BJ's Wholesale Club (BJ) 17 Nov 222022 Q3 Earnings call transcript

Good morning everyone and welcome to the BJ’s Wholesale Club Holdings Inc. third quarter 2022 earnings conference call. My name is Adam and I’ll be coordinating your call today. After the speakers’ remarks, there will be a question and answer session.

If you wish to ask a question at that time, please press star followed by one on your telephone keypad. the to pass Park host, now begin. to will call your over Cathy I when ready. you ahead go Please are

Good morning and Club’s third thank you for fiscal earnings joining XXXX conference call. quarter BJ’s Wholesale

our and are meaning today we forward-looking our for Bob and XX-K of statements those Chief call laws. may actual on Form uncertainties. Officer; Werner, Development. make of current Strategy a Bill of description statements securities see uncertainties Vice that and results to Officer; section and involve These SEC recent expectations risks during Please the on and Please On could remember Financial Eddy, Form President that the Laura differ expectations call. Chief federal Factors are and most based cause materially Felice, risks President, this XX-Q and the Executive Risk from filed within the our the Executive this described call, with

Bob. Relations non-GAAP refer press information that non-GAAP With presented that, note investors. on release please reconciliation in certain financial a is information in of useful will The a GAAP. Finally, GAAP. that with not the turn prepared we to accordance presentation measures for be as Please for our this substitute today’s will most Investor I’ll in call we to isolation accordance these refer website to considered financial posted with today’s provide to information over for on of the believe to financial intended comparable call, or measures the measures

our in results profitable reported us demonstrating morning, our was the quarter strong most another of you history. business Thank joining This for we morning. This model. Good the power of third quarter today.

a delivering value of when our position put Our strength. in us they need consistent especially it most has focus members on to

Our size is quality. member in growing and base both

deliver unbeatable are merchandising We value. our to improving

convenience experience. digital more through members to offering We’re our a great

it existing new markets and expanding successfully. are and our footprint into We doing

and the creation. strategy, and up to the well competitive comp term value were our a up position us quarter, and long team great for excluding In make continue third investments overall X.X% sustainable a gas. have We X.X% sales we and growth

Our When last the perspective expected anchor quarter our sales entered to most with compare. year, digits performance. QX year’s continued food from comps our a over we to double difficult we increasing given categories be strength challenging the comp

exceeded expectations membership our has and the business strong Our shopping continued given behaviors.

driver have As I’d put our of per income seen than positive each to year, QX to of XXXX. traffic in perspective sales been year have we like cohorts. comp been growth in member all and has a greater our last relative

to is $X.XX as were continues last adjusted EBITDA Our grew of XX% membership our and third growth on sequential membership to three-year grew quarter’s quarter and growth, X% merchandise term of $XXX story. a from our comp to EPS stack, a club results. which long structural The a XX% quality share. sales combination million nearly higher company per growth acceleration highlight Adjusted

our to Finally, third an for comp prices led of broader market’s loyalty. so despite This of to profits. many in members, is strong quarter contributed set the decline gas purchase value the emotional quarter in member our nicely consumption. we growth gas another XX% drive showcase and our gallon Gas to

stack highlights two-year gain XX% in share. tremendous Our in market gas gallons a

and business tailwind is The of and higher gallons, a served seen a years several in volatility. to and the few to structurally as increased been was it ago, this profitable business gallon year growth in years our quarter Gasoline the this normal addition In profit per resulting year. has than levels than particular has more more this our profitable. significant have last

and expanding better growth are members, and in bringing to our through value These with more business. sustainable are footprint. retaining merchandising, members growing which are our to digital, priorities our executing term our on We driving improving strategic key priorities, long convenience

of better evolved relevant to how our grounded and proud to about term $XXX to renewal touch our grew digital long reach, we’re we with each. over enter past fee new our as membership business of members, The marketing, well we’re X% retaining the we’ve is our third years. markets, in capabilities new of data quarter, openings. working our membership on gotten I’m to in our nearly grand briefly acquisition our campaigns income and to members We’ve leverage the ahead million. the me year-over-year made growing build remain several smarter utilizing Let optimize our success we progress existing membership. strength expand In we’ve the yielding strategically and membership rates, of

X.X over quarter. in at the stands as count increase. member new the members, clubs million year-over-year as acquisition up existing across Effective well digital and X% acquisition Our efforts has to growing contributed third

