Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares shares in Thousands |
May 01, 2021 |
Jan. 30, 2021 |
May 02, 2020 |
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| Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
| Preferred stock, authorized (in shares) | 5,000 | 5,000 | 5,000 |
| Preferred stock, issued (in shares) | 0 | 0 | 0 |
| Preferred stock, outstanding (in shares) | 0 | 0 | 0 |
| Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
| Common stock, authorized (in shares) | 300,000 | 300,000 | 300,000 |
| Common stock, issued (in shares) | 144,018 | 143,428 | 142,349 |
| Common stock, outstanding (in shares) | 137,240 | 137,192 | 138,666 |
| Treasury stock, shares (in shares) | 6,778 | 6,236 | 3,683 |
Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parentheticals) - USD ($) $ in Thousands |
3 Months Ended | |
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May 01, 2021 |
May 02, 2020 |
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| Unrealized gain (loss) on cash flow hedge, tax | $ 1,240 | $ 5,421 |
Note 1 - Description of Business |
3 Months Ended |
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May 01, 2021 | |
| Notes to Financial Statements | |
| Business Description and Basis of Presentation [Text Block] |
1. Description of Business
BJ’s Wholesale Club Holdings, Inc. and its wholly-owned subsidiaries is a leading warehouse club operator primarily on the east coast of the United States. As of May 1, 2021, the Company operated 221 warehouse clubs and 151 gas stations in 17 states.
The Company follows, and reports based on the National Retail Federation’s fiscal calendar. The thirteen week periods ended May 1, 2021 and May 2, 2020 are referred to as the "first quarter of fiscal year 2021" and the "first quarter of fiscal year 2020," respectively.
The novel coronavirus ("COVID-19") pandemic has severely impacted the economies of the U.S. and other countries around the world. In the preparation of these financial statements and related disclosures we have assessed the impact that COVID-19 has had on our estimates, assumptions and accounting policies and made additional disclosures, as necessary.
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Note 2 - Summary of Significant Accounting Policies |
3 Months Ended |
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May 01, 2021 | |
| Notes to Financial Statements | |
| Significant Accounting Policies [Text Block] |
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying interim financial statements of BJ’s Wholesale Club Holdings, Inc. are unaudited and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America ("GAAP").
The consolidated balance sheet as of January 30, 2021 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the first quarter of fiscal year 2021 are not necessarily indicative of future results or results to be expected for fiscal year 2021. The Company’s business, in common with the business of retailers generally, is subject to seasonal influences. The Company’s sales and operating income have typically been highest in the fourth quarter holiday season and lowest in the first quarter of each fiscal year.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year 2020, as filed with the Securities and Exchange Commission on March 19, 2021.
Recently Adopted Accounting Pronouncements
The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2020. There have been no material changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal year 2021.
Income Taxes (ASU 2019-12)
In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this standard as of January 31, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
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Note 3 - Revenue Recognition |
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| Revenue from Contract with Customer [Text Block] |
3. Revenue Recognition
Performance Obligations
The Company identifies each distinct performance obligation to transfer goods (or bundle of goods) or services. The Company recognizes revenue as it satisfies a performance obligation by transferring control of the goods or services to the customer.
Net sales—The Company recognizes net sales at clubs and gas stations when the customer takes possession of the goods and tenders payment. Point of sale transactions at the Company’s clubs and gas stations, excluding sales taxes, represented approximately 93% of the Company’s net sales and approximately 91% of the Company’s total revenues for the thirteen weeks ended May 1, 2021. Sales taxes are recorded as a liability at the point of sale. Revenue is recorded at the point of sale based on the transaction price on the shelf sign, net of any applicable discounts, sales taxes and expected refunds. For e-commerce sales, the Company recognizes sales when control of the merchandise is transferred to the customer, which is typically at the shipping point.
BJ’s Perks Rewards and My BJ's Perks programs—The Company’s BJ’s Perks Rewards® membership program allows participating members to earn 2% cash back, up to a maximum of $500 per year, on qualified purchases made at BJ’s. The Company also offers a co-branded credit card program, the My BJ’s Perks® program, which allows My BJ's Perks® Mastercard credit card holders to earn up to 5% cash back on eligible purchases made at BJ’s and up to 2% cash back on purchases made with the card outside of BJ’s. Cash back has been in the form of electronic awards issued in $10 increments that may be used online or in-club at the register and expire six months from the date issued.
