BJs Wholesale Club Holdings Inc
For the period ended Aug 3, 2024. Filed Aug 29, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 3, 2024 · Filed Aug 29, 2024
BJ$109.40-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-05-04; filed 2024-05-30.
0001531152-24-000071
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-03; filed 2024-08-29.
0001531152-24-000135
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 118 current paragraphs.
66 unchanged; 29 reworded; 21 added; 5 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
(c) Adjusted net income for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation.
Current report
Net sales for the second quarter of fiscal year 2024 were $5.1 billion, a 4.8% increase from net sales reported for the second quarter of fiscal year 2023 of $4.9 billion.
Current report
Net sales for the first six months of fiscal year 2024 were $9.9 billion, a 4.4% increase from net sales reported for the first six months of fiscal year 2023 of $9.5 billion.
Current report
The increase for both comparative periods was due primarily to traffic and unit growth, particularly in the grocery and perishable division, an increase of six clubs from the prior year period, as well as gasoline sales at our gas stations.
Current report
General merchandise and services increased in the second quarter of fiscal year 2024 compared to the second quarter of fiscal year 2023, primarily driven by strength in seasonal appliances and increased demand for certain general merchandise categories, including apparel and consumer electronics. The overall increase was partially offset by lower consumer spending in certain seasonal categories.
Current report
Merchandise comparable club sales increased by 1.5% in the first six months of fiscal year 2024 compared to the first six months of fiscal year 2023 driven by increased sales of groceries, partially offset by decreased sales of general merchandise and services.
Current report
Membership fee income was $113.1 million in the second quarter of fiscal year 2024 compared to $103.7 million in the second quarter of fiscal year 2023, a 9.1% increase.
Current report
Membership fee income was $224.5 million in the first six months of fiscal year 2024 compared to $206.2 million in the first six months of fiscal year 2023, an 8.9% increase.
Current report
Cost of sales was $4.2 billion, or 83.4% of net sales, in the second quarter of fiscal year 2024 compared to $4.1 billion, or 83.7% of net sales, in the second quarter of fiscal year 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased 10 basis points compared to the prior year period, primarily driven by improved inventory cost management and continued execution of our long-term initiatives including that of our own brands.
Current report
SG&A increased by 8.0% to $750.3 million in the second quarter of fiscal year 2024 from $695.0 million in the second quarter of fiscal year 2023.
Current report
SG&A increased by 6.3% to $1.5 billion in the first six months of fiscal year 2024 from $1.4 billion in the first six months of fiscal year 2023.
Current report
Pre-opening expenses were $2.6 million in the second quarter of fiscal year 2024 compared to $1.6 million in the second quarter of fiscal year 2023.
Current report
Pre-opening expenses were $3.4 million in the first six months of fiscal year 2024 compared to $5.5 million in the first six months of fiscal year 2023.
Current report
Interest expense, net was $12.8 million in the second quarter of fiscal year 2024 compared to $16.3 million in the second quarter of fiscal year 2023.
Current report
Interest expense, net was $26.7 million in the first six months of fiscal year 2024 compared to $31.0 million in the first six months of fiscal year 2023.
Current report
The effective income tax rate from continuing operations was 24.1% and 28.6% for the second quarter of fiscal years 2024 and 2023, respectively.
Current report
The effective income tax rate from continuing operations was 24.2% and 30.5% for the first six months of fiscal years 2024 and 2023, respectively.
Current report
The decrease in the effective income tax rate for both comparative periods was primarily driven by higher tax benefits from stock-based compensation in the current period.
Current report
(d)Adjusted net income for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation.
Current report
We believe that 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 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. We also use adjusted EBITDA in connection with establishing annual incentive compensation.
Current report
Refer to "Note 2. Summary of Significant Accounting Policies" included in this Quarterly Report on Form 10-Q for additional information regarding recently issued accounting pronouncements.
Removed paragraphs (5)
Previous report
Net sales for the first quarter of fiscal year 2024 were $4.8 billion, a 4.0% increase from net sales reported for the first quarter of fiscal year 2023 of $4.6 billion. The increase was due primarily to growth in units sold, particularly in perishables and the grocery division, as well as gallons sold at our gas stations.
