Bj's Wholesale Club Holdings, Inc. · NYSE:BJ
Bj's Wholesale Club — Q4 2022 Earnings Presentation
24 slides from Bj's Wholesale Club's earnings presentation, Mar 9, 2023
Slide 1: BJ's Wholesale Club Investor Presentation
May 2023 BJ’s Wholesale Club Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements: This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this presentation that do not relate to matters of historical fact should be considered forward looking statements
Slide 3: Q1 FY23 highlights: Record first quarter net income and adjusted EBITDA
Q1 FY23 highlights: Record first quarter net income and adjusted EBITDA A stronger company today, built on our strategic priorities Q1 FY23 results Unbeatable Deliver Improve Grow our $4.6B member value member loyalty experience conveniently footprint Net sales +5% vs. Q1 FY22 +5.7% 6.8M+ Focus on v
Slide 4: Key investment highlights
Key investment highlights Advantaged Loyal membership Differentiated Accelerated Prudent capital business model in base that is shopping expansion of allocation strategy a favorable market growing in size and experience focused highly profitable maximizes backdrop quality on fresh, value club base s
Slide 5: The warehouse club model offers significant structural advantages
The warehouse club model offers significant structural advantages Operate efficiently • Limited SKUs support pallet presentation, driving scale and inventory turns • Requires less labor in club • Efficient distribution • Lower per square foot build-out costs Constantly reinvest into value • ~25% bet
Slide 6: The warehouse club channel is growing and taking share
The warehouse club channel is growing and taking share Accelerated share gains in recent years U.S. warehouse club market size 1 with opportunity for future growth1 ($ in B) U.S. sales growth by channel 2022 share of (2018 – 2022 CAGR) $269 U.S. retail sales $236 4.9% $204 11.1% $183 $176 $165 $155
Slide 7: MFI has grown every year for 25 years
MFI has grown every year for 25 years ($ in M) $403 $397 $361 $333 $302 $283 $255 $259 $242 $243 $247 $229 $210 $191 $173 $175 $180 $150 $159 $139 $118 $124 $106 $90 $79 $56 $66 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY
Slide 8: Our 1.5M credit card members ~2x LTV
Our new co-brand credit card will drive increased value to members, who will reward us with more lifetime value Why we’re excited Best-in-class card program to drive top-of-wallet status Better value prop enhances all BJ’s Perks Plus™ Mastercard® BJ’s One™ Mastercard® higher-tier membership Our 1.5M
Slide 9: BJ's go-to-market strategy is differentiated
BJ’s go-to-market strategy is differentiated vs. Club vs. Grocery vs. Mass channel Broader assortment ~25% lower prices1 Price below mass channel break-even Smaller pack sizes Treasure hunt Larger pack sizes Smaller club format Services & fuel Convenient locations Full-service deli 1 25% savings bas
Slide 10: We strive to deliver a great member experience grounded in value
We strive to deliver a great member experience grounded in value How members save at BJ’s Illustrative member savings1 Lower prices EDLP savings Fresh food and deli assortment can fulfill weekly Coupons grocery shopping needs Quality Own Brand products ~10x Own Brands Return on Digital app allows fo
Slide 11: Our goal is to deliver convenience to our members
Our goal is to deliver convenience to our members 1 2 3 Digitally-enabled sales In-club conveniences Targeted messaging and Price scan retail media program BOPIC1 / Curbside pickup Same-day delivery (“SDD”) In-club coupons Ship-to-home, Deli pre-ordering Express Pay, other2 1 Buy online, pick up in
Slide 12: The convenience of our digital offerings drives spend
The convenience of our digital offerings drives spend Digital members1 spend nearly 70% more with us annually 2 Digitally-enabled sales in FY22 grew 290% on a 3-yr stack 9% 2% FY18 FY22 Digital penetration %3 1 Members making at least one digitally-enabled purchase (BOPIC/Curbside pickup, same-day d
