BJ's Wholesale Club Holdings, Inc. (BJ): history, ownership, mission, how it works & makes money

A Brief History of BJ's Wholesale Club Holdings, Inc.

Founded in 1984, BJ's Wholesale Club Holdings, Inc. has evolved into a leading warehouse club retailer in the United States. The company operates more than 230 clubs across 17 states, serving over 5 million members.

Recent Financial Performance (2024)

As of August 3, 2024, BJ's reported a net income of $256.0 million for the first six months of fiscal year 2024, compared to $247.4 million for the same period in 2023. This reflects an increase of 3.5% year-over-year.

Membership Growth

In fiscal 2024, BJ's has continued to see growth in membership, with membership fee income increasing by 9.1% year-over-year in Q2 2024. This growth is attributed to effective membership acquisition strategies and the opening of new clubs.

Operational Highlights

As of August 2024, BJ's has successfully opened six new clubs, contributing to increased traffic and unit growth. The company reported merchandise comparable club sales growth of 2.4% in Q2 2024 compared to the same quarter in 2023.

Cost Management

Cost of sales for the first half of 2024 stood at $8.3 billion, representing 83.7% of net sales, which is an increase from 83.4% in the first half of 2023. Despite rising costs, BJ's has focused on improving inventory management to maintain profitability.

Cash Flow and Liquidity

For the first six months of fiscal year 2024, BJ's generated $422.2 million in net cash from operating activities, compared to $269.5 million in the same period in 2023. The increase is primarily due to favorable fluctuations in working capital.

Debt and Financing

As of August 3, 2024, BJ's had $217.0 million outstanding under its ABL Revolving Facility, with an unused capacity of $926.6 million. The interest rate on the ABL Revolving Facility was 6.44%.

The First Lien Term Loan, with a balance of $400.0 million, had an interest rate of 7.33%. The company amended this loan on October 12, 2023, extending its maturity date from February 2027 to February 2029.

Overall, BJ's Wholesale Club continues to demonstrate solid financial performance, driven by strategic growth initiatives and effective cost management.

A Who Owns BJ's Wholesale Club Holdings, Inc. (BJ)

Major Shareholders

As of 2024, the ownership structure of BJ's Wholesale Club Holdings, Inc. is comprised of institutional investors, retail investors, and company executives. The largest shareholders include:

Executive Ownership

Executive officers and board members of BJ's Wholesale Club Holdings also hold a significant portion of shares. The following are key executives and their respective ownership percentages:

Recent Shareholder Changes

In the first half of 2024, BJ's Wholesale Club Holdings, Inc. repurchased approximately 857,092 shares at a total cost of $71.0 million under its share repurchase program, which has a total authorization of $500 million.

The company’s public float consists of approximately 132.4 million shares, with daily trading volumes averaging around 1.5 million shares.

Market Capitalization

As of August 3, 2024, BJ's Wholesale Club Holdings, Inc. has a market capitalization of approximately $4.2 billion, reflecting its prominent position in the wholesale retail sector.

Stock Performance

The stock price of BJ's Wholesale Club Holdings, Inc. has shown resilience, with a year-to-date increase of approximately 15% as of mid-2024. The stock is traded under the ticker symbol "BJ" on the New York Stock Exchange (NYSE).

Conclusion on Ownership Structure

The ownership structure of BJ's Wholesale Club Holdings, Inc. is characterized by a diverse range of institutional investors, retail investors, and significant insider ownership, reflecting a stable and supportive shareholder base that contributes to the company's strategic growth initiatives.

BJ's Wholesale Club Holdings, Inc. (BJ) Mission Statement

Mission Statement Overview

BJ's Wholesale Club Holdings, Inc. is committed to providing its members with significant value through savings on a wide range of groceries and general merchandise. The company aims to create a shopping experience that enhances the value of membership while maintaining a focus on quality and customer service.

Membership and Value Proposition

As of August 3, 2024, BJ's Wholesale Club has over 7 million members. The annual membership fee for the Club Card is generally $55, while the Club+ membership, which offers additional features, is priced at $110. BJ's asserts that members can save over ten times their $55 fee when spending $2,500 or more annually on groceries.

Financial Performance Metrics

The financial performance metrics relevant to BJ's mission statement include:

Comparable Club Sales Performance

Comparable club sales are vital indicators of BJ's operational effectiveness. For the second quarter of fiscal year 2024, comparable club sales increased by 3.1%, with merchandise comparable club sales rising by 2.4%. The following table summarizes the comparable sales performance:

Cost Structure and Expenses

The cost structure is essential for maintaining profitability while delivering value to members. In the second quarter of fiscal year 2024, the cost of sales was $4.25 billion, representing 83.4% of net sales. The following table provides a breakdown of significant expenses:

Strategic Focus Areas

BJ's Wholesale Club focuses on several strategic areas to enhance its mission:

• Expansion of club locations to increase market presence.
• Investment in technology to improve customer service and operational efficiency.
• Enhancing the product mix, including exclusive brands like Wellsley Farms® and Berkley Jensen®, which achieved approximately $4.1 billion in annual sales for fiscal year 2023.
• Strengthening membership acquisition and retention strategies to drive membership fee income growth.

