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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 October 29, 2022
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-20221029_g1.jpg
BJ’S WHOLESALE CLUB HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
_______________________________
Delaware45-2936287
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
350 Campus Drive
MarlboroughMassachusetts
01752
(Address of principal executive offices)(Zip Code)
(774512-7400
(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 classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01BJNew 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 filerAccelerated filer
Non-accelerated filerSmaller 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 November 16, 2022, the registrant had 134,434,269 shares of common stock, $0.01 par value per share, outstanding.




Table of Contents
Page

2


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®, ExpressPay® 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;
•    "ABL Facility" means the Company’s senior secured asset based revolving credit and term facility that was terminated on July 28, 2022;
"ABL Revolving Facility" means the Company's revolving credit facility entered into on July 28, 2022;
"ABL Revolving Commitment" means the aggregate committed amount of $1.2 billion under the ABL Revolving Facility
•    "First Lien Term Loan" means the Company’s senior secured first lien term loan facility;
•    "fiscal year 2021" means the 52 weeks ended January 29, 2022;
•    "fiscal year 2022" means the 52 weeks ending January 28, 2023;  
•    "GAAP" means generally accepted accounting principles in the United States of America;
•    "ESPP" means the Company's Employee Stock Purchase Plan; and
•    "the Acquisition" means the Company's acquisition of the assets and operations of four distribution centers and the related private transportation fleet from Burris Logistics, LLC on May 2, 2022.

3


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value)
(Unaudited)
October 29, 2022January 29, 2022October 30, 2021
ASSETS
Current assets:
Cash and cash equivalents$34,644 $45,436 $84,691 
Accounts receivable, net251,978 173,951 200,315 
Merchandise inventories1,504,368 1,242,935 1,255,659 
Prepaid expenses and other current assets72,285 54,734 58,622 
Total current assets1,863,275 1,517,056 1,599,287 
Operating lease right-of-use assets, net2,163,504 2,131,986 2,151,255 
Property and equipment, net1,296,151 942,331 880,904 
Goodwill1,008,816 924,134 924,134 
Intangibles, net117,814 124,640 127,260 
Deferred income taxes4,341 5,507 5,167 
Other assets25,002 23,240 22,233 
Total assets$6,478,903 $5,668,894 $5,710,240 
LIABILITIES
Current liabilities:
Short-term debt$295,000 $ $ 
Current portion of operating lease liabilities176,659 141,453 137,036 
Accounts payable1,363,734 1,112,783 1,235,763 
Accrued expenses and other current liabilities764,572 748,245 731,297 
Total current liabilities2,599,965 2,002,481 2,104,096 
Long-term operating lease liabilities2,085,625 2,059,760 2,082,287 
Long-term debt600,123 748,568 748,149 
Deferred income taxes70,432 52,850 33,995 
Other non-current liabilities179,883 157,127 173,977 
Commitments and contingencies (see Note 5)
STOCKHOLDERS’ EQUITY
Preferred stock; par value $0.01; 5,000 shares authorized, and no shares issued
   
Common stock, par value $0.01300,000 shares authorized, 146,243 shares issued and 134,429 outstanding at October 29, 2022; 145,451 shares issued and 135,506 outstanding at January 29, 2022; and 145,318 shares issued and 136,075 outstanding at October 30, 2021
1,461 1,454 1,453 
Additional paid-in capital939,855 902,704 889,142 
Accumulated earnings514,712 131,313 23,745 
Accumulated other comprehensive income (loss)2,010 1,305 (2,199)
Treasury stock, at cost, 11,814 shares at October 29, 2022; 9,945 shares at January 29, 2022; and 9,243 shares at October 30, 2021
(515,163)(388,668)(344,405)
Total stockholders’ equity942,875 648,108 567,736 
Total liabilities and stockholders’ equity$6,478,903 $5,668,894 $5,710,240 
The accompanying notes are an integral part of the condensed consolidated financial statements.
4


BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
October 29, 2022October 30, 2021
Net sales$4,685,834 $4,172,594 
Membership fee income99,485 91,493 
Total revenues4,785,319 4,264,087 
Cost of sales3,908,219 3,472,869 
Selling, general and administrative expenses674,426 617,991 
Pre-opening expenses10,706 3,071 
Operating income191,968 170,156 
Interest expense, net12,450 11,854 
Income from continuing operations before income taxes179,518 158,302 
Provision for income taxes48,124 31,700 
Income from continuing operations131,394 126,602 
Loss from discontinued operations, net of income taxes(1,452)(85)
Net income$129,942 $126,517 
Income per share attributable to common stockholders—basic:
Income from continuing operations$0.98 $0.93 
Loss from discontinued operations(0.01) 
Net income$0.97 $0.93 
Income per share attributable to common stockholders—diluted:
Income from continuing operations$0.96 $0.92 
Loss from discontinued operations(0.01) 
Net income$0.95 $0.92 
Weighted average shares of common stock outstanding:
Basic134,091 135,582 
Diluted136,621 138,005 
Other comprehensive income:
Amounts released from other comprehensive income, net of tax$ $733 
Unrealized gain on cash flow hedge, net of income tax provision of $1,279, at October 30, 2021
 3,293 
Total other comprehensive income 4,026 
Total comprehensive income$129,942 $130,543 
The accompanying notes are an integral part of the condensed consolidated financial statements.

5


BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands, except per share amounts)
(Unaudited)

Thirty-Nine Weeks Ended
October 29, 2022October 30, 2021
Net sales$14,090,673 $12,042,830 
Membership fee income294,897 266,634 
Total revenues14,385,570 12,309,464 
Cost of sales11,857,263 10,027,991 
Selling, general and administrative expenses1,961,606 1,816,014 
Pre-opening expenses21,508 5,265 
Operating income545,193 460,194 
Interest expense, net31,166 47,567 
Income from continuing operations before income taxes514,027 412,627 
Provision for income taxes129,165 93,442 
Income from continuing operations384,862 319,185 
Loss from discontinued operations, net of income taxes(1,466)(101)
Net income$383,396 $319,084 
Income per share attributable to common stockholders—basic:
Income from continuing operations$2.87 $2.35 
Loss from discontinued operations(0.01) 
Net income$2.86 $2.35 
Income per share attributable to common stockholders—diluted:
Income from continuing operations$2.82 $2.31 
Loss from discontinued operations(0.01) 
Net income$2.81 $2.31 
Weighted average shares of common stock outstanding:
Basic134,225 135,604 
Diluted136,630 138,288 
Other comprehensive income:
Amounts released from other comprehensive income, net of tax$117 $8,909 
Unrealized gain on cash flow hedge, net of income tax provision of $229 and $3,662, respectively
588 9,420 
Total other comprehensive income 705 18,329 
Total comprehensive income$384,101 $337,413 
The accompanying notes are an integral part of the consolidated financial statements.
6


BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands)
(Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated EarningsAccumulated
Other
Comprehensive
Income
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balance, January 29, 2022145,451 $1,454 $902,704 $131,313 $1,305 (9,945)$(388,668)$648,108 
Net income— — — 112,450 — — — 112,450 
Amounts released from other comprehensive income, net of tax— — — — 117 — — 117 
Unrealized gain on cash flow hedge, net of tax— — — — 588 — — 588 
Common stock issued under stock incentive plans490 5 (5)— — — —  
Stock-based compensation expense— — 9,115 — — — — 9,115 
Net cash received from option exercises— — 2,306 — — — — 2,306 
Treasury stock purchases— — — — — (801)(51,342)(51,342)
Balance, April 30, 2022145,941 1,459 914,120 243,763 2,010 (10,746)(440,010)721,342 
Net income— — — 141,007 — — — 141,007 
Common stock issued under stock incentive plans172 2 (2)— — — —  
Common stock issued under ESPP44 — 2,331 — — — — 2,331 
Stock-based compensation expense— — 9,387 — — — — 9,387 
Net cash received from option exercises— — 2,712 — — — — 2,712 
Treasury stock purchases— — — — — (359)(23,188)(23,188)
Balance, July 30, 2022146,157 1,461 928,548 384,770 2,010 (11,105)(463,198)853,591 
Net income— — — 129,942 — — — 129,942 
Common stock issued under stock incentive plans86 — — — — — — — 
Stock-based compensation expense— — 9,463 — — — — 9,463 
Net cash received from option exercises— — 1,844 — — — — 1,844 
Treasury stock purchases— — — — — (709)(51,965)(51,965)
Balance, October 29, 2022146,243 $1,461 $939,855 $514,712 $2,010 (11,814)$(515,163)$942,875 
The accompanying notes are an integral part of the condensed consolidated financial statements.