In member quality overall addition to membership. growth, improving are of we the our

was year-over-year. up four XX%, Our points in higher quarter third penetration roughly membership tier the

contributed has card tier base, and our Our formally quarter One. Capital co-branded meaningfully our program to credit this to higher announced we membership transition

made value club the space paid dividends has program to by in lifetime creating with our proposition since we launched As the value in over invest XXXX. the base times the decision we in look XX cardholder we back, growing best card

the new digital growth, Capital service part recognized and next as excited As value One’s leg our our to widely this proposition thrilled space, we we’re I’m partnership. about are the market offer experience look in of especially card leading enhanced to an program. and members to customer new of

shows members average. above with driven have Our values co-branded rates lifetime chain well our data renewal that profoundly card better the by

over of and next members power. food this As quality U.S., One final improving achieve will to double I quarters highest last all-time next of membership are levels, will at the of has is in grow partner the territory Ensuring diminishing end. Capital home year priorities another households over CPI constrained. Persistently the been levels. the the most so down the A believe are membership. we a for - and this since levels continue year but that further for with handful the still come at on high company In digit the first tenured running high aid business. we government transition increases, be energy and grown confident have touch have right renewal we one rates our consumer as year-over-year are Overall a than with point including year’s summer best in strength with of inflation are year year’s step our successful of purchasing gas our of and does the costs, last higher waning these penetration

have great value to on consumers’ delivering sustained our As remained focused to cost members. on pressures we continue weigh pockets,

continued members. have significant to we savings resulting in Specifically, in price, invest for our

more one our the our quarter our This our same compared the year. fact, savings $XXX members or shows at In the clubs analysis the spent Having the alone, us value right transaction turkey can XX that are to who free. our during November competitors Considering save first from year, time in internal days the to positions of members about a or holidays. against our our last this stronger is during for meant to earnings our rotisserie offered value. XX% important deli offering, remain chicken their to third when member’s they especially pricing on basically one-year possible competitors. our examples highlighted supermarket BJ’s from aim us outstanding our with as fee. our more We savings covers turkey to XX% ways compared offer free when a members with are a and membership and $XXX This the our offer fee. as to return highlight calls, shop last basket get combined the on two many That membership

market the drive initiatives gains competitive We in to optimize run. to deliver investing are value leveraging in members term more our our while the to long assortment near share advantages and further in

perishable a was compelling our for supply in first natural clubs, is example, our we major fresh process. at and why to Bringing shop assortment offer chain business, capabilities in-house price. step a the reason the this Our aim freshest members our

We to all marketing are chain everything through stages way lead the supply in-club working the in presentation. sourcing times, now packaging and early to to from of

own our to strategy despite difficult work are our with products. brands addition to look third grew we into compare. own savings maximize as members XX% to our quality brand a the In fresh, our quarter, their penetration In leaning in

through driving are area Our in and and digital, curbside. led third pillar we this by generating strategic robust growth BOPIC convenience is

this In enabled sales digitally up have typically fact, from sales trending members last of frequently, Digitally-engaged renewal. our us shop year, increases X% membership are year. baskets net with which towards and of the likelihood our more average overall X% higher

these of our our is convenient and we expansion offerings, more efforts. With in enhancing continue to than invest experience will member digital the ever

Greenburgh, New state couple into in Finally, the We’ve opened to year, opened and as have September. also including of we Last plans. in weeks we Columbus Ohio our our accelerated real we ago, a know, new New this clubs in seven presence month, expanding Albany, entry the dramatically Indiana in market. you our opened York, estate

We’re in X% to more the perform set clubs X% plans, The to the continue our future. and opened to open the a Jersey better slated almost this than our past several open few weekend, few us clubs months. foreseeable growth New have the Wayne, unit years over we’ve sustain we next giving confidence doors to initial in to in

times our powerful ability to commitment in these. and a Our to like remains advantage value bring members

to share and throughout margin navigating grown has environment. result, members our while a and considerable our have upside members. us in As Gas pressured to ability our team results, the granting further line we driven market our top the a year invest

to the value, good our is looking the our will long next is pace. inflation There inflation term being and brand, will for moderating strong loyalty, I into No albeit unbeatable grocery Our how continue that believe which and remain will business year, a we true playing drive season. matter consumer managing growth. decisions delivering holiday out, deepen we’re up inventory ends we doubt how and there through is macro it’s reinforce that and members our at no likely impacting about feel

serving wrap, and by heartened I have members in team our like operate. those members and incredible the provided their acknowledge especially which I’d Before we for I’m dedication thank Ian. impacted in support team the Hurricane to communities members to our by our

Our up our teams’ Ian’s safety emergency landfall members. team to and response preparedness, and leading the the members of days in work inventory asset security, ensured

and up deemed long were that safety as clubs Our no was compromised. so we running

snacks, local essentials baby with provide worked supplies and partners to water, as to teams shelters. Our formula, such cleaning our

they our team To do, showed thank today, members listening As this through for hard your are for our in members you who up communities and always team work. crisis. our members

it real Your details Laura of company turn and a our communities. efforts the I’ll the now to for over to our make difference in results rest and outlook provide on in more our year.

