BJs Wholesale Club Holdings Inc

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 and subsequent filings with the SEC.

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 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 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 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.

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 third quarter of fiscal year 2024 ended on November 2, 2024, and the third quarter of fiscal year 2023 ended on October 28, 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 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.

Current wording

BJ’s Wholesale Club is a leading operator of membership warehouse clubs concentrated primarily in 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 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.

Current wording

Since pioneering the warehouse club model in New England in 1984, we have grown our footprint to 247 large-format, high volume warehouse clubs and 182 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 $439.0 million for the trailing twelve-months ended August 3, 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 7.5 million members paying annual fees to gain access to savings on groceries, general merchandise, services, and gasoline. 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 $447.9 million for the trailing twelve-months ended November 2, 2024.

Previous wording

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending in our clubs, while economic weakness, which generally results in a reduction of customer spending, may have a different or more extreme effect on spending at our clubs. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include employment rates, changes to the Supplemental Nutrition Assistance Program (SNAP), government stimulus programs, tax legislation, business conditions, changes in the housing market, the availability of credit, interest rates and inflation, tax rates and fuel and energy costs. In addition, unemployment rates and benefits may cause us to experience higher labor costs.

Current wording

The overall economic environment and related changes in consumer behavior have a significant impact on our business. In general, positive conditions in the broader economy promote customer spending in our clubs, while economic weakness, which generally results in a reduction of customer spending, may have a different or more extreme effect on spending at our clubs. Macroeconomic factors that can affect customer spending patterns, and thereby our results of operations, include employment rates, changes to the Supplemental Nutrition Assistance Program (SNAP), government stimulus programs, tax legislation, business conditions, changes in the housing market, the availability of credit, interest rates and inflation, tariffs, tax rates, and fuel and energy costs. In addition, unemployment rates and benefits may cause us to experience higher labor costs.

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 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.

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 thirty-nine 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 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 wording

(c) Adjusted net income for the thirteen and thirty-nine weeks ended October 28, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation.

Previous 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.

Current wording

(d) Adjusted EBITDA for the thirteen and thirty-nine weeks ended October 28, 2023 has been recast to exclude adjustments for pre-opening expenses and non-cash rent expense to conform to the current period definition, and to include adjustments for restructuring charges to conform to the current period presentation.

Previous wording

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 wording

Net sales for the third quarter of fiscal year 2024 were $5.0 billion, a 3.4% increase from net sales reported for the third quarter of fiscal year 2023 of $4.8 billion.

Previous wording

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 wording

Net sales for the first nine months of fiscal year 2024 were $14.9 billion, a 4.1% increase from net sales reported for the first nine months of fiscal year 2023 of $14.3 billion.

Previous wording

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 wording

The increase for both comparative periods was due primarily to traffic and unit growth, particularly in the perishables, grocery, and sundries division, an increase of nine clubs from the prior year period, as well as gasoline sales at our gas stations.

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 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.

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 3.8% in the third quarter of fiscal year 2024 compared to the third quarter of fiscal year 2023, primarily driven by increased sales of perishables with sales of general merchandise and services remaining relatively flat. Additionally, we estimate that an increase in sales, temporarily driven by a port strike and recent hurricanes, had a favorable impact of slightly less than one percentage point on its third quarter sales.

Previous wording

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 wording

In the perishables, grocery, and sundries division, growth was led by fresh produce, dairy, fresh beef and poultry, beverages, candy, snacks, nutrition, vitamins, packaged goods, household cleaning, and paper categories when compared to the third quarter of fiscal year 2023, slightly offset by decreased demand for alcohol.

Previous 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.

Current wording

The impact of gasoline sales is a result of a decrease in retail prices year over year, partially offset by an increase in comparable gallons sold in the third quarter of fiscal 2024 as compared to the third quarter of fiscal year 2023.