7


BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Amounts in thousands)
(Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated
Earnings (Deficit)
Accumulated
Other
Comprehensive
Loss
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balance, January 30, 2021143,428 $1,434 $826,377 $(295,339)$(20,528)(6,236)$(192,617)$319,327 
Net income— — — 81,579 — — — 81,579 
Amounts released from other comprehensive income, net of tax— — — — 4,665 — — 4,665 
Unrealized loss on cash flow, net of tax— — — — 3,187 — — 3,187 
Common stock issued under stock incentive plans590 6 (6)— — — —  
Stock-based compensation expense— — 27,300 — — — — 27,300 
Net cash received from option exercises— — 1,497 — — — — 1,497 
Treasury stock purchases— — — — — (542)(24,031)(24,031)
Balance, May 1, 2021144,018 1,440 855,168 (213,760)(12,676)(6,778)(216,648)413,524 
Net income— — — 110,988 — — — 110,988 
Amounts released from other comprehensive income, net of tax— — — — 3,511 — — 3,511 
Unrealized loss on cash flow, net of tax— — — — 2,940 — — 2,940 
Common stock issued under stock incentive plans223 2 (2)— — — —  
Common stock issued under ESPP59 1 1,876 — — — — 1,877 
Stock-based compensation expense— — 7,334 — — — — 7,334 
Net cash received from option exercises— — 3,416 — — — — 3,416 
Treasury stock purchases— — — — — (1,175)(55,238)(55,238)
Balance, July 31, 2021144,300 1,443 867,792 (102,772)(6,225)(7,953)(271,886)488,352 
Net income— — — 126,517 — — — 126,517 
Amounts released from other comprehensive income, net of tax— — — — 733 — — 733 
Unrealized loss on cash flow, net of tax— — — — 3,293 — — 3,293 
Common stock issued under stock incentive plans1,018 10(10)— — — —  
Stock-based compensation expense— — 7,794 — — — — 7,794 
Net cash received from option exercises— — 13,566 — — — — 13,566 
Treasury stock purchases— — — — — (1,290)(72,519)(72,519)
Balance, October 30, 2021145,318 $1,453 $889,142 $23,745 $(2,199)(9,243)$(344,405)$567,736 
The accompanying notes are an integral part of the condensed consolidated financial statements.
8


BJ’S WHOLESALE CLUB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(Unaudited)
Thirty-Nine Weeks Ended
October 29, 2022October 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income$383,396 $319,084 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization149,259 135,664 
Amortization of debt issuance costs and accretion of original issue discount2,282 2,555 
Debt extinguishment charges687 657 
Stock-based compensation expense27,965 42,428 
Deferred income tax provision (benefit)18,474 (17,659)
Changes in operating leases and other non-cash items26,235 6,112 
Increase (decrease) in cash due to changes in:
Accounts receivable(73,162)(27,596)
Merchandise inventories(173,361)(49,964)
Prepaid expenses and other current assets(5,248)(13,841)
Other assets(444)(2,882)
Accounts payable250,951 247,689 
Accrued expenses and other current liabilities(3,802)72,525 
Other non-current liabilities9,625 18,403 
Net cash provided by operating activities612,857 733,175 
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net of disposals(294,308)(222,498)
Proceeds from sale leaseback transactions11,092 19,080 
Acquisitions(376,521) 
Net cash used in investing activities(659,737)(203,418)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on long term debt(50,000) 
Payments on First Lien Term Loan(100,000)(100,000)
Proceeds from revolving lines of credit1,110,000  
Payments on revolving lines of credit(815,000)(260,000)
Debt issuance costs paid(2,733) 
Net cash received from stock option exercises6,545 18,479 
Net cash received from ESPP2,331 1,877 
Treasury stock purchases(127,458)(149,449)
Proceeds from financing obligations16,949 1,333 
Other financing activities(4,546)(824)
Net cash provided by (used in) financing activities36,088 (488,584)
Net increase (decrease) in cash and cash equivalents(10,792)41,173 
Cash and cash equivalents at beginning of period45,436 43,518 
Cash and cash equivalents at end of period$34,644 $84,691 
Supplemental cash flow information:
Interest paid$25,031 $34,189 
Income taxes paid134,021 100,753 
Operating lease liabilities arising from obtaining right-of-use assets190,803 213,642 
Non-cash financing and investing activities:
Finance lease liabilities arising from obtaining right-of-use assets7,443  
Financing obligations arising from failed sale leasebacks3,487  
Property additions included in accrued expenses29,192 25,445 
The accompanying notes are an integral part of the condensed consolidated financial statements.
9


NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
BJ’s Wholesale Club Holdings, Inc. and its wholly-owned subsidiaries is a leading warehouse club operator concentrated primarily on the east coast of the United States. As of October 29, 2022, the Company operated 232 warehouse clubs and 163 gas stations in 18 states.
The Company follows and reports based on the National Retail Federation’s fiscal calendar. The thirteen week periods ended October 29, 2022 and October 30, 2021 are referred to herein as the "third quarter of fiscal year 2022" and the "third quarter of fiscal year 2021," respectively.
Events and global business conditions such as inflation, the ongoing coronavirus ("COVID-19") pandemic and the war in Ukraine have resulted in certain impacts to the global economy, including market disruptions, volatility in fuel costs and supply chain challenges. During the third quarter of fiscal year 2022 we continued to experience elevated supply chain costs, including increased commodity prices, logistics, and procurement costs. We expect these market disruptions and inflationary pressures to continue throughout 2022.

On May 2, 2022, the Company closed the previously announced acquisition of the assets and operations of four distribution centers and the related private transportation fleet from Burris Logistics, LLC. The Company financed the purchase price with a combination of available cash and borrowings under the ABL Facility. See Note 12, "Acquisitions" of our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.
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 GAAP. 
The condensed consolidated balance sheet as of January 29, 2022 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the third quarter of fiscal year 2022 are not necessarily indicative of future results or results to be expected for fiscal year 2022. 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 condensed 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 2021, as filed with the Securities and Exchange Commission on March 17, 2022.
Recently Adopted Accounting Pronouncements
The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2021 included in its Annual Report on Form 10-K for the fiscal year 2021. There have been no material changes to these accounting policies and no material pronouncements adopted.
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.
Net sales—The Company recognizes net sales at clubs and gas stations when the customer takes possession of the goods and tenders payment. Sales tax is recorded as a liability at the point of sale. Revenue is recorded at the point of sale based on the
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transaction price on the shelf sign, net of any applicable discounts, sales tax 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. The following tables summarize the Company’s point of sale transactions at clubs and gas stations, excluding sales tax, as a percentage of both net sales and total revenues:
Thirteen Weeks Ended
October 29, 2022October 30, 2021
Point of sale transactions, excluding sales tax, as a percent of net sales
92%
94%
Point of sale transactions, excluding sales tax, as a percent of total revenues
90%
92%
Thirty-Nine Weeks Ended
October 29, 2022October 30, 2021
Point of sale transactions, excluding sales tax, as a percent of net sales92 %93 %
Point of sale transactions, excluding sales tax, as a percent of total revenues90 %91 %
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 $10 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 on the Company’s website or app. 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 $44.5 million at October 29, 2022, $30.3 million at January 29, 2022 and $29.3 million at October 30, 2021.
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 $23.3 million, $17.8 million and $19.1 million at October 29, 2022, January 29, 2022 and October 30, 2021, respectively. The timing of revenue recognition is driven by actual customer activities, such as redemptions and expirations. As of October 29, 2022, the Company expects to recognize $21.7 million by the end of fiscal year 2022 and expects the remainder to be recognized in the periods 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 app and purchase gasoline at the Company’s gas stations for the duration of the membership, which is generally 12 months. As the Company has the obligation to provide access to its clubs, website, app 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 $178.3 million, $174.9 million and $168.1 million at October 29, 2022, January 29, 2022 and October 30, 2021, respectively.
Gift Card Program—The Company sells BJ’s gift cards in both physical and digital format, which allows 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 as 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 $12.1 million, $11.8 million and $10.3 million at October 29, 2022, January 29, 2022 and October 30, 2021, respectively. The Company recognized $12.2 million and $8.9 million of revenue from gift card redemptions in the third quarter of fiscal year 2022 and third quarter of fiscal year 2021, respectively. The Company recognized $35.4 million and $27.3 million of revenue from gift card redemptions in the thirty-nine weeks ended October 29, 2022 and October 30, 2021, respectively.
11


