BJ's Wholesale Club Holdings, Inc.

5. Commitments and Contingencies

The Company is involved in various legal proceedings that are typical of a retail business. In accordance with applicable accounting guidance, an accrual will be established for legal proceedings if and when those matters present loss contingencies that are both probable and estimable. The Company does not believe the resolution of any current proceedings will result in a material impact to the condensed consolidated financial statements. Gain contingencies are recognized when they are realized or realizable.

6. Stock Incentive Plans

On June 13, 2018, the Company’s board of directors adopted, and its stockholders approved, the BJ’s Wholesale Club Holdings, Inc. 2018 Incentive Award Plan (the “2018 Plan”). The 2018 Plan provides for, among other types of awards, the grant of restricted stock, restricted stock units, and performance shares.

The 2018 Plan authorizes the issuance of 13,148,058 shares and allows for most shares that are forfeited, expire, or are settled in cash to be reissued for new grants that may be awarded. For further details on the 2018 Plan, refer to “Note 11. Stock Incentive Plans” included in our Annual Report on Form 10-K for fiscal year 2025, as filed with the Securities and Exchange Commission on March 12, 2026.

As of August 1, 2026, there were 4,004,018 shares available for future issuance under the 2018 Plan.

The following table summarizes the Company’s stock award activity during the twenty-six weeks ended August 1, 2026 (shares in thousands):

(a) Shares outstanding reflect a 100% payout. However, the actual payout for the remaining performance stock unit awards granted in fiscal year 2021 is expected to be 200%, and the actual payout for performance stock unit awards granted in fiscal year 2023, which vested in the first quarter of fiscal year 2026, was 92%. Actual payout for the performance stock unit awards granted in each of fiscal years 2024, 2025, and 2026, which vest in fiscal years 2027, 2028, and 2029, respectively, could be below 100% or up to 300%.

(b) Includes 38 incremental performance stock units granted in fiscal year 2021 with a weighted-average grant date fair value of $44.04, that vested in fiscal year 2026 at greater than 100% of target payout based on performance.

(c) Includes 12 performance stock units granted in fiscal year 2023 with a weighted-average grant date fair value of $76.07, that vested in fiscal year 2026 at less than 100% of target payout based on performance.

Stock-based compensation expense was $15.5 million and $13.9 million for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively, and $28.7 million and $24.6 million for the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively.

On June 14, 2018, the Company’s board of directors adopted, and its stockholders approved, the ESPP, which became effective July 1, 2018. The aggregate number of shares of common stock reserved for issuance under the ESPP is equal to the sum of (i)973,014 shares and (ii) an annual increase on the first day of each calendar year beginning in 2019 and ending in 2028 equal to the lesser of (A)486,507 shares, (B)0.5% of the shares outstanding (on an as converted basis) on the last day of the immediately preceding fiscal year and (C) such smaller number of shares as determined by the Company’s board of directors. The amount of expense recognized related to the ESPP was $0.5 million and $0.4 million for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively, and $1.1 million and $1.0 million for the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively. As of August 1, 2026, there were 3,578,686 shares available for issuance under the ESPP.

7. Treasury Shares and Share Repurchase Program

Treasury Shares Acquired on Stock-Based Awards

The Company acquired 1,278 shares for $0.1 million and 3,670 shares for $0.4 million in the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively, to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards, which was recorded as treasury stock.

The Company acquired 222,350 shares for $21.1 million and 313,772 shares for $35.5 million in the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively, to satisfy employees’ tax withholding obligations upon the vesting of restricted stock and performance stock awards, which was recorded as treasury stock.

Share Repurchase Program

On November 18, 2024, the Company’s board of directors approved a share repurchase program (the “2024 Repurchase Program”) that allows the Company to repurchase up to $1.00 billion of its outstanding common stock from time to time as market conditions warrant. The 2024 Repurchase Program was effective on February 1, 2025 and expires in January 2029. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate requirements, market conditions, and other corporate liquidity requirements and priorities. The Company initiated the 2024 Repurchase Program to mitigate potentially dilutive effects of stock awards granted by the Company, in addition to enhancing shareholder value.