Earned awards may be redeemed on future purchases made at the Company. The Company recognizes revenue for earned awards when customers redeem such awards as part of a purchase at one of the Company’s clubs or the Company’s website. The Company accounts for these transactions as multiple element arrangements and allocates the transaction price to separate performance obligations using their relative fair values. The Company includes the fair value of award dollars earned in deferred revenue at the time the award dollars are earned. This liability was $24.8 million at May 1, 2021, $25.5 million at January 30, 2021 and $28.6 million at May 2, 2020.
Royalty revenue received in connection with the My BJ's Perks co-brand credit card program is variable consideration and is considered deferred until the card holder makes a purchase. The Company’s total deferred royalty revenue related to the outstanding My BJ’s Perks Rewards was $18.0 million, $13.5 million and $14.8 million at May 1, 2021, January 30, 2021 and May 2, 2020, respectively. The timing of revenue recognition of these awards dollars is driven by actual customer activities, such as redemptions and expirations. As of May 1, 2021, the Company expects to recognize $12.8 million of the deferred revenue in fiscal year 2021 and expects the remainder to be recognized in the years thereafter.
Membership—The Company charges a membership fee to its customers. That fee allows customers to shop in the Company’s clubs, shop on the Company’s website and purchase gasoline at the Company’s gas stations for the duration of the membership, which is generally 12 months. Because the Company has the obligation to provide access to its clubs, website and gas stations for the duration of the membership term, the Company recognizes membership fees on a straight-line basis over the life of the membership. The Company’s deferred revenue related to membership fees was $167.8 million, $155.6 million and $157.6 million at May 1, 2021, January 30, 2021 and May 2, 2020, respectively.
Gift Card Program—The Company sells BJ’s gift cards in both physical and digital format, which allow customers to redeem the card for future purchases equal to the amount of the original purchase price of the gift card. Revenue from gift card sales is recognized in proportion to its rate of gift card redemptions because the Company’s performance obligation to redeem the gift card for merchandise is satisfied when the gift card is redeemed. The Company also recognizes breakage in proportion to its rate of gift card redemptions. Deferred revenue related to gift cards was $9.6 million, $10.3 million and $9.8 million at May 1, 2021, January 30, 2021 and May 2, 2020, respectively. The Company recognized $8.8 million and $10.2 million of revenue from gift card redemptions in the first quarter of fiscal year 2021 and first quarter of fiscal year 2020, respectively.
Disaggregation of Revenue
The Company’s club retail operations, which represent substantially all of its consolidated total revenues, are the Company’s only reportable segment. All the Company’s identifiable assets are 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 following table summarizes the Company's percentage of net sales disaggregated by category:
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Note 4 - Debt and Credit Arrangements |
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4. Debt and Credit Arrangements
The following table summarizes the Company's debt (in thousands):
ABL Facility
The ABL Facility is comprised of a $950.0 million revolving credit facility and a $50.0 million term loan. The ABL Facility is secured on a senior basis by certain "liquid assets" of the Company and secured on a junior basis by certain "fixed assets" of the Company. The $50.0 million term loan payment terms are restricted in that the term loan cannot be repaid unless all loans outstanding under the revolving credit facility are repaid, and once repaid, cannot be re-borrowed. The availability under the $950.0 million revolving credit facility is restricted based on eligible monthly merchandise inventories and receivables, as defined in the agreement governing the ABL Facility (the "ABL Facility Agreement"). As amended, interest on the revolving credit facility is calculated either at LIBOR plus a range of 125 to 175 basis points or a base rate plus a range of 25 to 75 basis points; and interest on the term loan is calculated at LIBOR plus a range of 200 to 250 basis points or a base rate plus a range of 100 to 150 basis points, in all cases based on excess availability. The applicable spread of LIBOR and base rate loans at all levels of excess availability steps down by 12.5 basis points upon achieving total net leverage of 3.00 to 1.00. The ABL Facility also provides a sub-facility for issuances of letters of credit subject to certain fees defined in the ABL Facility Agreement. The ABL Facility is subject to various commitment fees during the term of the facility based on utilization of the revolving credit facility, which is scheduled to mature on August 17, 2023. On April 30, 2021, the Company used $50.0 million of cash and cash equivalents to pay down amounts outstanding on the ABL Facility.