Thank you Bob.

our gratitude I’d Bob’s our and members Before team center reiterate for to distribution support like I begin, club across centers. clubs,

is strength result team members’ continued We are of our the a operating navigating challenging environment and hard work. our

Now billion, the in into the our sales results. let’s were third dig prior increase year. quarter over Net XX% $X.X a

of sales, Third quarter comp sales X.X% X.X%. by driven sales parts traffic comp was which were and by and growth. gasoline, increased about basket Merchandise equal excludes

XX% Comps We market in remains during was and slightly investing the in more Our three-year QX portion well and XX%, two-year levels. approximately division overall the of input key quarter our stack. up grew up value strong XX.X%. in above than stack growing pre-COVID on our we share items. up last a effect market was maintaining grew and two-year perishables XX% pricing of on passed positions quarter, share three-year on a up The inflation third grocery, sundries a our X% our costs by stack as a reflecting strategically of while stack quarter by

to from Our and value. respectively division toward to Comps improvement X% home a the higher up offering three-year provide in X% were years. services greater our in tires, new as was this where the The third general by discretionary by led merchandise two we’ve grew continues division and growth tweaks a comp to made optical, base XX% past and stack on spending and up two-year quarter. normalize

sales made and day are Our XXX% Over quarter XX% BOPIC our three-year on same the clubs Digitally-enabled of over grew shopping stack. delivery. experience the for fulfilled digital a services like digitally by offerings member with and our sales XX% third year-over-year have enabled more convenient.

business, offering our Our in up our with third making delivery curbside by gains. performed to gallons share BOPIC quarter, expectations continued resonate our approximately of XX% our grew gas line XX% with market business. in continues which members, comp our of In the

our internal X% quarter the other grew our expectations income, underscore in than on trended margins, to million plans. profits third to gas higher the resulted or improving outperformed Our $XX.X our and and gas we made fee business. continues hand, progress in Membership that have the MFI

penetration, tier rates. We and with trends, including are higher renewal membership renewal, easy our tenured and pleased first year

margin points business, margins quarters remained gross chain decreased gross due supply this onto gasoline XX and trend cost a Moving excluding a year. by higher prior consistent that merchandise inflation, has to primarily basis rate with the our

touch than last our $XXX significant me We third Let million teams briefly on inventory where ended more on balance made sheet the have quarter progress. year. inventory, our with

Excluding as $XXX were year-over-year acquisition made books the as million our new the and increased well club to our costs a in new $XXX new or attributable as and the of perishable SG&A distribution and $X to and club part our increase inflation year-over-year, station impact of million transition costs gas of center. support million. openings, associated The was inventory primarily of growth result occupancy on labor as up the our inventory quarter increased expenses for the by centers, club growth. of XX% with

to third Our and gas profits. sales our million, growth grew $XXX XX% adjusted reflecting by quarter outsized EBITDA

for and on Finally, or income per-share $XXX share increase million X% reflected per was basis. the adjusted a quarter year-over-year a third $X.XX net growth

lien to the of risk, one Turning structure, to than quarter leverage efforts mitigate has capital expense down $XXX to term if debt third interest million current paid altered may the of debt is less continue today. we rise. turn our and million We around $XXX our our our which net rate rates the first term ended partially debt, quarter, near during floating including our In of slightly entirely thinking reduce further with loan. environment our rate

in free with cash the $XX million We quarter third $XXX and million flow robust year-to-date. generating are

strong. As estate by will sheet, growing be we we real priority cash enabled in be our remains forward, balance by approach, capital to to flows but growth our Investments flexible funded our remains going continue support membership, allocate business. our and and will which these our plans our digital

shareholders nearly third share We continue bought repurchases, we to for to quarter the return cash through shares in excess million. and $XX XXX,XXX back approximately