Previous wording

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 wording

Merchandise comparable club sales increased by 2.3% in the first nine months of fiscal year 2024 compared to the first nine months of fiscal year 2023 driven by increased sales of groceries, partially offset by decreased sales of general merchandise and services.

Previous 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.

Current wording

In the perishables, grocery, and sundries division, growth was led by fresh produce, dairy, nutrition, beverages, fresh beef, and paper categories when compared to the first nine months of fiscal year 2023, partially offset by a decrease in sales of candy, snacks, and alcohol.

Previous 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.

Current wording

General merchandise and services decreased in the first nine months of fiscal 2024 as compared to the first nine months of fiscal year 2023, primarily driven by the impact of our co-brand credit card economics as we cycled 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.

Previous wording

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.

Current wording

The impact of gasoline sales is a result of a decrease in retail prices year over year, partially offset by an increase in comparable gallons sold in the first nine months of fiscal 2024 as compared to the first nine months of fiscal year 2023.

Previous 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.

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 four new club openings in fiscal year 2024 as well as the five new clubs that opened in the fourth quarter of fiscal year 2023. As noted above, we announced an increase in membership fees effective January 1, 2025 which we anticipate will positively impact membership fee income in fiscal year 2025.

Previous wording

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 wording

Cost of sales was $4.1 billion, or 82.7% of net sales, in the third quarter of fiscal year 2024 compared to $4.0 billion, or 83.5% of net sales, in the third quarter of fiscal year 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, increased 20 basis points compared to the prior year period, primarily driven by the continued execution of our long-term initiatives and improved cost management.

Previous 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.

Current wording

Cost of sales was $12.4 billion, or 83.4% of net sales, in the first nine months of fiscal year 2024 compared to $11.9 billion, or 83.4% of net sales, in the first nine months of fiscal year 2023. Merchandise gross margin rate, which excludes gasoline sales and membership fee income, remained flat compared to the first nine months of fiscal year 2023.

Previous wording

SG&A includes both fixed and variable components and, therefore, is not directly correlated with net sales. We expect that our SG&A will increase in future periods due to investments in comparable club sales growth and our expanding footprint as we open new clubs. In addition, any future increases in wages or stock-based grants or modifications will increase our SG&A.

Current wording

SG&A includes both fixed and variable components and, therefore, is not directly correlated with net sales. We expect that our SG&A will increase in future periods due to investments to drive comparable club sales growth and our expanding footprint as we open new clubs. In addition, any future increases in wages or stock-based grants or modifications will increase our SG&A.

Previous wording

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 wording

SG&A increased by 5.2% to $733.6 million in the third quarter of fiscal year 2024 from $697.1 million in the third quarter of fiscal year 2023.

Previous wording

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 wording

SG&A increased by 6.0% to $2.2 billion in the first nine months of fiscal year 2024 from $2.1 billion in the first nine months of fiscal year 2023.

Previous 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.

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, and an increase in accrued incentive compensation. Additionally, an increase in the number of owned clubs has resulted in increased depreciation expense. The increases in SG&A were partially offset by the favorable net impact of legal settlements reached of approximately $20 million during the third quarter of fiscal year 2024. We remain focused on investing in member engagement, marketing and digital strategies.

Previous 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.

Current wording

The decrease for both comparative periods was primarily due to a reduction in outstanding borrowings, fluctuations in interest rates year-over-year, and a decrease in debt extinguishment charges as the third quarter of fiscal year 2023 included charges related to the Fourth Amendment of the First Lien Term Loan.

Previous wording

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 wording

The effective income tax rate from continuing operations was 28.2% and 28.1% for the third quarter of fiscal years 2024 and 2023, respectively. The increase in the effective income tax rate was primarily driven by lower tax benefits from stock-based compensation in the current year period.

Previous wording

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 wording

The effective income tax rate from continuing operations was 25.7% and 29.7% for the first nine months of fiscal years 2024 and 2023, respectively. The decrease in the effective income tax rate was primarily driven by higher tax benefits from stock-based compensation in the current year period.