At May 1, 2021, there was $ 260.0 million outstanding in loans under the ABL Facility and $15.5 million in outstanding letters of credit. As of May 1, 2021, the interest rate on the revolving credit facility was 1.24%, the interest rate of the term loan loan was 2.11% and unused capacity was $650.4 million.
At January 30, 2021, there was $310.0 million outstanding in loans under the ABL Facility and $15.0 million in outstanding letters of credit. The ABL Facility Agreement provides for a stepdown in the interest rate upon the achievement of certain debt ratings upgrades, which were achieved in July 2020. As of January 30, 2021, the interest rate on the revolving credit facility was 1.25%, the interest rate of the term loan loan was 2.14% and unused capacity was $641.1 million.
At May 2, 2020, there was $50.0 million outstanding in loans under the ABL Facility and $22.1 million in outstanding letters of credit. As of May 2, 2020, the interest rate on the revolving credit facility was 1.45%, the interest rate of the term loan loan was 2.98% and unused capacity was $770.6 million.
First Lien Term Loan
The Company's First Lien Term Loan matures on February 3, 2024. Voluntary prepayments are permitted. Principal payments must be made on the First Lien Term Loan pursuant to an annual excess cash flow calculation when the net leverage ratio exceeds 3.50 to 1.00. The First Lien Term Loan is subject to certain affirmative and negative covenants but no financial covenants. It is secured on a senior basis by certain "fixed assets" of the Company and on a junior basis by certain "liquid" assets of the Company.
On January 29, 2020, the Company amended its First Lien Term Loan to reduce the applicable interest rates. As amended, the First Lien Term Loan had an initial principal amount of $1,315.2 million and interest is calculated either at LIBOR plus 225 basis points or a base rate plus 125 basis points, and provided for a 25 basis point step down in the interest rate upon the achievement of certain debt ratings upgrades. Total fees associated with the refinancing were approximately $1.7 million. The Company expensed $0.1 million of previously capitalized debt issuance costs and original issue discount and expensed $1.7 million of new third-party fees.
On July 13, 2020, the Company paid $150.0 million of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $1.3 million of previously capitalized deferred debt issuance costs and original issue discount. On July 29, 2020, upon the achievement of certain credit ratings upgrades, the base rate was reduced to LIBOR plus 200 basis points.
On October 30, 2020, the Company borrowed $260.0 million from the ABL Facility. The proceeds from the Company's borrowing and $100.0 million of the Company's cash and cash equivalents were used to pay $360.0 million of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $2.8 million of previously capitalized debt issuance costs and original issue discount.
On April 30, 2021, the Company used $100.0 million of cash and cash equivalents to pay $100.0 million of the principal amount due on the First Lien Term Loan. In connection with the payment, the Company expensed $0.7 million of previously capitalized debt issuance costs and original issue discount.
There was $701.9 million, $801.9 million and $1,311.9 million outstanding on the First Lien Term Loan at May 1, 2021, January 30, 2021 and May 2, 2020, respectively. Interest rates for the First Lien Term Loan were 2.11%, 2.13% and 3.08% at May 1, 2021, January 30, 2021 and May 2, 2020, respectively.
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Note 5 - Interest Expense, Net |
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| Other Nonoperating Income and Expense [Text Block] |
5. Interest Expense, net
The following details the components of interest expense for the periods presented (in thousands):
Interest expense decreased due to lower debt balances outstanding and lower interest rates, partially offset by a $4.7 million loss on our cash flow hedge and a $0.7 million loss on the debt extinguishment in the first quarter of fiscal year 2021. |
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Note 6 - Commitment and Contingencies |
3 Months Ended |
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May 01, 2021 | |
| Notes to Financial Statements | |
| Commitments and Contingencies Disclosure [Text Block] |
6. 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 loss to the consolidated financial statements.