Previous report
We continue to see growth in the size of our membership base and continued quality.
Previous report
Income tax expense decreased to $35.8 million in the first quarter of fiscal 2024 compared to $56.1 million in the first quarter of fiscal 2023. The decrease in income tax expense is primarily driven by higher tax benefits from stock-based compensation.
Previous report
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 will require public companies to disclose, on an annual basis, a tabular reconciliation, using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the statutory tax, further broken out by nature and/or jurisdiction. ASU 2023-09 requires all entities to disclose, on an annual basis, the amount of income taxes paid (net of refunds received), disaggregated between federal, state/local and foreign, and amounts paid to an individual jurisdiction when 5% or more of the total income taxes paid. The new standard is effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption and retrospective application are permitted. The Company is currently evaluating the impact the adoption of this new pronouncement will have on its financial statement disclosures.
Previous report
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands the segment reporting disclosures and requires disclosure of segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, amounts and description of its composition for other segment items, and interim disclosure of a reportable segment’s profit or loss and assets. Additionally, the amendments require the disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing performance and deciding how to allocate resources. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis. Early adoption is permitted. The Company is currently evaluating the impact the adoption of this new pronouncement will have on its financial statement disclosures.
Reworded paragraphs (29)
Previous wording
The following discussion and analysis is intended to promote an understanding of the results of operations and financial condition of the Company and is provided as a supplement to, and should be read in conjunction with, our condensed 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 2023. The following discussion may contain forward-looking statements that reflect our plans, estimates and assumptions. 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 in Part I. "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year 2023.
Current wording
The following discussion and analysis is intended to promote an understanding of the results of operations and financial condition of the Company and is provided as a supplement to, and should be read in conjunction with, our condensed 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 2023. The following discussion may contain forward-looking statements that reflect our plans, estimates and assumptions. 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 in Part I. "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the fiscal year 2023 and subsequent filings with the SEC.
Previous wording
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 2024" relate to the 52 weeks ending February 1, 2025, and references herein to "fiscal year 2023" relate to the 53 weeks ended February 3, 2024. The first quarter of fiscal year 2024 ended on May 4, 2024, and the first quarter of fiscal year 2023 ended on April 29, 2023, and both include thirteen weeks.
Current wording
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 2024" relate to the 52 weeks ending February 1, 2025, and references herein to "fiscal year 2023" relate to the 53 weeks ended February 3, 2024. The second quarter of fiscal year 2024 ended on August 3, 2024, and the second quarter of fiscal year 2023 ended on July 29, 2023, and both include thirteen weeks.
Previous wording
BJ’s Wholesale Club is a leading operator of membership warehouse clubs concentrated primarily on the eastern half 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. The Company providesa curated assortment focused on groceries, fresh foods, general merchandise, gasoline, andother ancillary services to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities. Additionally, the Company provides access to coupon books and promotions to deliver further value to our members.
Current wording
BJ’s Wholesale Club is a leading operator of membership warehouse clubs concentrated primarily on the eastern half of the United States. We deliver significant value to our members, consistently offering up to 25% savings on a representative basket of manufacturer-branded groceries compared to traditional supermarket competitors. The Company providesa curated assortment focused on groceries, fresh foods, general merchandise, gasoline, andother ancillary services to deliver a differentiated shopping experience that is further enhanced by our omnichannel capabilities. Additionally, the Company provides access to coupons and promotions to deliver further value to our members.
Previous wording
Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 244 large-format, high volume warehouse clubs and 176 gas stations spanning 20 states as of the date of this filing. In our core New England market, which has high population density and generates a disproportionate part of U.S. gross domestic product, we operate more than 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, bjs.com, and our highly rated mobile app, which allows them to use our buy-online-pickup-in-club ("BOPIC") service, curbside delivery, same-day home delivery or traditional ship-to-home service, as well as through the DoorDash and Instacart marketplaces where members receive the same preferential pricing as in-club shoppers by linking their membership. We also offer Same-Day Select, which offers BJ’s members the ability to pay a one-time fee for either unlimited or twelve same-day grocery deliveries over a one-year period.