the touch year. current our outlook for now on me Let

partnership into As we because continue share of strong have our Inflation members increase take in prepared are remains to many tier quarter. also noted it crystal is still value. proposition multiple we range, intense our can for our Capital will as comp including and us on channels. we P&L, the cheese, relief aspects today, business, business membership expect in we our various and sales top time, seen fourth new remarks will membership the grocery continues winter clubs our our which and drive strengthen of transition, officially that XXXX these co-brand market will October, although at times head we and and penetration. excluding recently X% announced us. believe X.X% we the gas to we believe as we which same value into to changes chicken, fiscal complete milk as to impact an competitive imply club maintaining our about the the nimble At remain online bring commodities another to of which impacting of KPIs, we in the the temporarily In with in grow some enhanced our and our One, ultimate our gaining to holidays, serve our Starting catalyst advantages X% X% higher clear now may to base. of acknowledge The focus such comparable benefits to traffic quarters to we

as transparent through possible be to aim will We period. this

gallon fourth was than that business per the growth quarter For strongest in gas we teens year. last quarter, low gallon. to the normal in profit Recall our assume our the range the higher in with profitability gas slightly continue fourth gas comp

unchanged P&L, pressure easing on we in outlook ongoing slightly see margin still by elevated margin merchandise but also that remains price down and driven in costs. Moving investments supply our the chain

negative we change point in but we XX As remain basis margin year-over-year third better expect such, the in quarter than quarter. merchandise the to rate decrease the delivered fourth in the

in now the the environment. $X.XX in to the we expense, monitor to we this continued expect rate EPS year continue full quarter to expect of will relates our into Taking in all $X.XX and be movements interest it pressure As to fourth range. consideration,

turning back strength the and in like Before to Bob, business our have to made. reiterate it of our the I’d we confidence transformation

improvements made for further by our closing advantages we profile. amplified of believe solid it a membership, and I’ll club we to the As in the digital, footprint result are deliver growth a in positioned Bob over we’ve expansion model, term warehouse inherent With that, to remarks. back long turn

Laura. Thanks

business everything in strategic our prioritizing strengthening and long we significant by do. progress are we in made on and executing well believe have term value our initiatives positioned I to today growth We drive

our allocate shareholder to maximize to towards continue will capital We investments value.

model advantage we is form stretch growing with a a comfort annuity lower uncertain, membership, with structural consumer warehouse members in our outlook the I on no to Our us. will loyalty it focus foundational being believe great in your to the circumstances. and remains When and hard of costs, club our dollars to to years value. find take over remain a the worked the operational the able their will that build to over success I the matter now members back that, with With Operator our questions. reliability key turn have that

Baker question DA first your comes Our go Mike, open. from line instructions] is from please ahead, Davidson. [Operator Mike today

focus is A but into so that quarter. view wanted your I Great ask retailers you’ve sales the the on quarter. third a another the with or to holidays. about you lot opinion holidays? just on that, us anything like in consumer consumers of as throughout you I would Thanks. consumer helps the given on maybe think out flesh promotional guys. going to what’s Thanks see you is on the one way head into pace give it to overall we activity guess heading way that maybe saw like really the of drop-off about that, us, guidance, anything Did it trade-down, or or another October. just big seeing are

for questions. morning. good Mike, Thanks Hey your

Overall, a year. our it’s one. think healthy in shape, good I as very the think I entire consumer we’ve seen is through

are As I about our member this been our trips trips is cohorts The through look refrain incredible we year market we we and share healthy membership seen The consumer point. the gain statistics value. show remarks, that well, the about prepared I’m we we’re our well as as about so as to the great, that income gaining excited is in all sales is very per at continue talked doing members thing year. talking really at, we’ve we’ve more throughout more think most

you If certainly October lot through us We had though, last for that XQ, of year is think October had year, XQ. the lower it last incredibly about A months running that pace think were at see the that, was into preceding so I compare November look two an really the than year. we if for don’t the a strong performance on you equal this stack, very October two-year and us, I so months. or

where with there, that out value pleased consumer we put the continues. is. to very and our that They’re reacting We’re really hopefully

more offer One turkey wondering went. new drive Did membership that actually it how quick just thanks. Great, follow-up, growth?

It certainly good had a reaction.