Slide 13: Our members love our app
Our members love our app Great app! So Industry-leading app rating convenient I never forget my coupons. I can Walmart 4.8 load them to my card right from Sam's 4.8 the app. I always use Jill L. BJs 4.7 the app, especially to Target 4.5 track gas prices. Aldi 4.4 Cynthia A. I am able to Wegmans 4.2
Slide 14: We have an advantaged real estate position built over nearly 40 years
We have an advantaged real estate position built over nearly 40 years… We have an industry leading footprint on the east coast Uxbridge, MA Dry DC Rocky Hill, CT Perishable DC Burlington, NJ 237 167 18 Dry DC Clubs1 Gas stations1 States1 Elkton, MD Perishable DC Independence, KY Leading positions in
Slide 15: ...and we are quickly growing our reach
...and we are quickly growing our reach …Today 5 years ago… Opened 9 new clubs in FY22 Opened 1 new club in FY17 Expect ~11 new clubs in FY23 Pipeline in early stages Recent openings prove our model works Goal was 1%–2% unit growth Expect to open ~10 new units per year for the foreseeable future 15
Slide 16: We have continually refined our new club opening playbook
We have continually refined our new club opening playbook Improved member acquisition • Robust integrated pre-open campaign • Digital acquisition marketing • Higher-tier/co-brand acquisition Elevated in-club experience • Team member training & GOLD standard certification • Improved omnichannel conve
Slide 17: We have delivered significant growth since 2018
We have delivered significant growth since 2018 FY22 vs. FY18 +49% +40% 90% +79% Net sales MFI Tenured Adjusted renewal rate EBITDA1 +195% $2B+ 0.8x $495M Adjusted EPS 1 Cumulative Net debt to adjusted Cumulative share free cash flow 1 EBITDA1 repurchases 1 Refer to Appendix section 17
Slide 18: Our long-term financial targets reflect continued momentum
Our long-term financial targets reflect continued momentum Comparable Total revenues EPS club sales 1 LSD% – MSD% MSD% HSD% – LDD% growth growth growth 1 Excluding the impact of gasoline sales 18
Slide 19: We are maximizing shareholder value through disciplined capital allocation
We are maximizing shareholder value through disciplined capital allocation Reinvest for long-term growth Maintain strong balance sheet Return cash to shareholders Highest capital return priority remains De-levered balance sheet over the past Share repurchase remains the preferred investing in the bu
Slide 20: Appendix
Appendix
Slide 21: GAAP to non-GAAP reconciliations: Adjusted EBITDA
GAAP to non-GAAP reconciliations Adjusted EBITDA (in M) FY17 FY18 FY19 FY20 FY21 FY22 Q1 FY22 Q1 FY23 LTM Q1 FY23 Income from continuing operations $ 52 $ 127 $ 188 $ 421 $ 427 $ 514 $ 112 $ 116 $ 518 Interest expense, net 197 165 108 84 59 47 8 15 54 Provision (benefit) for income taxes (28) 12 56
Slide 22: GAAP to non-GAAP reconciliations: Net debt to LTM adjusted EBITDA
GAAP to non-GAAP reconciliations Net debt to LTM adjusted EBITDA (in M) FY17 FY18 FY19 FY20 FY21 FY22 4/29/2023 Total debt $ 2,712 $ 1,801 $ 1,681 $ 1,106 $ 749 $ 853 $ 848 Less: Cash and cash equivalents 35 27 30 44 45 34 23 Net debt $ 2,677 $ 1,774 $ 1,650 $ 1,063 $ 703 $ 819 $ 825 LTM adjusted EB
Slide 23: GAAP to non-GAAP reconciliations: Adjusted EPS
GAAP to non-GAAP reconciliations Adjusted EPS (in M, except per share data) FY18 FY19 FY20 FY21 FY22 Q1 FY22 Q1 FY23 Net income as reported $ 127 $ 187 $ 421 $ 427 $ 513 $ 112 $ 116 Adjustments: Offering costs 4 2 - - - - - Stock-based compensation related IPO 49 - - - - - - Management fees 3 - - -
Slide 24: GAAP to non-GAAP reconciliations: Free cash flow
GAAP to non-GAAP reconciliations Free cash flow (in M) FY18 FY19 FY20 FY21 FY22 Q1 FY23 Net cash provided by operating activities $ 427 $ 355 $ 869 $ 832 $ 788 $ 119 Less: Additions to property & equipment, net of disposals 146 197 218 324 398 92 Plus: Proceeds from sale leaseback transactions - 22
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