Current wording
Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 244 large-format, high volume warehouse clubs and 178 gas stations spanning 20 states as of the date of this filing. In our core New England market, which has high population density and generates a disproportionate part of U.S. gross domestic product, we operate more than 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, bjs.com, and our highly rated mobile app, which allows them to use our buy-online-pickup-in-club ("BOPIC") service, curbside delivery, same-day home delivery or traditional ship-to-home service, as well as through the DoorDash and Instacart marketplaces. We also offer Same-Day Select, which offers BJ’s members the ability to pay a one-time fee for either unlimited or twelve same-day grocery deliveries over a one-year period.
Previous wording
Our goal is to offer our members significant value and a meaningful return in savings on their annual membership fee. We have over 7 million members paying annual fees to gain access to savings on groceries and general merchandise and services. The annual membership fee for our Club Card membership is generally $55, and the annual membership fee for our Club+ membership, which offers additional value-enhancing features, is generally $110. We believe that members can save over ten times their $55 Club Card 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. Inaddition 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 approximately $4.1 billion in annual sales for fiscal year 2023. Our customers recognize the relevance of our value proposition across economic environments, as demonstrated by over 25 consecutive years of membership fee income growth. Our membership fee income was $429.5 million for the trailing twelve-months ended May 4, 2024.
Current wording
Our goal is to offer our members significant value and a meaningful return in savings on their annual membership fee. We have over 7 million members paying annual fees to gain access to savings on groceries and general merchandise and services. The annual membership fee for our Club Card membership is generally $55, and the annual membership fee for our Club+ membership, which offers additional value-enhancing features, is generally $110. We believe that members can save over ten times their $55 Club Card 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. Inaddition 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 approximately $4.1 billion in annual sales for fiscal year 2023. Our customers recognize the relevance of our value proposition across economic environments, as demonstrated by over 25 consecutive years of membership fee income growth. Our membership fee income was $439.0 million for the trailing twelve-months ended August 3, 2024.
Previous wording
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 over 25 consecutive years and the quality of our membership mix is strong as evidenced by our higher tier penetration growth in the first thirteen weeks of fiscal year 2024. Our tenured membership renewal rate, a key indicator of membership engagement, satisfaction and loyalty, was 90% at the end of fiscal year 2023.
Current wording
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 over 25 consecutive years and the quality of our membership mix is strong as evidenced by our higher tier penetration growth in the first twenty-six weeks of fiscal year 2024. Our tenured membership renewal rate, a key indicator of membership engagement, satisfaction and loyalty, was 90% at the end of fiscal year 2023.
Previous wording
(c) Adjusted EBITDA for the thirteen weeks ended April 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition.
Current wording
(d) Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition, and include adjustments for restructuring charges to conform to the current period presentation.
Previous wording
Merchandise comparable club sales represents comparable club sales from all merchandise other than our gasoline operations for the applicable period. Merchandise comparable club sales increased 0.6% in the first quarter of fiscal year 2024 compared to the first quarter of fiscal year 2023, primarily driven by an increase in sales of groceries of 1.4%, partially offset by a decrease in sales of general merchandise and services of approximately 4.8%.
Current wording
Merchandise comparable club sales represents comparable club sales from all merchandise other than our gasoline operations for the applicable period. Merchandise comparable club sales increased 2.4% in the second quarter of fiscal year 2024 compared to the second quarter of fiscal year 2023, primarily driven by increased sales of groceries, as well as increased sales of general merchandise and services.
Previous wording
The impact of gasoline sales is a result of an increase in comparable gallons sold in the first quarter of fiscal 2024 as compared to the first quarter of fiscal year 2023, partially offset by a decline in retail prices.
Current wording
The impact of gasoline sales is a result of an increase in comparable gallons sold in the second quarter of fiscal 2024 as compared to the second quarter of fiscal year 2023, partially offset by a decline in retail prices.
Previous wording
In the grocery division, growth was led by fresh produce, dairy, nutrition, fresh beef, vitamins, paper, and household cleaning categories when compared to the first quarter of fiscal year 2023, partially offset by a decrease in sales of beverages and snacks.
