whatever reason, such as to account for changes in salary, modifications in benefit formulas, etc.

3.5Change of Control. Effective upon any Change of Control occurring after

February 4, 1999 (as defined in Exhibit A to the Plan), a Participant will be fully vested in any benefit accrued under this Plan and will no longer forfeit any such accrued benefit upon a termination of employment. In addition, with respect to the Plan Year in which the Change of Control occurs, each Participant will receive an Annual Retirement Contribution for such Plan Year equal to that percentage of the Participant's Compensation for such Plan Year (annualizing the Participant's Compensation earned through the date upon which the Change of Control occurs) which is the same as the average percentage of Compensation contributed or accrued as the Annual Retirement Contribution for each Participant for each of the three immediately preceding Plan Years (or, if fewer, such number of Plan Years as the Participant has accrued an Annual Retirement Contribution under this Plan). Within 60 days after such Change of Control, the Company will contribute (a) the Annual Retirement Contribution for the Plan Year in which the Change of Control occurs as described herein, and (b) the Annual Retirement Contribution amounts any Participant had accrued in prior Plan Years as a Participant which had not yet been distributed to or on behalf of such Participant, to either (i) the investment vehicle to which the prior Plan Year's distribution had been made under this Plan; or, at the election of the Participant. (ii) to any other account which the Committee and the Participant may choose, consistent with the goals of the Plan.

ARTICLE 4. EFFECT ON EMPLOYMENT RIGHTS. This Plan shall not constitute an employment contract and nothing contained in this Plan shall confer upon the Participant the right to be retained in the service of the Company nor limit the right of the Company to discharge or otherwise deal with the Participant without regard to the existence of this Plan.

ARTICLE 5. ADMINISTRATION.

5.1Plan Administration. The authority to control and manage the operation and

administration of the Plan shall be placed in the Committee. The Committee shall have full power, discretion and authority to interpret, construe and administer the Plan and any part thereof

Subject to the limitations of this Plan, the Committee from time to time may establish rules for the administration and interpretation of the Plan and the transaction of its business. The determination of the

3

Committee as to any disputed question shall be conclusive.

The members of the Committee may authorize one or more of their number or any officer of the Company to execute or deliver any instrument, make any payment or perform any other act which the Plan authorizes or requires the Committee to do.

The Committee may employ counsel and other agents and may procure such clerical, accounting, actuarial, consulting and other services as it may require in carrying out the provisions of the Plan.

5.2    Indemnification. The Company shall indemnify and save harmless each member

of the Committee against all expenses and liabilities arising out of membership on such Committee, excepting only expenses and liabilities arising from such member's own gross negligence or willful misconduct, as determined by the Board of Directors or outside counsel designated by the Board of Directors.

ARTICLE 6. AMENDMENT OR TERMINATION OF PLAN. The Plan may be amended, suspended or terminated in whole or in part at any time and from time to time by the Committee. No such amendment, suspension or termination shall retroactively impair or otherwise adversely affect the rights of any Participant to benefits under this Plan that have been funded prior to the date of such amendment, suspension or termination.

ARTICLE 7. NONASSIGNMENT. The right to benefits hereunder shall not be assignable, and the Participant shall not be entitled to have such payments commuted or made otherwise than in accordance with the provisions of the Plan.

ARTICLE 8. CONSTRUCTION.

8. 1     Heading and Captions. The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.

8.2    Singular Includes Plural. Except where otherwise clearly indicated by context, the

singular shall include the plural, and vice-versa.

ARTICLE 9. RELEVANT LAW. This Plan shall be construed and enforced in accordance with the laws of the Commonwealth of Massachusetts to the extent such laws are not preempted by federal law.

4

Exhibit A

Definition of Change of Control

For the purposes of this Plan, a "Change of Control" shall mean:

(a)The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which satisfies the criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this definition; or

(b)Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequently to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board (except that this proviso shall not apply to any individual whose initial assumption of office as a director occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board); or

(c)Consummation of a reorganization, merger or consolidation involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, of the corporation resulting from such Business Combination (which as used in section (c) of this definition shall include, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation and (iii) at least half of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination, or

(d)    Approval by the stockholders of the Company of a complete liquidation or

dissolution of the Company.

Schedule A

5

Exhibit A

Definition of Change of Control

For the purposes of this Plan, a "Change of Control" shall mean:

(a)The acquisition by an individual, entity or group (within the meaning of Section I3(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then-outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (iv) any acquisition by any corporation pursuant to a transaction which satisfies the criteria set forth in clauses (i), (ii) and (iii) of subsection (c) of this definition; or

(b)Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequently to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board (except that this proviso shall not apply to any individual whose initial assumption of office as a director occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board); or

(c)Consummation of a reorganization, merger or consolidation involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, immediately following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, of the corporation resulting from such Business Combination (which as used in section (c) of this definition shall include, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting From such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination, or the combined voting power of the then-outstanding voting securities of such corporation and (iii) at least half of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

(d)    Approval by the stockholders of the Company of a complete liquidation or

dissolution of the Company.

6

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Lee Delaney, certify that:

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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.

Date: May 29, 2020

By:	/s/ Lee Delaney
	Lee Delaney President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Robert W. Eddy, certify that:

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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

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.