Disaggregation of Revenue
The Company’s club retail operations, which include retail club and other sales procured from our clubs and distribution centers, represent substantially all of its consolidated total revenues, and are the Company’s only reportable segment. 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
October 29, 2022October 30, 2021
Grocery70 %72 %
General Merchandise and Services10 %12 %
Gasoline and Other20 %16 %
Thirty-Nine Weeks Ended
October 29, 2022October 30, 2021
Grocery67 %71 %
General Merchandise and Services11 %14 %
Gasoline and Other22 %15 %
4. Debt and Credit Arrangements
The following table summarizes the Company’s debt (in thousands):
October 29, 2022January 29, 2022October 30, 2021
ABL Revolving Facility$295,000 $ $ 
ABL Facility 50,000 50,000 
First Lien Term Loan601,920 701,920 701,920 
Unamortized debt discount and debt issuance cost(1,797)(3,352)(3,771)
Less: current portion(295,000)  
Long-term debt$600,123 $748,568 $748,149 
ABL Revolving Facility
On July 28, 2022, the Company entered into the ABL Revolving Facility with an ABL Revolving Commitment of $1.2 billion pursuant to that certain credit agreement (the "Credit Agreement") with Bank of America, N.A., as administrative agent and collateral agent, and the other lenders party thereto. The maturity date of the ABL Revolving Facility is July 28, 2027. As part of this transaction, the Company extinguished the ABL Facility.
Revolving loans under the ABL Revolving Facility are available in an aggregate amount equal to the lesser of the aggregate ABL Revolving Commitment or a borrowing base based on the value of certain inventory, accounts and credit card receivables, subject to specified advance rebates and reserves as set forth in the Credit Agreement. Indebtedness under the ABL Revolving Facility is secured by substantially all of the assets (other than real estate) of the Company and its subsidiaries, subject to customary exceptions. As amended, interest on the ABL Revolving Facility is calculated either at the Secured Overnight Financing Rate ("SOFR") plus a range of 100 to 125 basis points or a base rate plus 0 to 25 basis points, based on excess availability. The Company will also pay an unused commitment fee of 20 basis points per annum on the unused ABL Revolving Commitment. Each borrowing is for a period of one, three, or six months, as selected by the Company, or for such other period that is twelve months or less requested by the Company and consented to by the lenders and administrative agent.
The ABL Revolving Facility places certain restrictions upon the Borrower’s, and its restricted subsidiaries’, ability to, among other things, incur additional indebtedness, pay dividends and make certain loans, investments and divestitures. The ABL Revolving Facility contains customary events of default (including payment defaults, cross-defaults to certain of our other
12