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Note 7 - Stock Incentive Plans |
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| Share-based Payment Arrangement [Text Block] |
7. 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 the grant of stock options, restricted stock, dividend equivalents, stock payments, restricted stock units, performance shares, other incentive awards, stock appreciation rights, and cash awards. Prior to the adoption of the 2018 Plan, the Company granted stock-based compensation to employees and non-employee directors, respectively, under the Fourth Amended and Restated 2011 Stock Option Plan of BJ's Wholesale Club, Inc. (f/k/a Beacon Holding Inc.), as amended (the "2011 Plan") and the 2012 Director Stock Option Plan of BJ’s Wholesale Club Holdings, Inc. (f/k/a Beacon Holding, Inc.), as amended (the "2012 Director Plan"). No further grants will be made under the 2011 Plan or the 2012 Director Plan.
The 2018 Plan authorizes the issuance of 13,148,058 shares, including 985,369 shares that were reserved but not issued under the 2011 Plan and the 2012 Director Plan. If an award under the 2018 Plan, the 2011 Plan or the 2012 Director Plan is forfeited, expires or is settled for cash, any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the 2018 Plan. Additionally, shares tendered or withheld to satisfy grant or exercise price, or tax withholding obligations associated with an award under the 2018 Plan, the 2011 Plan or the 2012 Director Plan will be added to the shares authorized for grant under the 2018 Plan. The following shares may not be used again for grant under the 2018 Plan: (1) shares subject to a stock appreciation right ("SAR") that are not issued in connection with the stock settlement of the SAR upon its exercise and (2) shares purchased on the open market with the cash proceeds from the exercise of options under the 2018 Plan, 2011 Plan or 2012 Director Plan. As of May 1, 2021, there were 5,470,034 shares available for future issuance under the 2018 Plan.
On April 16, 2021, the Compensation Committee approved a modification to the equity awards agreements under the 2011 Plan, 2012 Director Plan and 2018 Plan. In the event that an employee is terminated due to death, or disability, the modified equity award agreements provide for: (i) full vesting of all time-based awards, including restricted stock awards and stock options, (ii) pro-rata vesting of all performance-based awards, including performance share units, based on actual performance as of the end of the applicable performance period, pro-rated based on the period of employment during the applicable performance period, and (iii) the extension of the post-termination exercise window for vested stock options.
The following table summarizes the Company’s stock award activity during the thirteen weeks ended May 1, 2021 (shares in thousands):
Stock-based compensation expense was $27.3 million and $5.5 million for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively. Stock-based compensation expense in the thirteen weeks ended May 1, 2021 included $17.5 million of stock-based compensation expense related to the modification of stock awards associated with the passing of the former President and Chief Executive Officer (CEO), Lee Delaney.
On June 14, 2018, the Company’s board of directors adopted, and its stockholders approved, the BJ's Wholesale Club Holdings, Inc. Employee Stock Purchase Plan (the "ESPP"), which became effective the day prior to the first day of public trading of the Company’s equity securities. The aggregate number of shares of common stock that were to be reserved for issuance under the ESPP was to be 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 board of directors. The offering under the ESPP commenced on January 1, 2019. The amount of expense recognized for the thirteen weeks ended May 1, 2021 and May 2, 2020 was $0.1 million and $0.1 million, respectively. As of May 1, 2021, remaining shares available for issuance under the ESPP were 2,236,366.
Treasury Shares Acquired
The Company reacquired 226,404 shares to satisfy employees’ tax withholding obligations upon the vesting of restricted stock awards in the thirteen weeks ended May 1, 2021 and 83,353 shares in the thirteen weeks ended May 2, 2020. These reacquired shares were recorded as $10.0 million and $2.1 million of treasury stock for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively.