Date: May 29, 2020

By:	/s/ Robert W. Eddy
	Executive Vice President, Chief Financial and  Administrative Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of BJ’s Wholesale Club Holdings, Inc. (the “Company”), hereby certifies, to his knowledge, that:

1. The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, 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.

Date: May 29, 2020

By:	/s/ Lee Delaney
	Lee Delaney President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of BJ’s Wholesale Club Holdings, Inc. (the “Company”), hereby certifies, to his knowledge, that:

1. The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, 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.

Date: May 29, 2020

By:	/s/ Robert W. Eddy
	Robert W. Eddy Executive Vice President, Chief Financial and Administrative Officer (Principal Financial Officer)

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	May 02, 2020	Feb. 01, 2020	May 04, 2019
Current assets:
Cash and cash equivalents	$ 132,915	$ 30,204	$ 29,877
Accounts receivable, net	193,884	206,353	180,379
Merchandise inventories	1,024,937	1,081,502	1,085,565
Prepaid expenses and other current assets	46,631	41,961	47,403
Total current assets	1,398,367	1,360,020	1,343,224
Operating lease right-of-use assets, net	2,087,902	2,060,059	2,055,733
Property and equipment:
Land and buildings	383,915	375,375	381,041
Leasehold costs and improvements	215,878	214,209	204,742
Furniture, fixtures and equipment	1,170,139	1,135,892	1,067,448
Construction in progress	37,781	51,741	14,427
Total property and equipment, gross	1,807,713	1,777,217	1,667,658
Less: accumulated depreciation and amortization	(1,054,416)	(1,017,009)	(938,896)
Total property and equipment, net	753,297	760,208	728,762
Goodwill	924,134	924,134	924,134
Intangibles, net	144,019	146,985	157,103
Other assets	20,350	18,374	17,760
Total assets	5,328,069	5,269,780	5,226,716
Current liabilities:
Current portion of long-term debt	15,377	343,377	246,377
Current portion of operating lease liabilities	125,976	123,751	121,878
Accounts payable	990,420	786,412	820,489
Accrued expenses and other current liabilities	588,431	547,876	485,168
Total current liabilities	1,720,204	1,801,416	1,673,912
Long-term operating lease liabilities	2,016,206	1,986,790	1,966,688
Long-term debt	1,334,795	1,337,308	1,543,537
Deferred income taxes	42,369	46,200	44,934
Other non-current liabilities	181,998	152,410	145,954
Commitments and Contingencies (see Note 7)
STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock; par value $0.01; 5,000 shares authorized, and no shares issued or outstanding	0	0	0
Common stock, par value $0.01; 300,000 shares authorized, 142,349 shares issued and 138,666 outstanding at May 2, 2020; 140,723 shares issued and 137,298 outstanding at February 1, 2020; and 139,836 shares issued and 139,054 outstanding at May 4, 2019	1,423	1,407	1,398
Additional paid-in capital	784,724	773,618	752,218
Accumulated deficit	(620,635)	(716,369)	(867,746)
Accumulated other comprehensive loss	(40,528)	(26,586)	(15,070)
Treasury stock, at cost, 3,683 shares at May 2, 2020; 3,425 shares at February 1, 2020; 782 shares and May 4, 2019	(92,487)	(86,414)	(19,109)
Total stockholders’ equity (deficit)	32,497	(54,344)	(148,309)
Total liabilities and stockholders’ equity (deficit)	$ 5,328,069	$ 5,269,780	$ 5,226,716

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury Stock	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Accumulated Deficit
Beginning balance (in shares) at Feb. 02, 2019		138,099				(782)
Beginning balance at Feb. 02, 2019	$ (202,084)	$ 1,381	$ 742,072	$ (915,113)	$ (11,315)	$ (19,109)	$ 11,569	$ 11,569
Total Stockholders’ Deficit
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 (in shares)		1,737
Common stock issued under stock incentive plans	0	$ 17	(17)
Stock compensation expense	3,844		3,844
Net cash received on option exercises	$ 6,319		6,319
Ending balance (in shares) at May. 04, 2019	139,054	139,836				(782)
Ending balance at May. 04, 2019	$ (148,309)	$ 1,398	752,218	(867,746)	(15,070)	$ (19,109)
Beginning balance (in shares) at Feb. 01, 2020	137,298	140,723				(3,425)
Beginning balance at Feb. 01, 2020	$ (54,344)	$ 1,407	773,618	(716,369)	(26,586)	$ (86,414)
Total Stockholders’ Deficit
Net income	95,734			95,734
Unrealized loss on cash flow hedge, net of tax	(13,942)				(13,942)
Common stock issued under stock incentive plans (in shares)		1,626
Common stock issued under stock incentive plans		$ 16	(16)
Stock compensation expense	5,514		5,514
Net cash received on option exercises	5,608		5,608
Treasury stock purchases (in shares)						(258)
Treasury stock purchases	$ (6,073)					$ (6,073)
Ending balance (in shares) at May. 02, 2020	138,666	142,349				(3,683)
Ending balance at May. 02, 2020	$ 32,497	$ 1,423	$ 784,724	$ (620,635)	$ (40,528)	$ (92,487)

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Earnings Per Share

3 Months Ended

May 02, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average common shares outstanding for the thirteen weeks ended May 2, 2020 and May 4, 2019:

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Weighted-average common shares outstanding, used for basic computation	136,089,960	136,810,084
Plus: Incremental shares of potentially dilutive securities	2,337,780	3,652,488
Weighted-average number of common and dilutive potential common shares outstanding	138,427,740	140,462,572

Stock options and restricted shares of 875,894 and 780,256, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended May 2, 2020, because their inclusion would have been anti-dilutive. Similarly, stock options and restricted shares of 286,124 and 209,149, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended May 4, 2019.

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Commitments and Contingencies

3 Months Ended

May 02, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is involved in various legal proceedings that are typical of a retail business. In accordance with applicable accounting guidance, an accrual will be established for legal proceedings if and when those matters present loss contingencies that are both probable and estimable. The Company does not believe the resolution of any current proceedings will result in a material loss to the consolidated financial statements.

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Revenue Recognition

3 Months Ended

May 02, 2020

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, represented approximately 96% of the Company’s net sales and approximately 94% of the Company’s total revenues for the thirteen weeks ended May 2, 2020. 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 up to 5% cash back on eligible purchases made at BJ’s and up to 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 $28.6 million at May 2, 2020, $26.7 million at February 1, 2020 and $27.6 million at May 4, 2019.

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 $14.8 million, $14.8 million and $13.3 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively. The timing of revenue recognition of these awards dollars is driven by actual customer activities, such as redemptions and expirations. As of May 2, 2020, the Company expects to recognize $13.0 million of the deferred revenue in fiscal year 2020, 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 $157.6 million, $144.0 million and $141.6 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively.