indebtedness, breach of representations and covenants and change of control). The occurrence of an event of default under the ABL Revolving Facility would permit the lenders to accelerate the indebtedness and terminate the ABL Revolving Facility.
At October 29, 2022, there were $295.0 million outstanding in loans under the ABL Revolving Facility and $12.7 million in outstanding letters of credit. The interest rate on the ABL Revolving Facility was 4.73% and unused capacity was $774.8 million.
ABL Facility - Former Credit Agreement
The ABL Revolving Facility replaced the ABL Facility, which was comprised of a $950.0 million revolving credit facility and a $50.0 million term loan.
Interest on the ABL Facility was 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 was 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.
At January 29, 2022, there were $50.0 million outstanding in loans under the ABL Facility and $12.7 million in outstanding letters of credit. The interest rate on the ABL Facility was 1.23%, the interest rate on the term loan was 2.10% and unused capacity was $886.9 million.
At October 30, 2021, there were $50.0 million outstanding in loans under the ABL Facility and $19.4 million in outstanding letters of credit. The interest rate on the ABL Facility was 1.20%, the interest rate of the term loan was 2.08% and unused capacity was $930.6 million.
First Lien Term Loan
The Company’s First Lien Term Loan matures 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 April 30, 2021, the Company used $100.0 million of cash and cash equivalents to pay $100.0 million of the principal amount outstanding on the First Lien Term Loan. In connection with the payment, the Company expensed $0.7 million of previously capitalized debt issuance costs and original issue discount.
On October 26, 2022, the Company repaid $100.0 million of the principal amount outstanding on the First Lien Term Loan. This repayment was funded with borrowings under the Company's ABL Revolving Facility. In connection with the repayment, the Company expensed $0.3 million of previously capitalized debt issuance costs and original issue discount.
There was $601.9 million outstanding on the First Lien Term Loan at October 29, 2022, and $701.9 million outstanding at both January 29, 2022 and October 30, 2021. Interest rates for the First Lien Term Loan were 5.35%, 2.11% and 2.09% at October 29, 2022, January 29, 2022 and October 30, 2021, respectively.
5. 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 condensed consolidated financial statements.
6. 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
13


employees and non-employee directors under the Fourth Amended and Restated 2011 Stock Option Plan of BJ’s Wholesale Club, Inc. (f/k/a Beacon Holding Inc.), as amended (the "2011 Plan") and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holding, Inc.), as amended (the "2012 Director Plan"). No further grants will be made under the 2011 Plan or the 2012 Director Plan.
The 2018 Plan authorizes the issuance of 13,148,058 shares, including 985,369 shares that were reserved but not issued under the 2011 Plan and the 2012 Director Plan. If an award under the 2018 Plan, the 2011 Plan or the 2012 Director Plan is forfeited, expires or is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2018 Plan. Additionally, shares tendered or withheld to satisfy grant or exercise price, or tax withholding obligations associated with an award under the 2018 Plan, the 2011 Plan or the 2012 Director Plan will be added to the shares authorized for grant under the 2018 Plan. The following shares may not be used again for grant under the 2018 Plan: (1) shares subject to a stock appreciation right ("SAR") that are not issued in connection with the stock settlement of the SAR upon its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan or 2012 Director Plan. As of October 29, 2022, there were 5,289,133 shares available for future issuance under the 2018 Plan.
On April 16, 2021, the Compensation Committee approved a modification to the equity awards agreements under the 2011 Plan, 2012 Director Plan and 2018 Plan. In the event that an employee is terminated due to death or disability, the modified equity award agreements provide for: (i) full vesting of all time-based awards, including restricted stock awards and stock options, (ii) pro-rata vesting of all performance-based awards, including performance share units, based on actual performance as of the end of the applicable performance period, pro-rated based on the period of employment during the applicable performance period, and (iii) the extension of the post-termination exercise window for vested stock options.
The following table summarizes the Company’s stock award activity during the thirty-nine weeks ended October 29, 2022 (shares in thousands):
Stock OptionsRestricted StockRestricted Stock UnitsPerformance Stock
SharesWeighted
Average
Exercise
Price
SharesWeighted
Average
Grant
Date Fair
Value
SharesWeighted
Average
Grant
Date Fair
Value
SharesWeighted
Average
Grant
Date Fair
Value
Outstanding, January 29, 20222,282 $19.68 1,053 $34.36 26 $46.82 674 $39.76 
Granted  310 67.43 24 58.61 183 67.54 
Forfeited/canceled(3)25.07 (20)39.76   (4)44.45 
Exercised/vested(433)15.86 (585)31.25 (26)46.82   
Outstanding, October 29, 20221,846 $20.57 758 $50.17 24 $58.61 853 $45.70 
Stock-based compensation expense was $9.5 million and $7.8 million for the thirteen weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation was $28.0 million and $42.4 million for the thirty-nine weeks ended October 29, 2022 and October 30, 2021, respectively. Stock-based compensation expense in the thirty-nine weeks ended October 30, 2021 included $17.5 million of stock-based compensation related to the modification of stock awards associated with the passing of a former executive.
On June 14, 2018, the Company’s board of directors adopted, and its stockholders approved, the ESPP, which became effective July 1, 2018. The aggregate number of shares of common stock that were to be reserved for issuance under the ESPP was to be equal to the sum of (i) 973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A) 486,507 shares, (B) 0.5% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the Company's board of directors. The offering under the ESPP commenced on January 1, 2019. The amount of expense recognized for the thirteen weeks ended October 29, 2022 and October 30, 2021 was $0.3 million and $0.2 million, respectively. The amount of expense recognized for the thirty-nine weeks ended October 29, 2022 and October 30, 2021 was $0.8 million and $0.7 million, respectively. As of October 29, 2022, there were 2,084,348 shares available for issuance under the ESPP.