Share Repurchase Program
On December 19, 2019, the Company's board of directors authorized the repurchase of up to $250.0 million of the Company's outstanding common stock from time to time as market conditions warrant (the "Program"). The Program expires at the end of fiscal year 2021. The Company initiated the Program to mitigate potentially dilutive effects of stock options and shares of restricted stock granted by the Company, in addition to enhancing shareholder value. As of May 1, 2021, $136.4 million remained available to purchase under the Program. The Company repurchased 315,000 shares for $14.0 million during the thirteen weeks ended May 1, 2021.
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Note 8 - Income Taxes |
3 Months Ended |
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May 01, 2021 | |
| Notes to Financial Statements | |
| Income Tax Disclosure [Text Block] |
8. Income Taxes
The effective income tax rate is based on estimated income from continuing operations for the fiscal year, as well as discrete adjustments, if any, in the applicable quarterly periods. The Company projects the estimated annual effective tax rate for fiscal year 2021 to be 26.7%, 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 from continuing operations was 23.7% and 21.5% for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively. The increase in the effective tax rate is due to lower excess tax benefits from stock-based compensation in the first quarter of fiscal year 2021 and favorable, permanent true-ups in the first quarter of fiscal year 2020.
We are subject to taxation in the U.S. federal and various state taxing jurisdictions. In general, the Company’s tax years from forward remain open and subject to examination by the Internal Revenue Service and various state taxing authorities; however, certain ongoing state audits and appeals relate to periods prior to 2016. |
Note 9 - Fair Value Measurements |
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| Fair Value Disclosures [Text Block] |
9. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date or “exit price.” The inputs used to measure fair value are generally classified into the following hierarchy:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not observable for the asset or liability.
Level 3: Unobservable inputs for the asset or liability.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The fair values of the Company’s derivative instruments are based on quotes received from third-party banks and represent the estimated amount the Company would pay to terminate the agreements taking into consideration current interest rates as well as the creditworthiness of the counterparties. These inputs are considered to be Level 2.
Financial Assets and Liabilities
The gross carrying amount and fair value of the Company’s debt at May 1, 2021 are as follows (in thousands):
The gross carrying amount and fair value of the Company’s debt at January 30, 2021 are as follows (in thousands):
The gross carrying amount and fair value of the Company’s debt at May 2, 2020 are as follows (in thousands):
The fair value of debt was based on quoted market prices and on borrowing rates available to the Company as of May 1, 2021, January 30, 2021 and May 2, 2020. These inputs are considered to be Level 2.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The Company measures certain non-financial assets and liabilities, including long-lived assets, 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, approximates their carrying value due to the short-term maturities of these instruments. |
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Note 10 - Earnings Per Share |
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| Earnings Per Share [Text Block] |
10. Earnings Per Share
The table below reconciles basic weighted-average common shares outstanding to diluted weighted-average common shares outstanding for the thirteen weeks ended May 1, 2021 and May 2, 2020:
112,759 restricted shares and no options were excluded from the computation of diluted earnings for the thirteen weeks ended May 1, 2021 as their inclusion would have been anti-dilutive. Similarly, 875,894 and 780,256 stock options and restricted shares, respectively, were excluded from the computation of diluted earnings for the thirteen weeks ended May 2, 2020.
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Note 11 - Derivative Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Text Block] |
11. Derivative Financial Instruments
Interest Rate Swaps
On November 13, 2018, the Company entered into three forward starting interest rate swaps (the "interest rate swaps"), which became effective on February 13, 2019. The Company had fixed the LIBOR component of $1.2 billion of its floating rate debt at a rate of approximately 3.0% from February 13, 2019 to February 13, 2022.
On October 30, 2020, the Company borrowed $260.0 million from the ABL Facility. The proceeds from the Company's borrowing, as well as $100.0 million of the Company's cash and cash equivalents, were used to pay $360.0 million of the principal amount due on the First Lien Term Loan. Due to the payment of debt principal on the First Lien Term Loan, the Company determined that certain interest payments are no longer probable and that a portion of one of the interest rate swap agreements would be ineffective as a result of the payment of debt, and as such, reclassified $3.7 million of losses recorded in other comprehensive income to interest expense, net of tax.
On November 10, 2020, the Company terminated one of the interest rate swaps, which fixed $360.0 million of its floating rate debt at a rate of approximately 3.0%. An additional interest rate swap, which fixed $240.0 million of its floating rate debt at a rate of 3.0%, was determined to be ineffective. Gains and losses on the ineffective interest rate swap agreement will be recorded as interest expense.