back of little buildings, certainly We’re that actually spent the certainly I our number but our how didn’t of works a so turkey looking bounce free the think traffic get it still in took that redemption the some so it have than see the into the are period to and got people offer, - come out, you go drove the day a you people expectations the $XXX, offer, where too. advantage is on ways higher to period. We’ve turkey redeeming you still the we’re offer, it’s back sort to in free of

consumers. Yes, and great for was thanks. great a for time. Thanks It idea the offer

thanks. bet, You

line ahead, from Fargo. next comes The please go Edward Kelly Wells from Edward, is question open. your

both and also new a I that, everyone, we give once good been, mentioned you just see, little how Hi, more on what are I it KPIs. that terms card quarter Could a you more are co-branded again. better maybe would morning about the does for the Could potential to credit impact here, time. little in member? a very optimistic what member bit us and economics imagine could think should think, color you the but Bob, you of just upfront Then mean to risk? nice how you you’ve Laura could maybe benefit over around color that mitigating that give which some there there

a it morning kick your Sure, tremendous look for I’ll and current can and program in. Ed. Bill good fill I at co-brand see and Maybe questions. Laura Thanks as our success. off it

the best get it It source wholesale about, value we grown forward. the think talked this prop we we go club We better will value. since member the great in tenfold it’s it’s of in As is it. and launched only as a over space at point, year

rates, As The in value to it as members, think use right vehicle come our has playing we us a team, that one becomes prop. business, members. we the to purchasing value renewal and we will to that’s and talk That about lifetime the play so to valuable this given more of game be to higher a we’ll better we’re improve it. value, continue shown it as are - question value back the we in will provide can tremendously habits our we to

the our well. architect a transition, looking Bill. as forward hand few we of could set the more transition to and things and he over so I running you can this the of the next of it one think new years, the to program it He’s Maybe do I’ll comments be valuable give in to partner.

you. back made little program, into to we’ve last about Ed, street economics and a lifetime what the members with the of launched all good to version the bit, years. the performed value, as about we’ve think just echo over Bob. several Thanks talked of we really been - co-brand goal the decision program invest that’s the with Bob this speak pleased we back we with driving current strategic with I’ll the when said the the how

and terms point strategy One, an way us to in it unbelievable them Capital and going economics back can of investment. we’ll to the for back to to roll we come value away view the some prop our we’re of transition the give through of deliver from about think that we enhanced take not so It’s back members. As in value members, to the

really launched here--not off a transition, you’ll we on pause a incredible is the next and as membership to penetration coming through program but through QX, slowdown work as that program team then across it the how and the as about as they think half then current growth excited in the we We’re in CapOne the higher with in start CapOne. first think the we acquisition of as program, that shut there board plays the in likely next acquisition do, everything The we at you’ll that there is program. pause a days bit--in substantial in we base, so of we see a growth KPIs, from of a leg higher as the bit a be membership here in there so new be from the the little with there we terms year, will the a reaccelerate report little will the term of tier get the slowdown see

Okay, great.

about have should that Just a me follow-up, XXXX, a may we but as looks maybe that the year? it’s Bob, puts and Could and little us you we the still takes the the about know high, thinking be help fuel is you especially think consensus out if to with I compare. - I margin quick backdrop uncertain, given some early just for and

our about excited. when positioning very the we’re Certainly and company, long year sure. we term think next Yes, of

membership is more a been growing, and the it count just is performance membership one and talk on just lot, to than talked we improving of has about much quality. our co-brand, better and what and that about, continues improve, lever the is we As our quality

from continued and the market ball for looking that perspective a renewal flow-through from either. here we’re value trips our those and rates, increased into take seeing off the eye won’t We’re gains share we

through we’re As we happens well next year from feel environment, macro positioned. a go like whatever I

business, the merchandise over incredible - absolutely year point a headwinds that markdowns really be also the I It’s impacted and year, gasoline ever chain we’ve in profitable had throughout from margins seen costs gasoline is had You seen. our to income so We’ve by this gas think the true. will this most been year. out lap all that most income we’ve we’ve tough the notably as general margins it year far an do tailwind supply perspective that and

more volatility this headwinds I some tough. towards I think avenue will well, some it do from so point. perspective. with can We’re year got more in what seen hopefully stopped continuing profit. we’ve of got do would year next incredible I work be margin this figure year, do an to trying to whether the to EPS the gas, I back long some fall this we’ve don’t market. income know that have at could happen I the may to ago flat which away to think project we flat provide but get as get gas that see would opportunities lap gasoline to We’ve in predict out to get

Thank you.

You bet.