Current wording
In the grocery division, growth was led by fresh produce, dairy, nutrition, fresh beef, and paper categories when compared to the first six months of fiscal year 2023, partially offset by a decrease in sales of candy and snacks.
Previous wording
General merchandise and services decreased in the first quarter of fiscal year 2024 compared to the first quarter of fiscal year 2023, primarily driven by the impact of our co-brand credit card economics as we cycle past the anniversary of the rebranded program launch in the first quarter of fiscal year 2023, as well as lower consumer spending in seasonal categories. The overall decrease was partially offset by increased demand for certain general merchandise categories, including home merchandise, consumer electronics, and apparel.
Current wording
General merchandise and services decreased in the first six months of fiscal 2024 as compared to the first six months of fiscal year 2023, primarily driven by the impact of our co-brand credit card economics as we cycle past the anniversary of the rebranded program launch in the first quarter of fiscal year 2023, as well as lower consumer spending in certain seasonal categories. The overall decrease was partially offset by increased demand for certain general merchandise categories, including apparel and consumer electronics.
Previous wording
Membership fee income was $111.4 million in the first quarter of fiscal year 2024 compared to $102.5 million in the first quarter of fiscal year 2023, an 8.6% increase. The increase was primarily driven by strength in membership acquisition and retention across both new and existing clubs. In addition to our new club opening in the first quarter of fiscal year 2024, we also continued to add new members from the five new clubs that opened in the fourth quarter of fiscal year 2023.
Current wording
The increase for both comparative periods was primarily driven by strength in membership acquisition and retention across both new and existing clubs. We continued to add new members from our new club opening in the first quarter of fiscal year 2024 as well as the five new clubs that opened in the fourth quarter of fiscal year 2023.
Previous wording
Cost of sales was $4.0 billion, or 83.9% of net sales, in the first quarter of fiscal year 2024 compared to $3.8 billion, or 83.2% of net sales, in the first quarter of fiscal year 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 50 basis points compared to the prior year period, primarily driven by the impact of our co-brand credit card economics as we cycle past the anniversary of the rebranded program launch in the first quarter of fiscal year 2023.
Current wording
Cost of sales was $8.3 billion, or 83.7% of net sales, in the first six months of fiscal year 2024 compared to $7.9 billion, or 83.4% of net sales, in the first six months of fiscal year 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, decreased 20 basis points compared to the first six months of fiscal year 2023, primarily driven by lower ancillary income.
Previous wording
SG&A increased by 4.7% to $721.8 million in the first quarter of fiscal year 2024 from $689.3 million in the first quarter of fiscal year 2023. The increase in SG&A was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings, as well as other continued investments to drive strategic priorities, such as the restructuring of certain corporate functions. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense. We remain focused on investing in member engagement, marketing and digital strategies.
Current wording
The increase in SG&A for both comparative periods was primarily driven by increased labor and occupancy costs as a result of new club and gas station openings in addition to other investments to drive strategic priorities, such as the restructuring of certain corporate functions. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense. We remain focused on investing in member engagement, marketing and digital strategies.
Previous wording
Pre-opening expenses were $0.9 million in the first quarter of fiscal year 2024 compared to $3.9 million in the first quarter of fiscal year 2023. Pre-opening expenses decreased due to timing of spend and the number of club openings year-over-year.
Current wording
Pre-opening expenses fluctuated due to timing of spend and the number of club openings year-over-year for both comparative periods.
Previous wording
Interest expense, net was $14.0 million in the first quarter of fiscal year 2024 compared to $14.7 million in the first quarter of fiscal year 2023. The decrease was primarily due to a reduction in outstanding borrowings as well as fluctuations in interest rates year-over-year.
Current wording
The decrease for both comparative periods was primarily due to a reduction in outstanding borrowings as well as fluctuations in interest rates year-over-year.
Previous wording
(d)Adjusted EPS is measured using weighted-average diluted shares outstanding.
Current wording
(e)Adjusted EPS is measured using weighted-average diluted shares outstanding.
Previous wording
(a) Represents charges related to the restructuring of certain corporate functions, including costs for severance, retention, outplacement, consulting fees, and other third-party fees.
