BJ's Wholesale Club (BJ) 23 May 232023 Q1 Earnings call transcript

Hello, everyone and welcome to the BJ’s Wholesale Club Q1 2023 Earnings Conference Call. My name is Carla and I will be coordinating your call today. [Operator Instructions] I’ll now pass the call over to your host, Cathy Park. Please go ahead.

Good morning and thank you for joining BJ’s Wholesale Club’s first quarter fiscal 2023 earnings conference call.

are Chief President Werner, Financial President, and today Officer; Chief Executive call Strategy Felice, Laura Officer; Development. the Bob and Eddy, Executive Vice On and Bill

statements call, laws. Form results from those securities of statements cause risks are a current may this Please and the materially our These differ during recent on and see our and our sections that meaning of Risk remember make Factors Please actual forward-looking description expectations within uncertainties. based on filed call. uncertainties the to XX-Q expectations federal this could the for most we involve with risks XX-K Form SEC described the that and of

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

call With that, the I will over Bob. to turn

first and discuss Thank level, our member-centric business Good our high to we club power joining the results of the pleasure at In quarter, warehouse channel. today us perform you here that the for this to the morning. today. It’s model continued be a demonstrating a reported to morning.

including market record surpassing the several We driving achieved in gains. with XX% company’s membership Day XXXX. by focusing in shared fiscal results adjusted incredible EBITDA share $X since Investor nearly adjusted billion you steadfastly our rate and significant tripling EPS milestones At these we value, renewal resulting on from a our transformation, March,

on We our these first quarter have profitable our We with business, and milestones and of expansion. program. the have created the digital footprint card we launch built accelerated a growing credit in co-brand

Merchandise underpinned combined value traffic operational program, with drive gains. a our report strong higher These exclude were first to in our sales is food quarter X%. comparable initiatives, first lifetime gas sundries club values, sales prop by robust sales EBITDA. quarter us to up the with which designed up This the adjusted strong and in enabled and X.X% performance, market businesses remained record comp share member as

member value once growth each Our in again per sales of in on consistent cohorts. income focus across strong resulted our

have of of growth our value were solidify in our diligently both the being first by as year-over-year choice to teams core members, have basis. With Further, needs. for comps more merchandise a market share are the our pleased on grown driven household worked in And pre-COVID half we their first BJ’s traffic. weekly quarter, top to than a and mind business across for our

a reminder, is about basis As was it than COVID. XX pre points higher our share market

dollars. shopping recognize that more live are environment, their to today’s they behavior conscious continue their and work consumers in We in remain as stretch to members

trends demand first the weather seasonal dampened unfavorable Additionally, in quarter.

was and As result, down services our general comp merchandise year-over-year. a X%

the diesel was Our on year Also invest causing last our gross last year, upswing year, became faced first in tailwinds margins. us the improved that headwinds costs. of quarter which by we pressured driven that inflation merchandise as to recall quarter supply dramatically items, chain margins declining this ocean key in the further and in freight

volumes. the with in down share our gasoline We quarter to trending is gallons still year-over-year in first up comp broader market, also compared the business gained which in

to improvement and higher $XXX adjusted in sales our EBITDA slightly The merchandise year’s it of profits growth, combination not was was comp the first gallon levels, of of XX% record contributed to per profit quarter a last first Though growth margin at million. quarter. than expected better-than-expected approximately nearly gas

this operating are strength our of quarter. the with very pleased We performance

the we value an priorities, shopping As and member we confident are in conveniently growth loyalty, prospects, choppiness by which delivering fueled unbeatable navigate remain improving through experience, our longer-term near-term, driving in digital growing our footprint. strategic our

X% spend me on serve members. We far Membership most each. is product grew member important quarter, Let by And and moment our X.X that we our valuable first and it’s asset. by million the the we sell, count in a currently most also approximately year-over-year. over

across digital have efforts acquisition well as the and existing contributed clubs acquisitions new in as Our growth to increase.