Previous wording

The accompanying Condensed Consolidated Financial Statements, including the related notes, are presented in accordance with GAAP. In addition to relevant GAAP measures we also provide non-GAAP measures, including adjusted EBITDA, comparable club sales, adjusted free cash flow, adjusted net income and adjusted net income per diluted share ("adjusted EPS") because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance. These measures are customary for our industry and commonly used by competitors. These non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, adjusted EBITDA, comparable club sales, adjusted free cash flow, adjusted net income and adjusted EPS share may not be comparable to similarly titled measures used by other companies in our industry or across different industries. See Results of Operations above for our comparable club sales and merchandise comparable club sales results. Adjusted free cash flow is discussed within the Liquidity and Capital Resources section below.

Current wording

The accompanying Condensed Consolidated Financial Statements, including the related notes, are presented in accordance with GAAP. In addition to relevant GAAP measures we also provide non-GAAP measures, including adjusted net income, adjusted net income per diluted share ("adjusted EPS"), adjusted EBITDA, adjusted free cash flow, and other key performance indicators, including comparable club sales, because management believes these metrics are useful to investors and analysts by excluding items that we do not believe are indicative of our core operating performance. These measures are customary for our industry and commonly used by competitors. These non-GAAP financial measures should not be reviewed in isolation or considered as an alternative to any other performance measure derived in accordance with GAAP and should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. In addition, adjusted net income, adjusted EPS, adjusted EBITDA, adjusted free cash flow, and comparable club sales may not be comparable to similarly titled measures used by other companies in our industry or across different industries. See Results of Operations above for our comparable club sales and merchandise comparable club sales results. Adjusted free cash flow is discussed within the Liquidity and Capital Resources section below.

Previous wording

We believe adjusted net income and adjusted EPS are useful metrics to investors and analysts because they present more accurate year-over-year comparisons for our net income and net income per diluted share because adjusted items are not the result of our normal operations.

Current wording

We believe adjusted net income and adjusted EPS are useful metrics to investors and analysts because they present more accurate year-over-year comparisons for our net income and net income per diluted share because adjusted items are not the result of our normal operations. We also use adjusted EPS in connection with establishing long-term incentive compensation.

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

(b)Represents charges related to the restructuring of certain corporate functions, including costs for severance, retention, outplacement, consulting fees, and other third-party fees.

Previous wording

(b)Other non-cash items related to the reclassification into earnings of accumulated other comprehensive income / loss associated with the de-designation of hedge accounting and other adjustments.

Current wording

(c)Other non-cash items related to the reclassification into earnings of accumulated other comprehensive income / loss associated with the de-designation of hedge accounting and other adjustments.

Previous wording

(c)Represents the tax effect of the above adjustments at a statutory tax rate of approximately 28%.

Current wording

(d)Represents the tax effect of the above adjustments at a statutory tax rate of approximately 28%.

Previous wording

(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 wording

(e)Adjusted net income for the thirteen and thirty-nine weeks ended October 28, 2023 has been recast to include adjustments for restructuring charges, and the corresponding tax impact, to conform to the current period presentation.

Previous wording

(e)Adjusted EPS is measured using weighted-average diluted shares outstanding.

Current wording

(f)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. 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.

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 thirty-nine weeks ended October 28, 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 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.

Current wording

(c) Adjusted EBITDA for the thirteen and thirty-nine weeks ended October 28, 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 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.

Current wording

Our primary sources of liquidity are cash flows generated from club operations and borrowings from our ABL Revolving Facility. As of November 2, 2024, cash and cash equivalents totaled $33.9 million and we had $942.2 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 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.

Current wording

In the first nine months of fiscal year 2024, we repurchased 1,536,591 shares under the 2021 Repurchase Program for a total purchase price of $129.3 million, inclusive of associated costs.