Bj's Wholesale Club Holdings, Inc. · NYSE:BJ
Bj's Wholesale Club — Q2 2024 Earnings Presentation
21 slides from Bj's Wholesale Club's earnings presentation, Aug 22, 2024
Slide 1: BJ's Wholesale Club Investor Presentation
BJ’s Wholesale Club Investor Presentation August 2024
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: Q2 FY24: Strong momentum in membership, traffic and unit volumes
Q2 FY24: Strong momentum in membership, traffic and unit volumes A stronger company today, built on our strategic priorities Q2 FY24 results Unbeatable Deliver Improve Grow our member value $5.1B member loyalty footprint experience conveniently Net sales +4.8% vs. Q2 FY23 7M+ Focus on value continue
Slide 4: Key investment highlights
Key investment highlights Advantaged Loyal membership Differentiated Accelerated Prudent capital business model in base that is shopping expansion of allocation strategy a favorable market growing in size and experience focused highly profitable maximizes backdrop quality on fresh, value club base s
Slide 5: The warehouse club model offers significant structural advantages
The warehouse club model offers significant structural advantages Operate efficiently • Limited SKUs support pallet presentation, driving scale and inventory turns • Requires less labor in club • Efficient distribution • Lower per square foot build-out costs Constantly reinvest into value • ~25% bet
Slide 6: The warehouse club channel is growing and taking share
The warehouse club channel is growing and taking share Accelerated share gains in recent years U.S. warehouse club market size 1 with opportunity for future growth1 ($ in B) U.S. sales growth by channel 2023 share of $278 (2018 – 2023 CAGR) U.S. retail sales $269 $236 9.5% 4.8% $204 $183 $176 $165 $
Slide 7: MFI has grown every year for over 25 years
MFI has grown every year for over 25 years ($ in M) $439 $421 $397 $361 $333 $302 $283 $255 $259 $242 $243 $247 $229 $210 $191 $173 $175 $180 $159 $139 $150 $124 $106 $118 $79 $90 $56 $66 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY
Slide 8: 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 9: 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 10: 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 11: The convenience of our digital offerings drives spend
The convenience of our digital offerings drives spend Digital members1 spend approximately 90% more with us annually 2 Digitally-enabled comp sales grew 22% in Q2 FY24 12% 2% FY18 Q2 FY24 Digital penetration %3 1 Members making at least one digitally-enabled purchase (BOPIC/Curbside pickup, same-day
Slide 12: We have an advantaged real estate position built over 40 years
We have an advantaged real estate position built over 40 years We have an industry leading footprint on the east coast and are expanding Uxbridge, MA Dry DC Rocky Hill, CT Perishable DC 244 178 20 Clubs1 Gas stations1 States1 Burlington, NJ Dry DC Elkton, MD Perishable DC Leading positions in core E
Slide 13: 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 14: We have delivered significant growth since 2018
We have delivered significant growth since 2018 FY23 vs. FY18 +54% +49% 90% +91% Net sales MFI Tenured Adjusted renewal rate EBITDA1 +198% $2.3B+ 0.6x ~$625M Adjusted EPS 1 Cumulative Net debt to adjusted Cumulative share free cash flow 1 EBITDA1 repurchases 1 Refer to Appendix section 14
Slide 15: 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 15
Slide 16: 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 since 2018 initial Share repurchase remains the preferred investing in t
Slide 17: Appendix
Appendix
Slide 18: GAAP to non-GAAP reconciliations: Adjusted EBITDA
GAAP to non-GAAP reconciliations Adjusted EBITDA YTD Q2 YTD Q2 LTM Q2 (in M) FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY23 FY24 FY24 Income from continuing operations $ 52 $ 127 $ 188 $ 421 $ 427 $ 514 $ 524 $ 247 $ 256 $ 532 Interest expense, net 197 165 108 84 59 47 65 31 27 60 Provision (benefit) for i
Slide 19: 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 FY23 8/3/2024 Total debt $ 2,712 $ 1,801 $ 1,681 $ 1,106 $ 749 $ 853 $ 717 $ 616 Less: Cash and cash equivalents 35 27 30 44 45 34 36 38 Net debt $ 2,677 $ 1,774 $ 1,650 $ 1,063 $ 703 $ 819 $ 681 $
Slide 20: GAAP to non-GAAP reconciliations: Adjusted EPS
GAAP to non-GAAP reconciliations Adjusted EPS Q2 Q2 (in M, except per share data) FY18 FY19 FY20 FY21 FY22 FY23 FY23 FY24 Net income as reported $ 127 $ 187 $ 421 $ 427 $ 513 $ 524 $ 131 $ 145 Adjustments: Offering costs 4 2 - - - - - - Stock-based compensation related IPO 49 - - - - - - - Managemen
Slide 21: GAAP to non-GAAP reconciliations: Free cash flow
GAAP to non-GAAP reconciliations Free cash flow (in M) FY18 FY19 FY20 FY21 FY22 FY23 Q2 FY24 Net cash provided by operating activities $ 427 $ 355 $ 869 $ 832 $ 788 $ 719 $ 221 Less: Additions to property & equipment, net of disposals 146 197 218 324 398 467 134 Plus: Proceeds from sale leaseback tr
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