Ohmes The ahead. America. next please go is Bank question comes from open, Robbie, from of your Robbie line

us two for that how Can should on this the what questions. about and Thanks deceleration decelerated would the morning. good One quarter? for Actually, Hey, taking remind we thinking growth my you driving membership sequentially. sequential fee be income was question. fourth be just

well, the there. to think it Certainly flows right digit so guess membership with increase year, over year, you at the thanks tell I Robbie, we come or it so we for a that, it think as mid-single do in a about has we’re quarter about question. your decel to and started to as worried concerned general clubs the would of into up little we’re we new lot be we’re A I about for play the thinking look were well. it. When XX doing and we quarter not and MFI, when you’re timing again just about - nothing did bit. from

kind I and all think want it. it’s performance of right year where we been a great

other Then question, the think Is you general merchandise, I up were that guys comps X%. the right? said

services and yes. merchandise division, General

about it’s more like last an discretionary that’s guys, What seeing the outperforming might of it business? know, be are areas? you number know the against--you you I seeing So Can those some it good you in are easy really retailers wasn’t small for little you apparel comparison a but discretionary. other relatively sounds in year. of a side what talk and

be and saw amount Yes, have a very Robbie. the you But on, performance have those what some little healthy the that not consumer quarter. and themes our lower seen, and talked some improvement businesses, in competitors seen more third definitely if some sales have services items, we’ve we home they’re dollar of - of members a think optical purchases. discretionary spending I in are seen we division think that about strong our largely bit saw and small which and about shows those the of tires what with our more apparel We about a others choosey

always to of in think never XX and had it’s of in front well. the I that entire weather much pretty that’s the is I as related but so some Boston November, part certainly it some about - was part hate talk it of that, month,

in some categories meaningful merchandise key general like some televisions. seeing You’re deflation

it normal our of be it purchasing a November our September seems that so. it Last buy December, have year, on to say is back A way noted won’t seems they’re and the this us. in because year, run the bit least a season hearing were like little it Finally, competitors couple in there consumers last I in like holiday thing late and would too, pattern and at October to it’s business. going

GM know, quarter. the we did okay in thought You

to lot good part fourth performance room quarter, home. forward We’re of bring got a in to looking but the the go quarter of in the here to last it we’ve

in Laura. X% it’s so I stack Robbie, remarks just quarter is the services, on I’d the still on prepared X% that it point the positive. the was up mentioned and that GM one two-year on that, Hey clean but was

Got that’s helpful. so it, Thanks super all much.

Thanks Robbie.

The from question next ahead. Baird. go from is Peter comes please Peter, your open, Benedict line

your you they little know Hey, a distribution that market taking growth. can mix more would term, and to what like see about the first current Maybe on have a stores growth question. invest for is unit That’s I good infrastructure, how Maybe versus Thanks support, club the you about question. of today to infrastructure curious new start guys little morning that? the I’m historically. in bit were guys to economics, talk you’re they X% point openings, look new more then guys. talk club where X% longer at many I’d how opportunity the the to compared - my to where existing

Pete, and Bill hey off can Yes, the good Thanks it morning. question. fill just I’ll it. kick for

talked about We the got on target. a seven prepared of great meet got in We’ve the had the a from already. few perspective. section the year we’ve year Jersey We tomorrow to this - in our call, and new of hopefully that have before open New the Wayne, year we bank club a end more

behind clubs feel at point. going the healthy and direction, us perspective. what quickly. we’ve very in the estate opened gas would have the continue all that a our the We’ve on We to this to capability right the last they invested to real is this pipeline Our ton gives from years like outperformed we’re of a in we confidence few do, so thought move keep foot

great that about on other buildings and is growth. some making you Bill and past. in and the didn’t time That economics in borne some late looking that points condition, great a unit those and to has know, team continuing you the of asked to sure I’ll forward of openings As new about. open that building we let do dedicated talk

Yes, hey Bill. Peter, it’s

as our the the in the the of versus in into of entry is you Ohio XX/XX; markets, growth terms look with you’ve year, be this this off balance the it as start. into Columbus, Pittsburgh, the at markets. continued expansion we next first In Detroit, The new at year with build-out look will in amazing midwest club is down about year, for our time seen existing right, push Noblesville, similar terms which and to in new Indiana an of existing of

performance extremely of existing the In terms it’s markets, been within strong.

York, in clubs, the on Long member as As those we our seen in membership really legacy that with, where incrementality Island, we begin where as in the where behavior clubs we Newburgh, those City they’re were into great about strong well existing in really legacy see networks we to we’ve at not New Long areas, base clubs. but they added haven’t the the the new strong look the trade really shopping are a density, that for clubs back think in We’ve shopping and also Commack, out seen new past, that openings in the and at positive members we markets levels future. clubs only that’s have building like performance Island on as existing the

it’s that Kentucky. investments, terms our opening year facilities something a facility last certainly of with looking We of an at. we’re perishable the In distribution expanded in