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

Xx know, you card we program credit best a the the member without program. today. into card launched of credit retail the members X rewards. years reinvesting our in took card. approach XX. many greater I committed than into we value new same the our even took we back back We around approach February of Remember, time all applying benefits co-brand almost better on We co-brand launched this because members to our lifetime ago, card As economics credit credit program have believe it’s when that

it’s say have a asked We are partner for safe they to not better think that in Capital could I investment. worth One. the

executed combined teams well, Our high admittedly surpassing expectations. very transition our the

as and launch, existing today, since the to conversion growing still accounts transitioned We the now here it’s have have about so early executed sit we But program. are we only XX successfully our of days days.

program. XXX,XXX back me have added since additional transitioned improvements, as to our One. success a addition Let co-brand accounts card. the been Club has those received club discount now extended more so experiencing finer per of excited members gallon to the credit we gas credit Capital we of accounts The without million members see that in we with the Also card XXXX we launch put part as well value members membership Plus new you fee from that outperforming with discount our to point members, over rewards about That’s X/X our $X.XX to we implemented expectations. some well, $XXX programs. – as card our the a program store gallons credit took We Club tier the proposition in to-date, X.X the top us only means of the benefits gas all our a And market-leading on to activated instant discount opportunity across the members tier have sold member an gas discount know, for data. too. This transition our over making our on include of Plus we also of gas about higher membership XX% are higher and provide with Furthermore, prices.

member will help our in drive We value. growth believe tier which, yield membership lifetime will greater new higher penetration, continued the in program turn,

the card Over membership we in the that year, penetration foreshadowed may we the a co-brand credit temporary course last by of decline new program. to the driven transition experience higher tier

part pleased points up in am despite in tier year-over-year report the due This about I at our double-digit membership. XX% our quarter. percentage transition held to higher first growth X penetration $XXX in was that to steady the

Our strength dedication and to resulted measure of continue this last size record renewal their XX%. maintain a members growing expect quality member year value of several This including in membership both rate loyalty, and seek in to year, this is to as we in shopping. milestones the ultimate

to in quarter. approximately translated the these year-over-year income X% first of efforts All membership have fee growth

we Value to our our unbeatable our shopping always experience, believe in ourselves offer are delivering assortment to best the value experience by is and a to the that striving elements consistently paramount members at we showcasing members. and the is to business, best our prices. we how for to Ensuring various membership strengthen great we differentiate crucial loyalty. shopping are members best There

particularly our in key year, offer goal, the items, our coming investments period to basis improve at own Wellsley as water, the which a competitors. Last inflation, savings points grocery this of such remain we in XXX about dedicated high and in quarter Farms this position competitive across first We of we XX% our a pricing mass value to versus by strategic our set. investments making year, kept

water example which Farms and and own Jensen, we this earning trust of our at significant brands, reliability the Berkley offer As are we Wellsley through quality our members’ suggests savings.

this our members, time moderating inflation especially to in high-quality pleased are offer affordable more to remains be when alternatives We able current for elevated. while

our quarter, fact, market grocery overall in brand that point the growth owned of In our brand divisions more own the X quarter and in penetration year-over-year. growth about sundries first of sales contributing the during doubled than

our spend more, on brands our our goal us often well visit way are to XX% We of are own in engage therefore penetration. and who more Members members. better

with through to grow. improved which Our these we third convenience priority the preferences ways members driving over website, years in us and digital. strategic and Through is continue engage upon platforms our for app the have members’

loyal more March nearly we our on During Day, spend members more renewal members, rates. higher our members indicated that average digitally and by enabled mentioned XX% than as club only Investor are

the growing convenience is as growth adoption grew of of our lean deliver we members. The the sales digital, net approximately initiatives as our the will believe led was comp convenience by delivery. into that value club XX% sales. and merchandise structurally enabled advantaged we outsized to same-day Our digitally and to to well win quarter of business This first will curbside XX% in BOPIC with

forward. dramatically Finally, accelerated remain and focused on we this trajectory sustaining have real going our estate plans

openings Our have XXXX fiscal prior new outperformed since in openings years. club

delivered their rates example, renewal on point first higher these in For double-digit new year. tier have percentage penetration average clubs in and increases

clubs. we around expect XX year, continue new to This to open

XXth and make As month market. next the our you in Nashville expect state quarter into know, we opened in X entry our new clubs first to the