The Company repurchased 1,384,278 shares for $124.1 million and 375,000 shares for $41.2 million under the 2024 Repurchase Program during the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. The Company repurchased 3,498,278 shares for $330.7 million and 430,000 shares for $47.4 million under the 2024 Repurchase Program during the twenty-six weeks ended August 1, 2026 and August 2, 2025, respectively. The Company accounts for treasury stock under the cost method based on the fair market value of the shares on the dates of repurchase plus any direct costs incurred.

As of August 1, 2026, $422.1 million remained available to purchase under the 2024 Repurchase Program.

Retirement of Treasury Shares

During the second quarter and first six months of fiscal 2026, the Company retired 1,385,556 and 3,720,628 shares of treasury stock, respectively, which represented the cumulative number of shares held in the Company’s treasury due to acquisitions during the applicable period. The retirement of these shares resulted in decreases in each of treasury stock and APIC of $124.3 million for the second quarter and $351.8 million for the first six months of fiscal 2026. There wereno share retirements during the second quarter and first six months of fiscal year 2025.

8. Income Taxes

The Company projects the estimated annual effective tax rate for fiscal year 2026 to be 27.8%, excluding the tax effect of discrete events, such as excess tax benefits from stock-based compensation, changes in tax legislation, settlements of tax audits and changes in uncertain tax positions, among others.

The Company’s effective income tax rate was 27.3% and 26.9% for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. The increase in the effective tax rate for the thirteen-week period was primarily attributable to lower tax gains on transferable tax credits, partially offset by higher tax benefits from stock-based compensation in the current year period.

For the twenty-six weeks ended August 1, 2026 and August 2, 2025, the Company's effective tax rate was 27.2% and 24.6%, respectively. The increase compared to the prior year period was primarily attributable to lower tax benefits from stock-based compensation compared to the prior year period.

Cash taxes paid as presented in the supplemental cash flow information section of the condensed consolidated statements of cash flows includes $98.0 million paid for transferable credits during the twenty-six weeks ended August 1, 2026.

The Company is subject to taxation in the U.S. federal and various state taxing jurisdictions. The Company’s tax years from 2021 forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities.

On July 4, 2025, new legislation, commonly known as the One Big Beautiful Bill Act (the “Act”), was signed into law. Among other provisions, the Act reestablished and made permanent 100% initial-year bonus depreciation on qualifying property, as well as the immediate deduction for domestic research and development expenses. The Company has quantified the impact of the Act to our financial statements and has reflected the effects within the consolidated financial statements as of and for the thirteen and twenty-six weeks ended August 1, 2026.

9. Fair Value Measurements

Certain assets and liabilities are required to be carried at fair value in accordance with GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company uses a three-level hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than quoted market prices included in Level 1 such as quoted market prices for markets that are not active or other inputs that are observable or can be corroborated by observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Financial Assets and Liabilities

The fair value of the Company’s long-term debt is estimated based on current market rates for our specific debt instrument. Judgment is required to develop these estimates. As such, the estimated fair value of long-term debt is classified within Level 2, as defined under GAAP.

The gross carrying amount and fair value of the Company’s debt at August 1, 2026 are as follows (in thousands):

The gross carrying amount and fair value of the Company’s debt at January 31, 2026 are as follows (in thousands):

The gross carrying amount and fair value of the Company’s debt at August 2, 2025 are as follows (in thousands):

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

The Company believes that the carrying amounts of its other financial instruments, including cash, accounts receivable, and accounts payable, approximate their fair values due to the short-term maturities of these instruments.

10. Earnings Per Share

The table below reconciles basic weighted-average shares of common stock outstanding to diluted weighted-average shares of common stock outstanding for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025 (in thousands):

The table below summarizes awards that were excluded from the computation of diluted earnings for the thirteen and twenty-six weeks ended August 1, 2026 and August 2, 2025, as their inclusion would have been anti-dilutive (in thousands):

11. Segment Reporting

The Company’s operations are primarily retail club and other sales procured from clubs and distribution centers, representingone operating segment. All of the Company’s identifiable assets are located in the United States. The Company does not have significant sales outside the United States, nor does any customer represent more than 10% of total revenues for any period presented.

The chief operating decision maker (“CODM”) is the Company’s chairman and chief executive officer. The CODM uses net income, as reported in the condensed consolidated statements of operations and comprehensive income, in evaluating performance of the retail operations segment and determining how to allocate resources of the Company as a whole, including investing in clubs, stockholder return programs, and other strategies. The CODM does not review assets when evaluating the results of the segment, and therefore, such information is not presented.