Gift Card Program—The Company sells BJ’s gift cards that allow customers 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 in proportion to its rate of gift card redemptions because the Company’s performance obligation to redeem the gift card for merchandise is satisfied when the gift card is redeemed. The Company also recognizes breakage in proportion to its rate of gift card redemptions. Deferred revenue related to gift cards was $9.8 million, $10.3 million and $8.0 million at May 2, 2020, February 1, 2020 and May 4, 2019, respectively. The Company recognized $10.2 million and $11.1 million of revenue from gift card redemptions in the first quarter of fiscal year 2020 and first quarter of fiscal year 2019, respectively.

Disaggregation of Revenue

The Company’s club retail operations, which represent substantially all of its 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:

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Grocery (1)	81%	74%
General Merchandise & Services	11%	13%
Gasoline and Other	8%	13%

(1)

Grocery division includes the legacy perishables, edible grocery and non-edible grocery division.

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Debt and Credit Arrangements - Schedule of Debt (Detail) - USD ($) $ in Thousands	May 02, 2020	Feb. 01, 2020	May 04, 2019
Debt Instrument [Line Items]
Unamortized debt discount and debt issuance cost	$ (11,747)	$ (12,531)	$ (17,287)
Less: current portion	(15,377)	(343,377)	(246,377)
Long-term debt	1,334,795	1,337,308	1,543,537
ABL Facility
Debt Instrument [Line Items]
Credit facility, borrowed	50,000	378,000	281,000
First Lien Term Loan
Debt Instrument [Line Items]
Debt instrument carrying amount	$ 1,311,919	$ 1,315,216	$ 1,526,201

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Stock Incentive Plans - Schedule of Company's Stock Award Activity (Detail) shares in Thousands	3 Months Ended
	May 02, 2020 $ / shares shares
Stock Options
Stock Options, Shares
Outstanding, beginning balance (in shares) | shares	5,213
Granted (in shares) | shares	441
Forfeited/canceled (in shares) | shares	(26)
Exercised/vested (in shares) | shares	(969)
Outstanding, ending balance (in shares) | shares	4,659
Stock Options, Weighted Average Exercise Price
Outstanding, beginning balance (in dollar per share) | $ / shares	$ 14.00
Granted (in dollar per share) | $ / shares	25.07
Forfeited/canceled (in dollar per share) | $ / shares	20.07
Exercised/vested (in dollar per share) | $ / shares	6.03
Outstanding, ending balance (in dollar per share) | $ / shares	$ 16.67
Restricted Stock
Restricted Stock and Restricted Stock Units, Shares
Outstanding, beginning balance (in shares) | shares	1,445
Granted (in shares) | shares	683
Forfeited/canceled (in shares) | shares	(26)
Exercised/vested (in shares) | shares	(254)
Outstanding, ending balance (in shares) | shares	1,848
Restricted Stock and Restricted Stock Units, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in dollar per share) | $ / shares	$ 25.22
Granted (in dollar per share) | $ / shares	25.07
Forfeited/canceled (in dollar per share) | $ / shares	24.29
Exercised/vested (in dollar per share) | $ / shares	25.07
Outstanding, ending balance (in dollar per share) | $ / shares	$ 24.85
Restricted Stock Units
Restricted Stock and Restricted Stock Units, Shares
Outstanding, beginning balance (in shares) | shares	30
Granted (in shares) | shares	2
Forfeited/canceled (in shares) | shares	0
Exercised/vested (in shares) | shares	0
Outstanding, ending balance (in shares) | shares	32
Restricted Stock and Restricted Stock Units, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in dollar per share) | $ / shares	$ 25.83
Granted (in dollar per share) | $ / shares	20.52
Forfeited/canceled (in dollar per share) | $ / shares	0
Exercised/vested (in dollar per share) | $ / shares	0
Outstanding, ending balance (in dollar per share) | $ / shares	$ 25.41
Performance Stock
Restricted Stock and Restricted Stock Units, Shares
Outstanding, beginning balance (in shares) | shares	0
Granted (in shares) | shares	527
Forfeited/canceled (in shares) | shares	0
Exercised/vested (in shares) | shares	0
Outstanding, ending balance (in shares) | shares	527
Restricted Stock and Restricted Stock Units, Weighted Average Grant Date Fair Value
Outstanding, beginning balance (in dollar per share) | $ / shares	$ 0
Granted (in dollar per share) | $ / shares	23.96
Forfeited/canceled (in dollar per share) | $ / shares	0
Exercised/vested (in dollar per share) | $ / shares	0
Outstanding, ending balance (in dollar per share) | $ / shares	$ 23.96

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Earnings Per Share (Tables)

3 Months Ended

May 02, 2020

Earnings Per Share [Abstract]

Summary of basic and diluted net income per share attributable to common stockholders

The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average common shares outstanding for the thirteen weeks ended May 2, 2020 and May 4, 2019:

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Weighted-average common shares outstanding, used for basic computation	136,089,960	136,810,084
Plus: Incremental shares of potentially dilutive securities	2,337,780	3,652,488
Weighted-average number of common and dilutive potential common shares outstanding	138,427,740	140,462,572

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Debt and Credit Arrangements (Tables)

3 Months Ended

May 02, 2020

Debt Disclosure [Abstract]

Schedule of Debt

Debt consisted of the following at May 2, 2020, February 1, 2020 and May 4, 2019 (in thousands):

	May 2, 2020			February 1, 2020			May 4, 2019
ABL Facility	$	50,000		$	378,000		$	281,000
First Lien Term Loan	1,311,919			1,315,216			1,526,201
Unamortized debt discount and debt issuance cost	(11,747		)	(12,531		)	(17,287		)
Less: current portion	(15,377		)	(343,377		)	(246,377		)
Long-term debt	$	1,334,795		$	1,337,308		$	1,543,537