bringing these. to in commitment remains like to a members powerful unbeatable Our advantage times value our

to line market we businesses. As by we a are believe result, anchored top growing share, and our our well gain strength grocery in continue positioned

already credit value our strong launched card newly power. Our bolsters

members, deepen there new half will year. reinforce arrive services long-term they As begin assortments that delivering clubs at back of and part at loyalty, our and reliably our be need a transformation brand the in will of drive want we our for Ultimately, our great in this to order and growth. merchandising merchandise value to products general the

we to and to like our the for serving for hard communities in team members our team dedication and I’d who wrap, To are I listening for which thank members caring today, members work. their in our acknowledge your you operate. thank Before

a to success Your company. impact continue on our make of the efforts significant

I Laura and year. more turn details will provide on it our the results over now to for of rest to the outlook

Thank you, Bob.

commitment centers. like members club their BJ’s, team hard maintained work I’d our gratitude support strong Bob’s Before and for reiterate our quarter third I results. to at momentum have distribution to across begin, center our in we and Thanks clubs,

increase the prior sales first a were quarter the billion, Net over for $X.X year. X%

over Stronger range. Our in in year, club comparable low-teen the year-over-year. volumes per X% sales quarter sales decline the total dollars. gas Despite offset fell average last gallon first sales increased in growth merchandise price retail gas

sales was driven this exclude of than gas Merchandise traffic. by comp sales, increased by half and more which X.X%

our sales was a stack through sequential comp X-year The Our the of slight on quarter. moderated exhibiting on growth X.X% inflation basis. impact and

earlier, mentioned rely to Bob in by restock quarter As comp continue on household BJ’s and essentials. the X% grocery, sundries quarter as perishables grew our first division approximately our to our first in members on

this stack, X-year fourth pre-COVID during year-over-year division grew just a share quarter, levels. the gained We grew and above and overall about a On share the accelerated XX% remains X-year quarter, stack. our well which under market XX% on from

Our resulting a comp the That areas and more members, on strength amid XX% we general In well to and was being first a X% relevant of merchandise assortment in the an as about merchandise, quarter environment. cleaner drove for by by was X% season and apparel start comp spring slower quarter. said, industry are and in general services received consumer X-year the discerning faced decreased pockets wetter a our in stack. we – a broader also the increasingly down such

Our made experience our digital members’ than ever. convenient have shopping more offerings

X year-over-year with digitally engagement our enabled grew convenience increasing and sustain expectations In build to our share members over We and past in gains business, our remain approximately comp comp our first in This our continue fulfilled level XX% the were in services significant sales to grew with like the and by of enabled as of gas improving same-day slightly in the first our from upon committed quarter digital line we years. clubs quarter. with BOPIC XX% gallons first Digitally the sales delivery. year-over-year our time. by our quarter was

to better continues than and Our profits, slightly the progress while margins approximately X% have by gas quarter, and lower first marginally $XXX.X improving in business. gas outperformed Membership million in the MFI, underscore our internal grew the quarter. year-over-year, our income, made to we normal or fee plans, driven

launched attractive our including our co-branded ahead. members with also credit we the renewal value pleased are higher year, the lie records We to first that newly proposition year a opportunities Bob’s that the penetration, brings top membership last tier renewal easy share and our for trends, and growth card rates. achieved enthusiasm and tenured I program

margins. gross to on Moving

the rate and by due year-over-year, chain challenged XXX costs supply business, to much improved relief business Excluding points that our merchandise basis year. gross last in margin anticipated primarily welcome gasoline a our

mentioned margins last to the investments was price $XXX.X of lapped new Bob the and also made our year-over-year other year. negatively expenses attributable were strategic priorities. we our investments our to million. continued As for expansion The impacted accelerating primarily quarter to inflation, combat timing unit earlier, we drive increase which SG&A

unit I’d reminders. expansion, two On these offer

First, new will is own continue depreciation profile expense. and ramp growth this clubs as levering our year a our weighted to And effect have second, clubs, they to mature. elevating