Current wording
(a) Represents charges related to the restructuring of certain corporate functions, including costs for severance, retention, outplacement, consulting fees, and other third-party fees. Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to include adjustments for restructuring charges to conform to the current period presentation.
Previous wording
(c) Adjusted EBITDA for the thirteen weeks ended April 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent to conform to the current period definition.
Current wording
(c) Adjusted EBITDA for the thirteen and twenty-six weeks ended July 29, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent to conform to the current period definition.
Previous wording
Our primary sources of liquidity are cash flows generated from club operations and borrowings from our ABL Revolving Facility. As of May 4, 2024, cash and cash equivalents totaled $35.1 million and we had $911.6 million of unused capacity under our ABL Revolving Facility. Our principal liquidity needs for the next twelve months and beyond are to fund normal recurring operational expenses and anticipated capital expenditures; fund possible acquisitions; fund share repurchases and meet debt service and principal repayment obligations. We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under our ABL Revolving Facility, will be sufficient to finance our operations for at least the next twelve months.
Current wording
Our primary sources of liquidity are cash flows generated from club operations and borrowings from our ABL Revolving Facility. As of August 3, 2024, cash and cash equivalents totaled $38.1 million and we had $926.6 million of unused capacity under our ABL Revolving Facility. Our principal liquidity needs for the next twelve months and beyond are to fund normal recurring operational expenses and anticipated capital expenditures; fund share repurchases and meet debt service and principal repayment obligations. We believe that our current resources, together with anticipated cash flows from operations and borrowing capacity under our ABL Revolving Facility, will be sufficient to finance our operations for at least the next twelve months.
Previous wording
In the first three months of fiscal year 2024, we repurchased 405,110 shares under the 2021 Repurchase Program for a total purchase price of $30.2 million.
Current wording
In the first six months of fiscal year 2024, we repurchased 857,092 shares under the 2021 Repurchase Program for a total purchase price of $71.0 million.
Previous wording
Net cash provided by operating activities was $200.8 million for the first three months of fiscal year 2024 compared to $119.1 million for the first three months of fiscal year 2023. The $81.7 million increase was primarily due to fluctuations in working capital including$75.0 million related to merchandise inventories as well as$24.3 million related to accrued expenses, primarily driven by the change in accrued incentive compensation as a result of differences in the expected achievement from period-to-period. The increase in net operating cash flows was partially offset by$18.4 million related to accounts receivable due to timing of vendor and customer cash receipts, as well as a$5.1 million decrease in net income.
Current wording
Net cash provided by operating activities was $422.2 million for the first six months of fiscal year 2024 compared to $269.5 million for the first six months of fiscal year 2023. The $152.7 million increase was primarily due to fluctuations in working capital, including $71.7 million related to accounts payable as a result of timing of inventory receipts and vendor payments; $70.6 million related to merchandise inventories, primarily driven by changes in inventory levels at our perishable distribution centers; and $37.9 million related to accrued expenses, primarily driven by the change in accrued incentive compensation as a result of differences in the expected achievement from period-to-period; partially offset by $59.8 million related to accounts receivable due to timing of vendor and customer cash receipts. Also contributing to the increase in net operating cash flows was an $8.6 million increase in net income, inclusive of a $19.5 million increase in depreciation and amortization and a net decrease in deferred tax provisions of $13.9 million.
Previous wording
Net cash used in investing activities was $105.7 million for the first three months of fiscal year 2024, compared to $92.1 million for the first three months of fiscal year 2023. This fluctuation is driven by an increase in capital spending of $13.7 million due to an increase in the number of owned clubs.
Current wording
Net cash used in investing activities was $239.6 million for the first six months of fiscal year 2024, compared to $208.3 million for the first six months of fiscal year 2023. This fluctuation is primarily driven by an increase in capital spending of $25.4 million due to an increase in the number clubs under construction.