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Derivative Financial Instruments - Fair Values of Derivative Instruments (Details) - Designated as hedging instrument - USD ($) $ in Thousands	May 02, 2020	Feb. 01, 2020	May 04, 2019
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	$ (29,934)	$ (20,035)	$ (12,336)
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	$ (17,941)	(11,997)	(7,370)
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	$ (11,965)	(8,003)	(4,920)
Interest rate swaps
Derivatives, Fair Value [Line Items]
Notional Amount	1,200,000
Total liabilities	$ (59,840)	$ (40,035)	$ (24,626)

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Derivative Financial Instruments (Tables)

3 Months Ended

May 02, 2020

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):

						Fair Value at
Accounting for cash flow hedges	Notional Amount		Fixed Rate		Balance Sheet Classification	May 2, 2020			February 1, 2020			May 4, 2019
Interest rate swap	$	600,000	3.00	%	Other non-current liabilities	$	(29,934	)	$	(20,035	)	$	(12,336	)
Interest rate swap	360,000		3.00	%	Other non-current liabilities	(17,941		)	(11,997		)	(7,370		)
Interest rate swap	240,000		3.00	%	Other non-current liabilities	(11,965		)	(8,003		)	(4,920		)
Net carrying amount	$	1,200,000			Total liabilities	$	(59,840	)	$	(40,035	)	$	(24,626	)

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Interest Expense, net (Tables)

3 Months Ended

May 02, 2020

Other Income and Expenses [Abstract]

Summary of Interest Expense

The following details the components of interest expense for the periods presented (in thousands):

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
Interest on debt	$	19,643		$	25,851
Interest on capital lease and financing obligations	1,008			631
Debt issuance costs amortization	657			696
Original issue discount amortization	539			627
Capitalized interest	(3		)	(16		)
Interest expense, net	$	21,844		$	27,789

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Derivative Financial Instruments - Additional Information (Details) - Interest rate swaps $ in Thousands		3 Months Ended
	Nov. 13, 2018 derivative_instrument	May 02, 2020 USD ($)	May 04, 2019 USD ($)	Feb. 01, 2020 USD ($)	Feb. 13, 2019 USD ($)
Derivative [Line Items]
Number of derivative instruments entered | derivative_instrument	3
Amount of hedged item					$ 1,200,000
Average fixed interest rate					3.00%
Unrealized losses		$ 19,400	$ 5,200
Designated as hedging instrument
Derivative [Line Items]
Total liabilities		$ (59,840)	$ (24,626)	$ (40,035)

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	May 02, 2020	Feb. 01, 2020	May 04, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	5,000,000	5,000,000	5,000,000
Preferred stock, issued (in shares)	0	0	0
Preferred stock, outstanding (in shares)	0	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, authorized (in shares)	300,000,000	300,000,000	300,000,000
Common stock, issued (in shares)	142,349,000	140,723,000	139,836,000
Common stock, outstanding (in shares)	138,666,000	137,298,000	139,054,000
Treasury stock, at cost (in shares)	3,683,000	3,425,000	782,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 95,734	$ 35,798
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	40,839	38,670
Amortization of debt issuance costs and accretion of original issue discount	1,197	1,323
Other non-cash items, net	2,637	287
Stock-based compensation expense	5,514	3,844
Deferred income tax provision	1,590	4,501
Increase (decrease) in cash due to changes in:
Accounts receivable	12,469	13,921
Merchandise inventories	56,565	(33,259)
Prepaid expenses and other current assets	(200)	20,913
Other assets	(1,389)	(436)
Accounts payable	204,008	3,609
Accrued expenses	40,983	(45,926)
Other non-current liabilities	9,955	1,691
Net cash provided by operating activities	469,902	44,936
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net of disposals	(35,212)	(36,534)
Net cash used in investing activities	(35,212)	(36,534)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long term debt	(3,297)	(3,844)
Proceeds from ABL Facility	736,000	245,000
Payments on ABL Facility	(1,064,000)	(253,000)
Net cash received from stock option exercises	5,608	6,320
Acquisition of treasury stock	(6,073)	0
Other financing activities	(217)	(147)
Net cash used in financing activities	(331,979)	(5,671)
Net increase in cash and cash equivalents	102,711	2,731
Cash and cash equivalents at beginning of period	30,204	27,146
Cash and cash equivalents at end of period	132,915	29,877
Supplemental cash flow information:
Interest paid	18,418	25,018
Income taxes paid	3,872	2,965
Non-cash financing and investing activities:
Lease liabilities arising from obtaining right-of-use assets	65,893	49,440
Property additions included in accrued expenses	$ 21,734	$ 26,284

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Stock Incentive Plans

3 Months Ended

May 02, 2020

Share-based Payment Arrangement [Abstract]

Stock Incentive Plans

Stock Incentive Plans

On June 13, 2018, the Company’s board of directors adopted, and its stockholders approved, the BJ's Wholesale Club Holdings, Inc. 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. (f/k/a Beacon Holding Inc.), as amended (the "2011 Plan") and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holding, Inc.), as amended (the "2012 Director Plan"). No further grants will be made under the 2011 Plan or the 2012 Director Plan.

The 2018 Plan authorizes the issuance of 13,148,058 shares, including 985,369 shares that were reserved but not issued under the 2011 Plan and the 2012 Director Plan. If an award under the 2018 Plan, 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 grant under the 2018 Plan: (1) shares subject to a stock appreciation right ("SAR") that are not issued in connection with the stock settlement of the SAR upon its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan or 2012 Director Plan. As of May 2, 2020, there were 5,687,534 shares available for future issuance under the 2018 Plan.

The following table summarizes the Company’s stock award activity during the thirteen weeks ended May 2, 2020 (shares in thousands):

	Stock Options				Restricted Stock				Restricted Stock Units			Performance Stock
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding, February 1, 2020	5,213		$	14.00	1,445		$	25.22	30	$	25.83	—	$	—
Granted	441		25.07		683		25.07		2	20.52		527	23.96
Forfeited/canceled	(26	)	20.07		(26	)	24.29		—	—		—	—
Exercised/vested	(969	)	6.03		(254	)	25.07		—	—		—	—
Outstanding, May 2, 2020	4,659		$	16.67	1,848		$	24.85	32	$	25.41	527	$	23.96

Stock-based compensation expense was $5.5 million and $3.8 million for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively.