SG&A to to the continue through rest of year. our slightly We expect delever the

margin million gross by largely growth. XX% EBITDA our adjusted a grew of and quarter approximately sales first and to merchandise first reflecting $XXX record Our quarter

EPS X% which due prior prior $XX.X was expense, approximately This the strong a million material tax periods quarter despite in the Finally, unexpected in tax compared was approximately in XX.X% have in year-over-year quarter. been operating first our performance. half to to of effective down rate to This XX.X% amounts. our adjusted our applied year $X.XX, largely should elevated

structure. to X $XXX with the We strength consistent Turning fortify years leverage, of sheet maintain of debt million work year. quarter balance this to future. net and first the our our of the and quarter X.X We to past last capital over with ended which expect the in fourth turns is

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

over excess repurchases. to share XXX,XXX our return to first have cash through under remaining we current shares $XXX million the and $XX continue million over In approximately authorization. shareholders at bought quarter, We back

and last current the our for demand. on macro the on of consumer broader touch outlook year. its now uncertainty we the me I backdrop Let the spoke, The time noted impact

spend sit we and a that As visit here in is we today, our consumer stores. see continuing to

I our our core value, the margin, dollars contribute That more are more advantaged On us, and favor in continued model, their while should necessities. execution of choosy and our with said, growth to are have of which strategic in allocating also business they with all also to dollars expressed they confidence spending delivering those priorities being commitment previously in business.

true ring These sentiments still today.

As offsetting sales, X% with excluding expect towards our merchandise club food strength grow in in continue more X% general to comparable such, fiscal to we the gas, XXXX business, conservative view range to a around end the lower performance. our

continue to the of through the inflation to year. rest expect We moderate

the in stronger the the of year We low we quarter are quarter. range, see We transformation single-digit of currently half in in back second comps the also confident expect second merchandising. our merchandise the comps slightly be and ongoing to the than

P&L. the down Moving

MFI margin on outlook are Our the remainder the year unchanged. and for of

the progress On moderate merchandise margins, in rate our highest as QX year. will through MFI the that will of believe meaningfully our gross rate we be improvement we growth expect We the year-over-year year.

expect gas comp gallons In business, to slight for year. our we the growth continue full in

that continue for structurally normalized we more margins to compared to profitable as and we As profitability, gas to will believe prior settle years. more

the Our start date assumptions we at had a normal profit with year. in to better of quarter, running touch the contemplated have as materialized per first but than the what clearly gallon

margin of we than XXXX’s volumes result, expected. we profitability year. optimistic prices, toughest a and being said, running we in are fiscal second gas still third That As originally comparisons this our more face higher across becoming will the quarters about and slightly

rate. on note quick our A tax

we tax the with merchandise than and levels normalizing our expect normal we for continue return of view fiscal range growth flat our to taxes EPS, more and the in-club to were maintain to XX% we approximately will start the sales of anticipated EPS improvements offset we higher in, year-over-year quarter to year, higher our QX. gas first rate be in margin expected While be the at to All remainder the that in slightly gross quarter the than year. expect XXXX second profitability,

to believe reiterate well our confidence we the deliver to positioned longer-term. like I’d of back we our it and turning made Before growth are have sustainable the in to transformation in business Bob, We our strength company.

back will Bob With turn final I for remarks. it that, to over

Thanks, Laura.

quarterly team in We’re the very proud of the great our results for quarter. first

an inherent and These Our our distribution Club for executing even that, our across membership, members advantages continue are by to Support team our our the clubs, digital members strategic us reward improvements is centers team our the priorities. Moreover, leadership merchandising, approach our expand club in differentiated with amplified our footprint. model on structural and talented our we channel warehouse how itself. Center our in to capabilities together have we passionate the and incredibly further

continue sustainable combined and this I stronger elements build powerful grow will for firmly long-term allow that to value company. us these believe to future maximize profitably business, our an even shareholder

I that, turn operator your back to questions. will over With the take to it now

first Goldman [Operator line question you. from Instructions] comes from Kate the Our McShane Thank of Sachs.