Conclusion on Mission Alignment

The mission statement of BJ's Wholesale Club Holdings, Inc. reflects its commitment to providing value through membership, competitive pricing, and a diverse product offering. The financial metrics and strategic initiatives align closely with this mission, demonstrating a clear focus on growth and member satisfaction.

How BJ's Wholesale Club Holdings, Inc. (BJ) Works

Company Overview

BJ's Wholesale Club Holdings, Inc. operates a membership-based warehouse club model. As of August 3, 2024, the company had 244 clubs in operation, compared to 238 clubs a year earlier. The company primarily generates revenue through membership fees and the sale of merchandise, including groceries, general merchandise, and gasoline.

Financial Performance

For the second quarter of fiscal year 2024, BJ's Wholesale Club reported net sales of $5.1 billion, a 4.8% increase from the $4.9 billion recorded in the same quarter of the previous year. For the first six months of fiscal year 2024, net sales totaled $9.9 billion, marking a 4.4% increase compared to $9.5 billion in the corresponding period in 2023.

Membership Structure

The company's membership model is a significant revenue source, with membership fee income increasing by 9.1% in Q2 FY 2024 compared to Q2 FY 2023. This growth is attributed to strong membership acquisition and retention efforts, supported by the opening of new clubs.

Operational Metrics

Comparable club sales, which measure sales performance in clubs open for at least 13 months, increased by 3.1% in Q2 FY 2024. Merchandise comparable club sales grew by 2.4%, driven by increased demand in grocery and general merchandise categories.

Cost Structure

Cost of sales represents a significant portion of total expenses, accounting for 83.4% of net sales in Q2 FY 2024. The company is focused on improving its merchandise gross margin through better inventory management and operational efficiencies.

Cash Flow Analysis

Net cash provided by operating activities for the first six months of FY 2024 was $422.2 million, compared to $269.5 million for the same period in FY 2023. This significant increase was largely due to favorable changes in working capital.

Debt and Liquidity Position

As of August 3, 2024, BJ's had $217.0 million outstanding under its ABL Revolving Facility, with an unused capacity of $926.6 million. The interest rate on this facility was 6.44%. The First Lien Term Loan had an outstanding balance of $400.0 million with an interest rate of 7.33%.

Stockholder's Equity and Share Repurchase Program

As of August 3, 2024, BJ's had a total stockholders' equity of $1.654 billion. The company has been active in repurchasing shares, buying back 857,092 shares for a total of $71.0 million in the first half of FY 2024 under its $500 million share repurchase program initiated in November 2021.

How BJ's Wholesale Club Holdings, Inc. (BJ) Makes Money

Revenue Streams

BJ's Wholesale Club generates revenue through multiple channels, primarily from net sales and membership fee income.

Net Sales Analysis

For the first six months of fiscal year 2024, BJ's reported net sales of $9.9 billion, a 4.4% increase from the previous year’s $9.5 billion. This growth is attributed to increased traffic and unit sales, particularly in the grocery and perishable divisions, along with the addition of six new clubs.

Membership Revenue

The company has over 7 million members, with annual membership fees set at approximately $55 for the Club Card and $110 for the Club+ membership. Membership fee income for the first six months of fiscal year 2024 reached $224.5 million, an 8.9% increase from $206.2 million in the same period of 2023.

Cost of Sales

The cost of sales for BJ's Wholesale Club was $4.2 billion in Q2 2024, representing 83.4% of net sales, compared to $4.1 billion or 83.7% in Q2 2023. For the first six months, the cost of sales totaled $8.3 billion, which is 83.7% of net sales, compared to $7.9 billion or 83.4% in the same period last year.

Selling, General, and Administrative Expenses (SG&A)

SG&A expenses increased to $750.3 million in Q2 2024, up from $695.0 million in Q2 2023, marking an 8.0% increase. For the first six months, SG&A was $1.5 billion, a 6.3% rise from $1.4 billion in the prior year.

Operating Income

Operating income for the second quarter of fiscal 2024 was $203.7 million, compared to $200.3 million in Q2 2023. For the first six months, operating income amounted to $364.4 million, down from $387.0 million in the prior year.

Net Income

BJ's reported a net income of $144.9 million for Q2 2024, compared to $131.3 million in Q2 2023. For the first half of fiscal 2024, net income was $256.0 million, an increase from $247.4 million year-over-year.

Comparable Club Sales

Comparable club sales for the second quarter increased by 3.1%, while merchandise comparable club sales rose by 2.4%.

Cash Flow and Financial Position

Net cash provided by operating activities was $422.2 million for the first six months of fiscal 2024, compared to $269.5 million for the same period in 2023. Cash and cash equivalents stood at $38.1 million as of August 3, 2024.

Debt and Liquidity

As of August 3, 2024, BJ's had $217 million outstanding under its ABL Revolving Facility and $400 million under its First Lien Term Loan, with an interest rate of 7.33%.