at as we the go the We’re build-out of looking forward. dry forward network

not talked side a of I’d to lot our is we’re If you went capabilities to network comp pipeline that for forward. clubs, gives three certainly lo as be forward, Burris incremental ability quickly, great we the mention XX at year. something about The bringing support year. feel in-house we’ve next facilities, public, here acquisition when capacity a to reluctant XXX our perishable great which we over us so continue pretty our years, we’ve done and of distribution and grow we The stack last dry problem in-sourcing a about remember is the have. good looking the network this as about them we to behold going used that the for

good ’XX and We’re calendar seeing. working and results on now we’re actively and the we about years ’XX, what feel

super helpful, thanks. That’s

the business. on general quick Just merchandise just follow-up, a

in investments update You is of guys of Maybe have the what that there the made area execution over couple quick you. Thank some just terms in trying on drive personnel. years. next to plan a in improved in

one, take maybe Yes, that I’ll Pete.

game, outstanding starts about we’ve general talent was most with our the talent merchandising our improving it business entire one priorities. upgrades talent, know, you it’s our made both general but allow already talking what the here our Merchant, merchandise our notably point, and and general merchandise anymore, of of and Chief new their capabilities our about with improving merchandise To of matter to key no that improve business. this is hiring improving so over business. outstanding have to new teams our me, in new you’re here, As done start team to tremendous a work of year at Evans, Whether Merchandise, process new it’s that Head really us General time just Dion Rachael not our Vegas -

you year, of As long time of next these won’t lead lot are in categories the know, second fruits probably efforts categories a quarter. the their and really so see you until

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Chuck, go open, next your Chuck Grom ahead. comes please Haskett. Gordon from line is from The question

the to some flowing profits customer? you’ve good Thank line and your that that about showcase morning. the you to between can versus investing bottom talk money generated in the to you gas of balance very date price much, year excess to Bob, value through taking

Chuck. great thanks That’s question. a Yes,

best As the day part you competitors is and the with every market, club to be else. gasoline than generally we know, everybody and that price our on better in our

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Thanksgiving. thanks lot. Happy a Great,

too. You

comes Mark open, from from your UBS. The next question is go line Carden ahead. Mark, please

the for lot about to your a my thinking changes you’re Thanks been for have there largest Thanks. fee warehouse how pacing increase? has start, inflationary morning. what Good any next to taking To competitors your done two environment questions. given membership just date, and the current

on being the thanks the and for thanks question. Mark, for call today, Hi

and hasn’t haven’t far waiting what we’re seeing we we about so the figure next those it; want the a with that haven’t we’re thought the at two the they until it member we per to two, that is will this at I things reasons: get unless tremendous it talked a would they important one of and I smoke given yet, minimum, The is think Once fee of already. we we amount clears, do. co-brand mess do not that is for dollars don’t about one, to know, we’ll right. thing largest year, talked most increase, transition, done happen. we increase up point our do out competitor do will You so a do thing fee two a and both

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makes That the upgrades are aggressively? economic shoppers in How just bit expect to a premium Would upgrade seems that? Maybe penetration you how you market of sense. would it of but to some you shock? have environment? do continue, thinking less any some you about there, are like Today, these sticker lot thinking follow-up of frequently momentum a current a that, if pressures you about more current given

value, co-brand one the we’re to I prop to the every that memberships think over core also to better. in that been value only - premium comes and right part outstanding reasons comes to we’ll that IT doing we day. look of tier back provide transition, fastest our with growing announce January, and years, get expect of the the that has we new value the

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Great, thanks luck. so much, and good

Mark. Thanks

line Parikh ago ahead. from Rupesh, Rupesh please open, question next is comes The Oppenheimer. from your

quarter. and Good a morning, question, also my thanks for nice congrats on taking

expect the how inflation sounds low point? the any into front, playing digit balance thoughts food year I levels, the or you guess, Any you as out year, on sense like it see single this of whether Just moderation. just for terms to, in it out type look guys you and at moderate of next

here. really talked on what don’t in today prepared I months a remarks. seeing inflation sure. tell general a pockets, thanks for bit We’ve everybody less knows, seen moderation we’re third quarter, answer. but seen as good three you would Laura in the of we sure It’s Rupesh. I perfect Yes, certainly not seeing year, little about a and were in the of a ton know have have ago, coming a inflation this It’s I’m as than question. basis, happens from I we

with to their desire particularly to we raise partners, As prices, supplier to those brand they or talk indicate our very market names shares. continue strong