Previous wording
Net cash used in financing activities for the first three months of fiscal year 2024 was $96.1 million, compared to $37.6 million for the first three months of fiscal year 2023. The increase in cash used is primarily due to a$44.0 million increase in net payments on our ABL Revolving Facility due to our increased borrowings as well as an increase of $14.9 million for the acquisition of treasury stock compared to the prior year period, partially offset by an increase in net cash received from stock option exercises of $4.2 million.
Current wording
Net cash used in financing activities for the first six months of fiscal year 2024 was $180.6 million, compared to $69.0 million for the first six months of fiscal year 2023. The increase in cash used is primarily due to a$108.0 million increase in net payments on our ABL Revolving Facility, as well as an increased outflow of $12.7 million for the acquisition of treasury stock compared to the prior year period, partially offset by an increase in net cash received from stock option exercises of $13.9 million.
Previous wording
Adjusted free cash flow increased to $95.1 million for the first quarter of fiscal year 2024 compared to $27.0 million for the first quarter of fiscal year 2023. The increase is primarily the result of increased cash flows from operating activities due to fluctuations in working capital, partially offset by an increase in capital spending compared to the prior year.
Current wording
Adjusted free cash flow increased to $87.5 million for the second quarter of fiscal year 2024 compared to $34.2 million for the second quarter of fiscal year 2023. Adjusted free cash flow increased to $182.6 million for the first six months of fiscal year 2024 compared to $61.2 million for the first six months of fiscal year 2023. The increases are primarily the result of higher cash flows from operating activities due to favorable fluctuations in working capital, partially offset by an increase capital spending for both comparative periods.
Previous wording
On October 12, 2023, the Company amended the First Lien Term Loan to extend the maturity date from February 3, 2027 to February 3, 2029 and reduce applicable margin in respect of the interest rate, effective immediately, from SOFR plus 275 basis points per annum to SOFR plus 200 basis points per annum. Prior to the amendment, the Company repaid $50.0 million of the principal amount outstanding under the First Lien Term Loan.
Current wording
On October 12, 2023, the Company amended the First Lien Term Loan to extend the maturity date from February 3, 2027 to February 3, 2029 and reduce applicable margin in respect of the interest rate, effective immediately, from SOFR plus 275 basis points per annum to SOFR plus 200 basis points per annum.
Previous wording
At May 4, 2024, there was $270.0 million outstanding in loans under the ABL Revolving Facility and $18.4 million in outstanding letters of credit. The interest rate on the revolving credit facility was 6.41% and unused capacity was $911.6 million.
Current wording
At August 3, 2024, there was $217.0 million outstanding in loans under the ABL Revolving Facility and $15.9 million in outstanding letters of credit. The interest rate on the revolving credit facility was 6.44% and unused capacity was $926.6 million.
Previous wording
At May 4, 2024, the interest rate for the First Lien Term Loan was 7.32% and there was $400.0 million outstanding.
Current wording
At August 3, 2024, the interest rate for the First Lien Term Loan was 7.33% and there was $400.0 million outstanding.
Previous wording
Our material cash commitments consist primarily of debt obligations, interest payments, leases, and purchase orders for merchandise inventory. These material cash commitments impact our short-term and long-term liquidity and capital needs. As of May 4, 2024, other than those items related to the ordinary course of operations of our business such as inventory purchases, new leases and lease amendments, there were no material changes to our material cash commitments from those described in our Annual Report on Form 10-K for the fiscal year 2023.
Current wording
Our material cash commitments consist primarily of debt obligations, interest payments, leases, and purchase orders for merchandise inventory, agreements for capital items, gasoline, products and services used in our business, information technology, and executive employment. These material cash commitments impact our short-term and long-term liquidity and capital needs. As of August 3, 2024, other than those items related to the ordinary course of operations of our business such as inventory purchases, new leases and lease amendments, there were no material changes to our material cash commitments from those described in our Annual Report on Form 10-K for the fiscal year 2023.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
In the grocery division, growth was led by fresh produce, nutrition, beverages, fresh beef, dairy, vitamins, and paper categories when compared to the second quarter of fiscal year 2023.
Current report — wording carried from elsewhere
The impact of gasoline sales is a result of an increase in comparable gallons sold in the first six months of fiscal 2024 as compared to the first six months of fiscal year 2023, partially offset by a decline in retail prices.