The following table provides the operating financial results of our reportable segment (in thousands):

12. Leases

Distribution Center Sale-Leaseback

In July 2026, the Company exercised its fixed-price purchase option under an existing lease to purchase the underlying land and building for the Company’s new ambient distribution center in Ohio. The Company concurrently assigned its rights under the resulting purchase and sale agreement to an unrelated third party (the “Buyer”) for total cash consideration of $122.1 million. The transaction met the criteria for sale accounting and was executed at market terms. The Company recognized a gain of $10.6 million which represented the excess of sale proceeds, net of transaction costs, over the net carrying values of the derecognized assets and liabilities. The gain was recognized as a reduction of selling, general, and administrative expenses in the consolidated statements of operations for the thirteen and twenty-six weeks ended August 1, 2026.

The Company executed a lease with the Buyer, which has an initial term of 25 years andfour five-year renewal options that were excluded from the lease term as they are not reasonably certain to be exercised. At commencement, the Company recorded an operating lease right-of-use asset and corresponding operating lease liability of $93.6 million.

Assets Held for Sale

In July 2026, the Company executed a letter of intent for the sale and leaseback oftwo of the Company’s owned retail properties. The Company expects the transaction to close in the second half of fiscal year 2026 for cash consideration and determined the underlying assets meet the held-for-sale criteria. The Company reclassified the net carrying value of property and equipment totaling $44.9 million to prepaid expenses and other current assets in the condensed consolidated balance sheet as of August 1, 2026. Assets held for sale are recorded at the lower of their carrying value or fair value less costs to sell, are reassessed at each reporting date, and are no longer depreciated. No impairment loss was recognized upon reclassification. The Company expects the leases to be classified as operating leases at commencement.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q should be considered forward-looking statements, including, without limitation, statements regarding our future results of operations and financial position, business strategy, transformation, strategic priorities and future progress, including expectations regarding deferred revenue, lease commencement dates, impact of infrastructure investments on our operating model and selling, general and administrative expenses, sales of gasoline and gross profit margin rates, share repurchases, and new club and gas station openings, as well as statements that include terms such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “can,” “could,” “intend,” “confident,” “project,” “believe,” “estimate,” “predict,” “continue,” “forecast,” “would,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to:

• uncertainties in the financial markets including, without limitation, as a result of disruptions and instability in the banking and financial services industries, wars and global political conflicts, and the effect of certain economic conditions or events on consumer and small business spending patterns and debt levels;

• risks related to our dependence on having a large and loyal membership;

• domestic and international economic conditions, including volatility in inflation or interest rates, supply chain disruptions, construction delays, tariffs, and exchange rates;

• our ability to procure the merchandise we sell at the best possible prices;

• the effects of competition in, and regulation of, the retail industry;

• our dependence on vendors to supply us with quality merchandise at the right time and at the right price;

• risks related to our indebtedness;

• changes in laws related to, or the government’s administration of, the Supplemental Nutrition Assistance Program (“SNAP”) or its electronic benefit transfer systems;

• the risks and uncertainties related to the impact of any pandemic, epidemic or outbreak of any other highly infectious disease on the U.S., regional and global economies and on our business, financial condition and results of operations;

• risks related to climate change and natural disasters, including hurricanes;

• our ability to identify and respond effectively to consumer trends, including our ability to successfully maintain a relevant digital experience for our members;

• risks related to cybersecurity, which may be heightened due to our e-commerce business, including our ability to protect the privacy of member or business information and the security of payment card information;

• risks relating to our ability to attract and retain a qualified management team and other team members;

• risks relating to our ability to implement our growth strategy by opening new clubs, and gasoline stations; and

• the other risk factors identified in our filings with the Securities and Exchange Commission (the “SEC”), including in particular those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 (the “Annual Report on Form 10-K for fiscal year 2025”) and our other filings with the SEC.

Given these uncertainties, you should not place undue reliance on any forward-looking statements. Except as required by applicable law, we assume no obligation to update these forward-looking statements, even if new information becomes available in the future, and you should not rely upon these forward-looking statements after the date of this Quarterly Report on Form 10-Q.