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7. Treasury Shares and Share Repurchase Program
Treasury Shares Acquired on Restricted Stock Awards
The Company acquired 24,885 shares to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended October 29, 2022, which were recorded as $1.9 million of treasury stock. The Company acquired 28,398 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended October 30, 2021, which were recorded as $1.0 million of treasury stock.
The Company acquired 260,730 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the thirty-nine weeks ended October 29, 2022, which were recorded as $17.8 million of treasury stock. The Company acquired 375,223 shares to satisfy employees' tax withholding obligations upon the vesting of restricted stock awards in the thirty-nine weeks ended October 30, 2021, which were recorded as $16.7 million of treasury stock.
Share Repurchase Program
On November 16, 2021, the Company's board of directors approved a share repurchase program (the "2021 Repurchase Program") that allows the Company to repurchase up to $500.0 million of its outstanding common stock from time to time as market conditions warrant. The 2021 Repurchase Program expires in January 2025. The Company initiated the 2021 Repurchase Program to mitigate potentially dilutive effects of stock options and shares of restricted stock granted by the Company, in addition to enhancing shareholder value.
The Company repurchased 684,819 shares for $50.1 million during the thirteen weeks ended October 29, 2022, and 1,608,325 shares for $108.7 million during the thirty-nine weeks ended October 29, 2022. As of October 29, 2022, $362.5 million remained available to purchase under the 2021 Repurchase Program.
8. Income Taxes
The Company projects the estimated annual effective tax rate for fiscal year 2022 to be 27.5%, excluding the tax effect of discrete events, such as excess tax benefits from stock-based compensation, changes in tax legislation, settlements of tax audits and changes in uncertain tax positions, among others.
The Company’s effective income tax rate from continuing operations was 26.8% and 20.0% for the thirteen weeks ended October 29, 2022 and October 30, 2021, respectively, and 25.1% and 22.6% for the thirty-nine weeks ended October 29, 2022 and October 30, 2021, respectively. The increase in the effective tax rate for the thirteen and thirty-nine weeks ended October 29, 2022 compared to the thirteen and thirty-nine weeks ended October 30, 2021 is due primarily to lower excess tax benefits from stock-based compensation in the current year period.
The Company is subject to taxation in the U.S. federal and various state taxing jurisdictions. The Company’s tax years from 2017 forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities.
On August 16, 2022, the Inflation Reduction Act was signed into law in the United States. We are currently evaluating the Inflation Reduction Act law to determine future impacts on our financial statements.
9. 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.
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Assets and Liabilities Measured at Fair Value on a Recurring Basis
The fair values of the Company’s derivative instruments were 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 were considered to be Level 2. All derivative instruments expired in the first quarter of fiscal year 2022.
Financial Assets and Liabilities

The fair value of the Company's long-term debt is estimated based on current market rates for our specific debt instrument. Judgment is required to develop these estimates. As such, the estimated fair value of long-term debt is classified within Level 2, as defined under U.S. GAAP.
The gross carrying amount and fair value of the Company’s debt at October 29, 2022 are as follows (in thousands):
Carrying AmountFair Value
First Lien Term Loan$601,920 $601,920 
ABL Revolving Facility295,000 295,000 
Total Debt$896,920 $896,920 
The gross carrying amount and fair value of the Company’s debt at January 29, 2022 are as follows (in thousands):
Carrying AmountFair Value
First Lien Term Loan$701,920 $