good a question. you if our little about bit could and of Thanks taking Hi, I morning. wondered just margins. the both MFI talk gross cadence for

with to mentioned the you think the regards to you strongest comments that expected MFI. QX in I prepared be

why think year gross the for of what about rest you we the case So the faced of how the year? you was with said in moderate for rest the that I that kind to think of compares. we the margin wondered and of expected terms And same it’s that then question, should

membership fee in to me gaps We the here, from let income good a for a a time. perspective. Thanks question. Kate. morning, but at one Good had them going is take the Laura quarter fill pretty

bodies. with MFI growth about and size and of of to from quality We our about grow X% membership that coming X% the continue a the

the we’ve types As innovate, for to offering we offers. to company ways been look and of grow continue membership different

those some different treatments. And of have accounting

things will stuff of some last some we some this new lapping of we – So year. – try year we’re tried this those year, that

And growth so of as that informs sort pacing this MFI of year. we go the through

slowing it work out. sort anticipating membership growth, just numbers really of aren’t down is We the how our

margin a the we outstanding perspective, from And had in an quarter quarter. first

did ends. job the distribution happened tailwinds Our circumstances just year and through rest cost diesel a tailwinds and of taking get would year, the the with last other of we say, odds advantage few lapping and managing and through and this the is declined of those merchants cost year lessen. the a I economic great freight ocean what as

to we sit quarter the year so feels And do like what’s any perspective. the from expect this Not knowing highest in margin. our we highest be today, it here the should But for to as us. certainly, gross QX of a inputs coming gross margin of be

Yes.

growth. I Kate, think, add, was will only XXX the bps thing would thing I would of Bob the of margins off the gross as head kind we covered is would MFI, meaningfully well, year. of course I the expect add over QX QX trail I into only on trail off it about and

growth So certainly will quarter. quarter by the rate moderate

Thank you.

you. Thank

question from Kelly of Wells Edward Fargo. comes the next Our line from

open. is Your now line

Hi, morning. guys. Good

Edward. Hi,

I wanted you to ask said Laura, I slightly stronger QX. cadence half comp guidance. the of you think about and than comp the guidance back the

see, meaningfully. think, We inflation pretty will I decelerate

us the how with a And gen of cadence, far thinking could about around more I’m could what help in so So QX? hoping you that, that? give you’re then running inflation merch maybe How as is part comp? little should us in color be we that expectation your that bit you

Yes. Thanks, morning. Ed. Good

think the balanced. moderate remainder be will year, it for will the I but relatively So of comp

levels business. year. of decelerate would you that talked And time. we quite about You some Day, think right we talked We’ve the underway general have will we our inflation about merchandise across Investor the remind the remainder for I transformation the there. have for that it

So as year that the business, of did in towards will half we the quarter. we GM specifically get back first holiday, better think piece than the of the comp in

minute, talk Ed, for Maybe, Yes. I’ll a too.

like some too, of year, of things we the or seen the is a you microcosm it. We’ve disinflation bit QX some a deflation will whatever call the certainly of to think see right? of or I rest

was input the in that I we I do point. QX I meaningfully sort we Laura expect than but spot will inflation lower Our that – global think inflation noted, we’ve first in the And QX of quarter. a It for that faster think bright year, model. in double was digits. know changed I don’t than continue. receding merchandise was a right is in our apparel. And had general We it’s the on in little had our as

business we had for comp And saw team half. us new on assortments. a for a in back moderate And influence would positive great That the I influence nice merchant for say, QX. our is that that refreshed has

and excited our green And the So I’m on I’m will what they looking shoots some see later in and to the can do year. members certainly at of to that seen react it. new as I’ve assortments how

So but new as I from some sit don’t QX, to here in too suffered whether. QX from breaking ground certainly talking it, much want not about talk we about suffered it any deflation,

here As And we in not still it’s warm. very you’ve certainly sit heard today, a as else, was it Boston from that everybody thing.

nicely. our informs holding QX will robust our quarter will there consumer But General the that come be we that is the informs And in do very comp. single-digit that business back. the So believe business low Merchandise in not and second view

talk will more the get and QX and half. here few about you we next weeks of through So the to back tell the end you at

Great.