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the of that neutral earlier maybe headwinds from then big just to make that tailwinds, fuel. what I headwinds between perspective? have you’ll convey EPS that next an were that may could and you the be With year, Great, year, hope Is fuel In earlier? that maybe help question. your you that to to become headwind related know lapping trying with to one guys commentary regards you margin some the follow-up next

to of the this the supply goes back running this are we think as gas So about headwinds we’ve been of tremendous about this of talked I right? next think looks had right? year, fuel flat, that bigger it we the get create tailwind Rupesh, got don’t tailwinds and than about, we’ve income our has chain, think that hard in away we’ll doesn’t headwind year same have we’re almost margin getting but but of this gasoline a year. be flip year. as will EPS well headwinds both We’ve year. headwinds through see level - getting should point of a income to this help, other year year, I next to able flat diesel us us the gas too next any we’ll tailwinds, year won’t we will we that to cost but be covers We’ve right tailwind perspective. some year, back not them a the thing, same and got other tailwinds, at some are as do don’t right? diesel these to If have think this at from from that modeling tremendous see next under full mean up things put we There it, That far our either, don’t point. down, I

for Thank the great. all you Okay, color.

bet. You

The next your is question comes line Lejuez please from ahead. Paul Paul, from go open, Citi.

income all It the I’d Hey more said like, consumer the lower in the of what spot. income XQ, everyone, sounds are from this anything the see change commentary gaining but really you think doing are for bright just is drove that inflection think income inflection? Cheatham second it particularly Paul. consumer really like higher did about communicating Brandon you - you a was or like back go to was category low any I’m kind wondering, cohort quarter, sounds in the that behavior, that of that’s share wallet or that’s on and an consumer income all I I to when the strong cohort. your you

thanks Brandon, the morning Yes, for question.

growth we’ve The buy the a ton higher our year, we know, about. seeing seen of or into You the [indiscernible] year, business of come all this folks beginning talked we’ve income more. of in were as

seeing that. still are We

income trade-out lower I have up. In of down this continue seeing the higher very come happened story cohorts the and us. and market, lower certainly seen - for very, budgets to. as not down and our or income well, for good every year talked other out we’ve and as cohorts and behavior has they real also income performed we’ve purchasing try search earlier, seen been about dried trade value, cohorts, We’re in That that’s EBT

showing very Both happy so looking we that to, I and behaviors purchasing lower continuing. going. to are continue think behaviors how and they forward will with very us we’re income we’re healthy higher see our cohorts

we’re you’re members prioritize do, competitors, the do of to it. us. people value in with think showing are hopefully showing our credibility We’ve we they the everything as to continue continue some we’ll is why believing and got are we we prices folks, to that our I after pricing reward continue so to value, some ever that reason and we’ve - that right best scratching shown better

one and What of members follow-up, consumer percentage then engages I on to Got digital it, Thanks. and are is business? these you about out a of meaningful may, digital on It if sales. sales the seems that your comp like from side digitally, margin Anything there driver shopping days. call you? with with how the different anything

a for thanks growing that talked up, of our we haven’t about digital part Yes, business bringing day. over been the all It’s years.

a we’re remember, so, the to infrastructure, of over building As our term lo of, years and digital ago story a the well now you billion of and business time speak X%-ish behold longer spent or have four and business. bunch we and didn’t we’ve really a dollars

that, are members in most our where Our time. them we’re saving BOPIC reacting and the of particularly really really business, curbside to parts

throwing Our aim things shops, but around for walking clubs them - people but in their to off We save to to get seen their can back to going also the still we our opportunistic them is time. their I our clubs, behavior value, that’s money spend that either. not want basket it’s keep have fall in save for members great. If time not we’ve routine shops,

paper. money. They on strides to and digital, starting or to important online product we’ll our digitally It’s promotional members, coming you express do coupons, to think make are a engage way - in most to coupons a been you years have Both digitally promote digital and that and clubs, reward three-quarters members best our to of you check even the the our or they us product for tremendous from popular. minutes. huge now on both made click that saving our with we investments that would we’ve phone, so tell amount over two-thirds, where out of pay well. clipping buy fact from convenience shop XX that. member our in nobody equation our they if are us will The about as ago us done our and we the prove members. doing I also saves with when We’ve paper your loves continue as our I lines promotion that or I of that digital, in paper it believe properties well app were they the those are been it. where close like product, more really that in of perspective, skip changed are our for three the parts so four was may our was things the acquisition promotion versus primary and so do Five time We’ve of people and done invested have you we’ll you combination and market pretty sort you often, We continue case is your members can digital so, the years us zero ago, on now worried coupons, that value is of

with Good holiday. Appreciate it. luck

Brandon. Thanks

very disconnect and and thank This may today’s session, Q&A for does call. concludes you you your We thus attendance your much today’s lines. now conclude