Employee Stock Purchase Plan

On June 14, 2018, the Company’s board of directors adopted and its stockholders approved the BJ's Wholesale Club Holdings, Inc. Employee Stock Purchase Plan (the "ESPP"), which became effective the day prior to the first day of public trading of the Company’s equity securities. The aggregate number of shares of common stock that were to be reserved for issuance under the ESPP was to be equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the board of directors. The offering under the ESPP commenced on January 1, 2019. As of May 2, 2020, 1,857,062 shares remained available for issuance. The amount of expense recognized for the thirteen weeks ended May 2, 2020 and May 4, 2019 was $0.1 million and $0.2 million, respectively.

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, 83,353 shares were reacquired to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended May 2, 2020 and no shares were reacquired in the thirteen weeks ended May 4, 2019. These reacquired shares were recorded as $2.1 million of treasury stock for the thirteen weeks ended May 2, 2020.

Share Repurchase Program

On December 19, 2019, the Company's board of directors authorized the repurchase of up to $250.0 million of the Company's outstanding common stock from time to time as market conditions warrant (the "Program"). The Program expires at the end of fiscal year 2021. The Company initiated the Program to mitigate potentially dilutive effects of stock options and shares of restricted stock granted by the Company, in addition to enhancing shareholder value. As of May 2, 2020, $246.0 million remained available to purchase under the Program. The Company repurchased 175,000 shares for $4.0 million during the first quarter of fiscal year 2020.

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Related Party Transactions

3 Months Ended

May 02, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

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 $9.4 million and $11.8 million of costs payable to Advantage Solutions Inc. for services rendered during the thirteen weeks ended May 2, 2020 and May 4, 2019, 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.

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Derivative Financial Instruments

3 Months Ended

May 02, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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% from February 13, 2019 to February 13, 2022. At May 2, 2020, February 1, 2020, and May 4, 2019, the Interest Rate Swaps were recorded as a liability of $59.8 million, $40.0 million and $24.6 million, respectively, with the net of tax amount recorded in other comprehensive loss.

The Company elected hedge accounting for the interest rate swap agreements, and as such, the effective portion of the losses was recorded as a component of other comprehensive loss. There were $19.4 million and $5.2 million of losses recorded in other comprehensive loss for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively.

The fair values of derivative instruments included on the consolidated balance sheets are as follows (in thousands):

						Fair Value at
Accounting for cash flow hedges	Notional Amount		Fixed Rate		Balance Sheet Classification	May 2, 2020			February 1, 2020			May 4, 2019
Interest rate swap	$	600,000	3.00	%	Other non-current liabilities	$	(29,934	)	$	(20,035	)	$	(12,336	)
Interest rate swap	360,000		3.00	%	Other non-current liabilities	(17,941		)	(11,997		)	(7,370		)
Interest rate swap	240,000		3.00	%	Other non-current liabilities	(11,965		)	(8,003		)	(4,920		)
Net carrying amount	$	1,200,000			Total liabilities	$	(59,840	)	$	(40,035	)	$	(24,626	)

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Related Party Transactions (Detail) - USD ($) $ in Millions	3 Months Ended
	May 02, 2020	May 04, 2019
Advantage Solutions Inc.
Related Party Transaction [Line Items]
Costs for services rendered	$ 9.4	$ 11.8

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Stock Incentive Plans - Additional Information (Detail) - USD ($)		3 Months Ended
	Jun. 27, 2019	May 02, 2020	May 04, 2019	Feb. 01, 2020	Dec. 19, 2019	Jun. 14, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)		300,000,000	300,000,000	300,000,000
Stock-based compensation expense		$ 5,500,000	$ 3,800,000
Common stock repurchases (in dollars per share)	$ 25.41
Shares reacquired to satisfy tax withholding (in shares)		83,353	0
Shares reacquired to satisfy tax withholding, value		$ 2,100,000
Share repurchase program, amount authorized for repurchase					$ 250,000,000.0
Share repurchase program, remaining amount authorized for repurchase		246,000,000.0
Common stock repurchases		$ 6,073,000
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued (in shares)	9,977,024
Treasury Stock, Common
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock repurchases (in shares)	2,500,000	175,000
Common stock repurchases		$ 4,000,000.0
2018 Incentive Award Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)		13,148,058
Number of shares reserved and not issued (in shares)		5,687,534
2011 Plan and the 2012 Director Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved and not issued (in shares)		985,369
2018 Employee Stock Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares reserved and not issued (in shares)		1,857,062				973,014
Stock-based compensation expense		$ 100,000	$ 200,000
Annual increase in number of shares reserved for issuance (in shares)						486,507
Annual increase in number of shares reserved for issuance, percent of shares outstanding						0.50%

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Revenue Recognition - Additional Information (Detail)	3 Months Ended
	May 02, 2020 USD ($) segment	May 04, 2019 USD ($)	Feb. 01, 2020 USD ($)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percentage of cash back earned	2.00%
Maximum annual cash back amount	$ 500
Cash back in form of electronic awards issued	$ 20
Cash back in form of electronic awards issued, expiration period	6 months
Club membership term	12 months
Number of reportable segments | segment	1
My BJ's Perks Mastercard
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percentage of cash back earned	5.00%
Card outside of BJ's
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percentage of cash back earned	2.00%
BJ's Perks Rewards - earned awards
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Deferred revenue	$ 28,600,000	$ 27,600,000	$ 26,700,000
BJ's Perks Rewards - royalty revenue
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Deferred revenue	14,800,000	13,300,000	14,800,000
Membership
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Deferred revenue	157,600,000	141,600,000	144,000,000.0
Gift card programs
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Deferred revenue	9,800,000	8,000,000.0	$ 10,300,000
Revenue recognized	$ 10,200,000	$ 11,100,000
Net sales | Revenue from rights concentration risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Concentration risk percentage	96.00%
Total revenues | Revenue from rights concentration risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Concentration risk percentage	94.00%

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Fair Value Measurements (Tables)

3 Months Ended

May 02, 2020

Fair Value Disclosures [Abstract]