Just quick follow-up. a

So was you that in have pretty sizable headwind unanticipated. tax QX a

optimistic full QX plan? Is maintained more aspects the really maybe around You think around of a coming sound, above year, that. a you’re but just bit now you that I operational in

No. have QX I Ed. really doesn’t much do it to mean, with

as our we’ve some part sure gas of is QX the and lap, lap. going worried is optimistic trips – everything of consumer the the on and macro highest the and and has membership to to economy out full that inflation we about business value I’m and things the overall I weeks. debt talked odd next to the some offering with will health And couple some lap the think There in long-term. there the headwinds are in drove of important about. for everybody right? the year, certainly and we’re an our We’re our prices gas year ceiling

here sit in the the we you great so business, And tax term thought was long this it quarter one QX will and kind we the a – pretty out. at good. operational quarter on And of the were looking we’re item of we We that at time. trends a bullish on year, work despite pointed

Thank you

Thank you.

from next question Chuck Grom Our comes Haskett. from Gordon

line is Your now open.

morning. Good Thanks.

And Just basis? Bob, the year-over-year a in a number I you’re as think us on saying absolute to of to question second quarter quarter building to first little a the basis or guidance. component margin on $X.XX. think can about that, is a bit follow-up quarter? on higher get that the the an then than blocks you that help and Is second that the

handle Why let that its since sure. Yes, don’t guidance Laura I related?

morning. Good Yes.

about So head We it absolute we margin little the a levels QX the bit than perspective, better inflation as and by the slightly talked will is basis, already. quarter I month through month. quarter, into on think And an a the moderate travel from Chuck.

a of year. diesel things lapped inventory I levels markdowns, we talked there that think were underlying from about last in we cost, high QX, lot

expect those those heading about that base we into perspective. as as won’t and think be QX – from meaningful we So a we –

through are, from very specifically perspective, where tell we and it gen head we QX, merch at a continue look where our levels we closely to watch we inventory the you, quarter. we into today, I as will would comfortable feel As sit but with we

Okay. And a just as follow-up.

the May sure weeks? guys running talk you if I you over range past date, – touched in think that the are of in few this, not month to single-digit you but quarter? the on low And comp cadence about the I’m I guess, can

Certainly, lower is again, don’t get I we were very not QX months into want to the QX. it feel get need here, digit X think than in of going were certainly half But to on low month some into you now. any is QX we be But certainly, into back then nearly we’re can and either because read we’re to is February like the should again, where And I sort there lower. long-term. better. too the just new for And through ground single I’m much break strongest dynamics bullish the us. We

Thanks. Makes sense.

Thanks, Chuck.

Thank you.

comes go question next ahead. from Stanley. from Our Gutman Simeon Morgan Please

Follow-up one and then I’ll part, in this yield.

wasn’t you per The markets – the trends first in fact of second Can competitive operators? can you’re are you market question there? which your approaching any did terms general that other and spread problematic. the have part about gallon taking merchandise you And managing cents any talk weather different is, Thank in gallon growth share, the is then gasoline you versus you.

categories Hey, morning. merchandise Simeon. general weather-sensitive Northeast. better patio sort Good sales, the sets tremendous did at of be like overall you perform good the look There geography wasn’t Southeast of in difference if a might but than do a example, the

embedded component weather is there. there So, in certainly a

tell that is members much reticent are the thing more we almost anything big about being biggest would you I However, seeing ticket.

picky of So, electronics, at television structure, and consumer at perspective. sets this patio very it’s from high if look if the high-dollar at you sort point you ticket look there out a a

it is profitability structurally you in referenced. members, certainly to which plays into business a as has that of it. Day, don’t Investor be business, it fantastic at we of gains done run years, more economy the run tremendous not image source only been bit to great how us those job that market value in has but for business plus profitable We out the something weather get sure. gas driving our every for great for little for talked And lifetime value. and team couple past profit. service a figuring show we The a day price So, But – to for our has about been and provide we frankly, over share our

so talked in of the the as We cardholder. gas you business Q&A much piece a as of of difference. entire one at when haven’t the the cardholder It’s for a And we member the that But gas is benefits $X.XX get from of they certainly, pieces far the a being with huge card co-brand become all business about effectively, as a bigger session. us well, a that get right.

So, to through that share. gain and and our discounts sharply we we the our build trips then will market tier program higher gasoline continue to that those on And our try program price on and will altogether. more also continue try give co-brand and we

a as we know, for discount you members As $X.XX rewards added our well.

So, that’s And resonating us members. certainly, a been long-term. for it’s with in great really business well the something our

luck. Good Thanks.

Simeon. Thanks

of comes America. question next Bank from Ohmes from Our Robby

line Your is open. now

Hi. Can you hear me, okay?

you, Yes. Robby? how We got and are it

do Yes. good. I Two about the us the that And if overlap Perfect. promotions remind competitively you other just Thanks. And in in environment? what am membership think what and curious from that quick like impact you Bob, highlight I membership their they or be us? is grocery Sam’s Club anything upticks questions, you are Okay. on can kind Terrific. going maybe of for about the competitive expect discounting? discounting, would talk can I

Sure. Certainly, It It’s question. has a fierce. environment good been. the always competitive is

retailers the world. competing the have against best joy We in the of

emulate. from their results have to own tried admired. some And own have Sam’s club results certainly, membership that as perspective. some out. And lessons what try be and from great certainly, to see so our ideas they to And do. to they great been more And are try aggressive our the stuff competitors doing take up point they has and we have to and are We well emulate do. we and great good more our stuff warehouse a what tick

think offer attract engagement years what get of will merchandise I to promotional. in calling and that’s members. bit I market our are to argue to in would the show it’s what we would our and little the just their then every is into the find to more that. share, to well, that businesses for getting value BJ’s function I everybody too. I And trying as from a And is little promotional do few general say everybody are, doing more and quarters. the you expected think try are and In strategies sales jobs at we day our would argue retain away innovate to see right to is membership trying few we We be I and last pretty to past sure, certainly, right you those and a when more trying That’s expect was And promotional sales. getting a what a be the QX And we their But better. right performance business do. for are. to member core to is be that’s everybody tell whether bit do job certainly, here continue what then I I is of are QX, would would to good consumers. competitors QX, of as

call, think color helpful. more? or on, you seeing the with out a the strength But is I better guys more low you you for – are can just gaining mentioned reline seeing there Any At any And of highlight cohorts. your all think or beginning income, with, – kind of can quick call I is income you That’s you follow-up. that you give? you are the there anything are

cohorts and our grown – with we of sales to and track each Look, you for member we that all. for disclose have trips

QX strata those end. clear high the pressure thought is there. I With very good in as that at than offer feeling tremendous quarter out pressure those there value. So, you would perspective. expect, the folks lower we said, that And It’s are them from that was a more economic

there And nicely so with has their us. business hung in

And as again, a we are all essentials to think Everybody general wants well. higher folks the the I save psyche sales out of Everybody right. as merchandise just of end. So money. that’s as trips needs consumer higher grew well your the the at great the their at And everyday place in find as feels value great there. some to economy and a like bumpy it’s end,

I you of same go. see the year, that rest become to thing So, we economy a we through expect place type as where would the greater tougher, will as gets get the of a

That’s Thanks. helpful.

Thanks Robby.

Baird. from Benedict Our ahead. next from go Please is Peter question

guys. morning Good

Just faster still on like thought. a grocery follow-up the how you just it seeing than maybe you wanted or to talked particularly you about full it. inflation little It the side, year sounds pricing see how were moderating, you on is

seeing terms are are X. like on seeing what in point any of Are get Pro competitors from Just where And to pricing you if you getting a you curious deflation? do you Bob, you curious disinflation? we of managing environment, are kind how just that about a that playbook the not business what is, deflationary the think to the event just in point, in

Yes. Good the Thanks It’s morning question. for Pete. a good really one.

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proof apparel mentioned an of kind point here. early You

was toys Investor the out at think Day. I called

particular – improve merchandise general kind that categories support remind merch see that later of Just to the the other business us opportunity you general and this year.