Carrying Amount and Fair Value of Debt

The gross carrying amount and fair value of the Company’s debt at May 2, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,311,919	$	1,268,758
ABL Facility	50,000		50,000
Total Debt	$	1,361,919	$	1,318,758

The gross carrying amount and fair value of the Company’s debt at February 1, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,315,216	$	1,319,990
ABL Facility	378,000		378,000
Total Debt	$	1,693,216	$	1,697,990

The gross carrying amount and fair value of the Company’s debt at May 4, 2019 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,526,200	$	1,532,800
ABL Facility	281,000		281,000
Total Debt	$	1,807,200	$	1,813,800

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Revenue Recognition (Tables)

3 Months Ended

May 02, 2020

Revenue from Contract with Customer [Abstract]

Percentage of Net Sales Disaggregated by Category

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

	Thirteen Weeks Ended
	May 2, 2020	May 4, 2019
Grocery (1)	81%	74%
General Merchandise & Services	11%	13%
Gasoline and Other	8%	13%

(1)

Grocery division includes the legacy perishables, edible grocery and non-edible grocery division.

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Earnings Per Share - Summary of Basic and Diluted Net Income Per Share Attributable to Common Stockholders (Detail) - shares	3 Months Ended
	May 02, 2020	May 04, 2019
Earnings Per Share [Abstract]
Weighted-average common shares outstanding, used for basic computation (in shares)	136,089,960	136,810,084
Plus: Incremental shares of potentially dilutive securities (in shares)	2,337,780	3,652,488
Weighted-average number of common and dilutive potential common shares outstanding (in shares)	138,427,740	140,462,572

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Summary of Significant Accounting Policies

3 Months Ended

May 02, 2020

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 1, 2020 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the first quarter of fiscal year 2020 are not necessarily indicative of future results or results to be expected for fiscal year 2020. 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 2019, as filed with the Securities and Exchange Commission (the "SEC") on March 19, 2020.

Reclassification

We adjusted the statement of cash flows for the first quarter of fiscal year 2020 to reclassify the change in book overdraft amounts into the accounts payable and accrued expenses line items, all within net cash provided by operating activities.    

Recently Adopted Accounting Pronouncements

The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2019. 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 2020.

Fair Value Measurement (ASU 2018-13)

In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("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 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 adopted ASU 2018-13 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's 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. The Company adopted this standard at the beginning of fiscal year 2020 on a prospective basis. The adoption of this standard had no material impact on the Company's consolidated financial statements.

Goodwill Impairment (ASU 2017-04)

In January 2017, the FASB issued ASU 2017-04, which provides amendments to Accounting Standards Codification ("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 Company adopted ASU 2017-04 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's 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 changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 replaces 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 recognizes 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. The Company adopted ASU 2016-13 at the beginning of fiscal year 2020 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform (ASU 2020-04)

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

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Cover - shares	3 Months Ended
	May 02, 2020	May 22, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	May 02, 2020
Document Transition Report	false
Entity File Number	001-38559
Entity Registrant Name	BJ’S WHOLESALE CLUB HOLDINGS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	45-2936287
Entity Address, Address Line One	25 Research Drive
Entity Address, City or Town	Westborough,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01581
City Area Code	774
Local Phone Number	512-7400
Title of 12(b) Security	Common Stock, par value $0.01
Trading Symbol	BJ
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		138,606,855
Amendment Flag	false
Entity Central Index Key	0001531152
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--01-30

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Income Statement [Abstract]
Unrealized loss on cash flow hedge, income tax	$ 5,421	$ 1,460

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Revenue Recognition - Remaining Performance Obligations (Details) - BJ's Perks Rewards - royalty revenue - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-05-03 $ in Millions	May 02, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized	$ 13.0
Revenue expected to be recognized, period	9 months

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Debt and Credit Arrangements - Additional Information (Detail)			3 Months Ended
	Jan. 29, 2020 USD ($)	Nov. 01, 2019 USD ($)	May 02, 2020 USD ($)	May 04, 2019 USD ($)	Feb. 01, 2020 USD ($)
Debt Instrument [Line Items]
Proceeds from ABL Facility			$ 736,000,000	$ 245,000,000
ABL Facility
Debt Instrument [Line Items]
Debt instrument, decrease in basis spread upon achievement of net leverage ratio threshold			0.125%
Debt instrument, net leverage ratio threshold for interest rate adjustment			3.00
Outstanding loans			$ 50,000,000.0	281,000,000.0	$ 378,000,000
Outstanding letter of credit			22,100,000	$ 29,200,000	$ 17,500,000
Proceeds from ABL Facility		$ 200,000,000.0
ABL Facility | Revolving Credit Facility
Debt Instrument [Line Items]
Borrowing capacity			$ 950,000,000.0
Interest rate at end of period			1.45%	3.73%	2.78%
Borrowing availability			$ 770,600,000	$ 560,800,000	$ 496,300,000
ABL Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.25%
ABL Facility | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.75%
ABL Facility | Revolving Credit Facility | Base rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.25%
ABL Facility | Revolving Credit Facility | Base rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.75%
ABL Facility | Term Loan
Debt Instrument [Line Items]
Borrowing capacity			$ 50,000,000.0
ABL Facility | Term Loan | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			2.00%
ABL Facility | Term Loan | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			2.50%
ABL Facility | Term Loan | Base rate | Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.00%
ABL Facility | Term Loan | Base rate | Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.50%
First Lien Term Loan
Debt Instrument [Line Items]
Borrowing capacity	$ 1,315,200,000
Debt instrument, net leverage ratio threshold for interest rate adjustment			3.50
Interest rate at end of period			3.08%	5.47%	3.90%
Percentage of original principal amount required to pay in quarterly installments			0.25%
Write-off of deferred debt issuance cost	100,000	$ 2,000,000.0
Refinancing and third-party fees	$ 1,700,000
Term Loan outstanding			$ 1,311,919,000	$ 1,526,201,000	$ 1,315,216,000
Net leverage ratio (less than)			2.00
First Lien Term Loan | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	2.25%
First Lien Term Loan | Base rate
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate	1.25%

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Income Taxes (Detail)	3 Months Ended		12 Months Ended
	May 02, 2020	May 04, 2019	Jan. 30, 2021
Income Tax Disclosure [Line Items]
Effective income tax rate	21.50%	15.90%
Reduction in effective tax rate, excess tax benefits from stock-based compensation	3.70%
Reduction in effective tax rate, increase of prior year enhanced charitable contributions	1.60%
Scenario, Forecast
Income Tax Disclosure [Line Items]
Effective income tax rate			27.00%

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Fair Value Measurements

3 Months Ended

May 02, 2020

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.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair values of the Company’s derivative instruments are based on quotes received from third-party banks and represent the estimated amount the Company would pay to terminate the agreements taking into consideration current interest rates as well as the creditworthiness of the counterparties. These inputs are considered to be Level 2.