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and what so to shelves get on access foremost, need put that we understanding those has we can been team relationships and making to and things. first the And out the building sure

have like with. televisions – we time great businesses have that good in for been have electronics and relationships we We a long successful that

we too. assortment what We in to those trying make have standpoint, out the from back promotion businesses the assortment and off standpoint pricing really might are they do to figure half an right stronger,

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into see will we continue So, next and to iterate we get and and the better. how goes will few quarters, months it and weeks

so much. sounds It Thanks good.

is The Mike from Baker from question Davidson. next D.A.

open. is line Your

is lost reconnecting line him. have We open now. Mike, Mike. just Apologies, Hi your

conversation what way, know think don’t any guys I you with to into ask Bill concept so there. But more ago, and that going have what talked you the about of couple concept, Jesus, market about about on your I bring Okay. becomes wanted BJ’s Werner happened a just the quarters wants, interesting. in that test should how forward? that you maybe Can update versus initial seen customer and maybe us focused needs that on we

Hey morning. Mike. Good

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new second and Nashville our expand Vergne, the Tennessee, in we in think just State of in club We first So, as bullish club is remain footprint. La about the here vertical on – outside are really the how which in quarter. we general eyes all are the we and focused

Got it. Alright.

think one asked at short-term It a data if tell have longer tax the wasn’t mentioned your question, to you tax impacted your I and question, – lower or let how since by quarter. could. that a So, may the me do term guys been but it you ask I of which headwind in customers call, any on all impacted not with been of way all that have much first Thanks. may refunds may

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Okay. Fair Appreciated. enough.

You bet.

Our Mark next Please ahead. from go UBS. from question comes Carden

so Thanks for morning. much Good questions. taking my

your So, just you a Have have on headwinds? model this an some seen merchandise been mass your front, pressures competitors better general or insulate shrink. of bit these much merchant number from does increasing calling of of from and out a uptick you

our a – Mark, counterparts you are I talked in it across question. in see saying is we businesses. and Hey think start by great seeing definitely our a definitely business, me as thing, retail are their let organized do it retail it’s I my the industry, they to

membership get Your business, point – you we a our card – And material, it is is although have on to we and format need that it relevant from one. fact we see our a the we benefit in. a

our sizes, it’s team shrink keeping as and in has safe inventory, our most as bigger of members is our all day. possible so Our of And sort to keeping our stuff harder team and every work members low our wonderful largely track pack importantly, done really for. fill keeping

will business. we do our places that of losses environment be places, our to the Chicago their live a their time and not might work a most is in for be I first in a And And governments Coast, this or think it’s that obligation West problem are material the one in in on. might think of daily other like our have – see although short. and a ours some retail if certain is a markets, safer many, own local competitors. not society prosecute lower blue We particularly to government’s My than or feel provide of that that to today, to story a to industry some help part don’t the it be for politics mitigate ton It’s problem on it is the whole really one view needs But partners of will with shrink unfortunate state continue you places, continue crime. industry losses. in the people Albuquerque pointed like is blue it the that’s less reasons problem much across reasons the And hear industry. aside, you why us trying is the competitors for spend than some happening. to an a I our mitigate of problem but long as more

new you there Makes and in legacy there? markets. markets acquisition membership some been in has then pretty you are your seeing What your strong And sense. momentum seeing the any are front shifts on in trajectory

now a had have results existing we great in for membership new while markets. both Really, and

been Our team regardless acquiring of new pretty members has successful new existing in or markets.

We have very made over a tremendous been successful. digital that’s acquisition years, shift the towards

pretty they members in to One It’s members on of our on running we have quarter. putting about of one transitioned value, And that are all we prospective in is doing that the of about members, we to of the co-brand front service better place provide. the a great this have convenience. been credit that we all Capital have results to the offerings offers able use like card better And about, to a it’s team it it those each with our business. market. iterated go. As much A axes are out is lot our of that job better us show we lot in different things and having and a pleased and types we talked were And to

good and luck. Thanks so much

Mark. Thanks Great.

I your of you tell over get attention was in question. and to you will our last I support your the you summer we for QX. we And company. very thank everybody want think for and much. our touch in how did Thank with that

call. today’s concludes This

now disconnect You may your lines.