Financial Assets and Liabilities

The gross carrying amount and fair value of the Company’s debt at May 2, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,311,919	$	1,268,758
ABL Facility	50,000		50,000
Total Debt	$	1,361,919	$	1,318,758

The gross carrying amount and fair value of the Company’s debt at February 1, 2020 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,315,216	$	1,319,990
ABL Facility	378,000		378,000
Total Debt	$	1,693,216	$	1,697,990

The gross carrying amount and fair value of the Company’s debt at May 4, 2019 are as follows (in thousands):

	Carrying Amount		Fair Value
First Lien Term Loan	$	1,526,200	$	1,532,800
ABL Facility	281,000		281,000
Total Debt	$	1,807,200	$	1,813,800

The fair value of debt was based on quoted market prices and on borrowing rates available to the Company as of May 2, 2020, February 1, 2020 and May 4, 2019. These inputs are considered to be Level 2.

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company measures certain non-financial assets and liabilities, including long-lived assets, at fair value on a non-recurring basis.

The Company believes that the carrying amounts of its other financial instruments, including cash, accounts receivable, and accounts payable, approximates their carrying value due to the short-term maturities of these instruments.

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Interest Expense, net

3 Months Ended

May 02, 2020

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):

	Thirteen Weeks Ended
	May 2, 2020			May 4, 2019
Interest on debt	$	19,643		$	25,851
Interest on capital lease and financing obligations	1,008			631
Debt issuance costs amortization	657			696
Original issue discount amortization	539			627
Capitalized interest	(3		)	(16		)
Interest expense, net	$	21,844		$	27,789

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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Total revenues	$ 3,797,605	$ 3,143,136
Cost of sales	3,060,893	2,568,977
Selling, general and administrative expenses	590,361	501,181
Pre-opening expense	2,601	2,296
Operating income	143,750	70,682
Interest expense, net	21,844	27,789
Income from continuing operations before income taxes	121,906	42,893
Provision for income taxes	26,164	6,808
Income from continuing operations	95,742	36,085
Loss from discontinued operations, net of income taxes	(8)	(287)
Net income	$ 95,734	$ 35,798
Income per share attributable to common stockholders—basic:
Income from continuing operations (in usd per share)	$ 0.70	$ 0.26
Loss from discontinued operations (in usd per share)	0	0
Net income (in usd per share)	0.70	0.26
Income per share attributable to common stockholders—diluted:
Income from continuing operations (in usd per share)	0.69	0.26
Loss from discontinued operations (in usd per share)	0	(0.01)
Net income (in usd per share)	$ 0.69	$ 0.25
Weighted average number of common shares outstanding:
Basic (in shares)	136,089,960	136,810,084
Diluted (in shares)	138,427,740	140,462,572
Other comprehensive loss:
Unrealized loss on cash flow hedge, net of income tax	$ (13,942)	$ (3,755)
Total other comprehensive loss	(13,942)	(3,755)
Total comprehensive income	81,792	32,043
Product
Total revenues	3,718,040	3,069,763
Membership
Total revenues	$ 79,565	$ 73,373

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Description of Business

3 Months Ended

May 02, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business

BJ’s Wholesale Club Holdings, Inc. and its wholly owned subsidiaries is a leading warehouse club operator in the eastern United States. As of May 2, 2020, the Company operated 218 warehouse clubs and 145 gas stations in 17 states.

The Company follows, and reports based on the National Retail Federation’s fiscal calendar. The thirteen week periods ended May 2, 2020 and May 4, 2019 are referred to as the "first quarter of fiscal year 2020" and the "first quarter of fiscal year 2019," respectively.

The coronavirus disease 2019 (“COVID-19”) pandemic has severely impacted the economies of the U.S. and other countries around the world. In the preparation of these financial statements and related disclosures we have assessed the impact that COVID-19 has had on our estimates, assumptions and accounting policies and made additional disclosures, as necessary.

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Fair Value Measurements (Detail) - USD ($) $ in Thousands	May 02, 2020	Feb. 01, 2020	May 04, 2019
Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	$ 1,361,919	$ 1,693,216	$ 1,807,200
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	1,318,758	1,697,990	1,813,800
First Lien Term Loan | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	1,311,919	1,315,216	1,526,200
First Lien Term Loan | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	1,268,758	1,319,990	1,532,800
ABL Facility | Carrying Amount
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	50,000	378,000	281,000
ABL Facility | Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt	$ 50,000	$ 378,000	$ 281,000

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Revenue Recognition - Summary of Disaggregation of Revenue (Detail)	3 Months Ended
	May 02, 2020	May 04, 2019
Grocery
Disaggregation of Revenue [Line Items]
Revenue recognized	81.00%	74.00%
General Merchandise & Services
Disaggregation of Revenue [Line Items]
Revenue recognized	11.00%	13.00%
Gasoline and Other
Disaggregation of Revenue [Line Items]
Revenue recognized	8.00%	13.00%

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Interest Expense, net (Detail) - USD ($) $ in Thousands	3 Months Ended
	May 02, 2020	May 04, 2019
Other Income and Expenses [Abstract]
Interest on debt	$ 19,643	$ 25,851
Interest on capital lease and financing obligations	1,008	631
Debt issuance costs amortization	657	696
Original issue discount amortization	539	627
Capitalized interest	(3)	(16)
Interest expense, net	$ 21,844	$ 27,789

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Income Taxes

3 Months Ended

May 02, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company projects the estimated annual effective tax rate for fiscal year 2020 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 21.5% and 15.9% for the thirteen weeks ended May 2, 2020 and May 4, 2019, respectively. The effective tax rate for the first quarter of fiscal year 2020 differs from our annual effective tax rate primarily due to excess tax benefits from stock-based compensation in the first quarter which reduced the effective tax rate by 3.7% and increase of prior year enhanced charitable contributions in the same period which reduced the effective tax rate by 1.6%.

We are subject to taxation in the U.S. federal and various state taxing jurisdictions. In general, the Company’s tax years from 2015 forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities.

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Debt and Credit Arrangements

3 Months Ended

May 02, 2020

Debt Disclosure [Abstract]

Debt and Credit Arrangements

Debt and Credit Arrangements

Debt consisted of the following at May 2, 2020, February 1, 2020 and May 4, 2019 (in thousands):

	May 2, 2020			February 1, 2020			May 4, 2019
ABL Facility	$	50,000		$	378,000		$	281,000
First Lien Term Loan	1,311,919			1,315,216			1,526,201
Unamortized debt discount and debt issuance cost	(11,747		)	(12,531		)	(17,287		)
Less: current portion	(15,377		)	(343,377		)	(246,377		)
Long-term debt	$	1,334,795		$	1,337,308		$	1,543,537

ABL Facility

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 agreement governing the ABL Facility (the "ABL 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, which is scheduled to mature on August 17, 2023.

At May 2, 2020, there was $50.0 million outstanding in loans under the ABL Facility and $22.1 million in outstanding letters of credit. As of May 2, 2020, the interest rate on the revolving credit facility was 1.45%, and unused capacity was $770.6 million.

At February 1, 2020, there was $378.0 million outstanding in loans under the ABL Facility and $17.5 million in outstanding letters of credit. As of February 1, 2020, the interest rate on the revolving credit facility was 2.78%, and unused capacity was $496.3 million.

At May 4, 2019, there was $281.0 million outstanding in loans under the ABL Facility and $29.2 million in outstanding letters of credit. As of May 4, 2019, the interest rate on the revolving credit facility was 3.73%, and unused capacity was $560.8 million.

First Lien Term Loan

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

On November 1, 2019, the Company borrowed $200.0 million from the ABL Facility. The proceeds from the Company's borrowing were used to pay a portion of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $2.0 million of previously capitalized deferred debt issuance costs and original issue discount.

On January 29, 2020, the Company amended its First Lien Term Loan to reduce the applicable interest rates. As amended, the First Lien Term Loan has an initial principal amount of $1,315.2 million and interest is calculated either at LIBOR plus 225 basis points or a base rate plus 125 basis points. Total fees associated with the refinancing were approximately $1.7 million. The Company wrote-off $0.1 million of previously capitalized debt issuance costs and original issue discount and expensed $1.7 million of new third-party fees.

At May 2, 2020, there was $1,311.9 million outstanding on the First Lien Term Loan. At February 1, 2020, there was $1,315.2 million outstanding on the First Lien Term Loan. At May 4, 2019, there was $1,526.2 million outstanding on the First Lien Term Loan. At May 2, 2020, the Company's net leverage ratio was less than 2.00 and the interest rate for the First Lien Term Loan was 3.08%. At February 1, 2020, the interest rate for the First Lien Term Loan was 3.90%. At May 4, 2019, the interest rate for the First Lien Term Loan was 5.47%.

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Stock Incentive Plans (Tables)

3 Months Ended

May 02, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Company's Stock Award Activity

The following table summarizes the Company’s stock award activity during the thirteen weeks ended May 2, 2020 (shares in thousands):

	Stock Options				Restricted Stock				Restricted Stock Units			Performance Stock
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Outstanding, February 1, 2020	5,213		$	14.00	1,445		$	25.22	30	$	25.83	—	$	—
Granted	441		25.07		683		25.07		2	20.52		527	23.96
Forfeited/canceled	(26	)	20.07		(26	)	24.29		—	—		—	—
Exercised/vested	(969	)	6.03		(254	)	25.07		—	—		—	—
Outstanding, May 2, 2020	4,659		$	16.67	1,848		$	24.85	32	$	25.41	527	$	23.96

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 02, 2020

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 1, 2020 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the first quarter of fiscal year 2020 are not necessarily indicative of future results or results to be expected for fiscal year 2020. 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.

Reclassification

Reclassification

We adjusted the statement of cash flows for the first quarter of fiscal year 2020 to reclassify the change in book overdraft amounts into the accounts payable and accrued expenses line items, all within net cash provided by operating activities. 

Recently Adopted and Recently Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2019. 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 2020.

Fair Value Measurement (ASU 2018-13)

In August 2018, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("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 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 adopted ASU 2018-13 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's 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. The Company adopted this standard at the beginning of fiscal year 2020 on a prospective basis. The adoption of this standard had no material impact on the Company's consolidated financial statements.

Goodwill Impairment (ASU 2017-04)

In January 2017, the FASB issued ASU 2017-04, which provides amendments to Accounting Standards Codification ("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 Company adopted ASU 2017-04 at the beginning of fiscal year 2020 on a prospective basis and the adoption of this standard did not have a material impact on the Company's 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 changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 replaces 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 recognizes 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. The Company adopted ASU 2016-13 at the beginning of fiscal year 2020 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recently Issued Accounting Pronouncements

Reference Rate Reform (ASU 2020-04)

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the impact of the new guidance on the Company's consolidated financial statements.

XML

Description of Business (Detail) - May 02, 2020	state	warehouse_club	gas_station
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of warehouses operated		218	145
Number of states in country	17

XML

Earnings Per Share - Additional Information (Detail) - shares	3 Months Ended
	May 02, 2020	May 04, 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)	875,894	286,124
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)	780,256	209,149