On April 30, 2021, the Company used $150.0 million of its cash and cash equivalents to pay $100.0 million of the principal amount due on the First Lien Term Loan and $50.0 million of the outstanding amounts on the ABL Facility. The Company accelerated the release of unrealized losses to earnings on the ineffective interest rate swap agreements and reclassified $4.7 million of losses recorded in other comprehensive income to interest expense, net of tax.
The interest rate swaps were recorded as a liability of $20.2 million and $26.4 million at May 1, 2021 and January 30, 2021, respectively, with the net of tax amount for the effective and ineffective interest rate swaps recorded in other comprehensive income and interest expense, respectively. The interest rate swaps are recorded as a liability of $59.8 million at May 2, 2020, with the net of tax amount recorded in other comprehensive loss.
The Company elected hedge accounting for the interest rate swap agreements, and as such, the effective portion of the gains or losses was recorded as a component of other comprehensive income (loss) and the ineffective portion of gains or losses were recorded as interest expense. There were $4.4 million of gains and $19.4 million of losses recorded in other comprehensive loss for the thirteen weeks ended May 1, 2021 and May 2, 2020, respectively. The ineffective portion of gains in the first quarter of fiscal year 2021 of $1.8 million was recorded in interest expense. In the first quarter of fiscal year 2020, all interest rate swap agreements were effective.
The fair values of derivative instruments included on the consolidated balance sheets are as follows (in thousands):
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Significant Accounting Policies (Policies) |
3 Months Ended |
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May 01, 2021 | |
| Accounting Policies [Abstract] | |
| Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation
The accompanying interim financial statements of BJ’s Wholesale Club Holdings, Inc. are unaudited and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America ("GAAP").
The consolidated balance sheet as of January 30, 2021 is derived from the audited consolidated balance sheet as of that date. The unaudited results of operations for the first quarter of fiscal year 2021 are not necessarily indicative of future results or results to be expected for fiscal year 2021. The Company’s business, in common with the business of retailers generally, is subject to seasonal influences. The Company’s sales and operating income have typically been highest in the fourth quarter holiday season and lowest in the first quarter of each fiscal year.
These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the fiscal year 2020, as filed with the Securities and Exchange Commission on March 19, 2021.
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| New Accounting Pronouncements, Policy [Policy Text Block] | Recently Adopted Accounting Pronouncements
The accounting policies the Company follows are set forth in its audited financial statements for fiscal year 2020. There have been no material changes to these accounting policies, except as noted below for new accounting pronouncements adopted at the beginning of fiscal year 2021.
Income Taxes (ASU 2019-12)
In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The standard also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this standard as of January 31, 2021. The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
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Note 3 - Revenue Recognition (Tables) |
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Note 4 - Debt and Credit Arrangements (Tables) |
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| Schedule of Debt [Table Text Block] |
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Note 5 - Interest Expense, Net (Tables) |
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Note 7 - Stock Incentive Plans (Tables) |
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Note 9 - Fair Value Measurements (Tables) |
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| Fair Value, by Balance Sheet Grouping [Table Text Block] |
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Note 10 - Earnings Per Share (Tables) |
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| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Note 11 - Derivative Financial Instruments (Tables) |
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| Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block] |
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Note 1 - Description of Business (Details Textual) |
May 01, 2021 |
|---|---|
| Number of Stores | 221 |
| Number of Gas Stations | 151 |
| Number of States in which Entity Operates | 17 |
Note 3 - Revenue Recognition - Percentage of Net Sales Disaggregated by Category (Details) |
3 Months Ended | |
|---|---|---|
May 01, 2021 |
May 02, 2020 |
|
| Grocery [Member] | ||
| Grocery | 72.00% | 81.00% |
| General Merchandise and Services [Member] | ||
| Grocery | 15.00% | 11.00% |
| Gasoline and Other [Member] | ||
| Grocery | 13.00% | 8.00% |
Note 4 - Debt and Credit Arrangements - Debt Component (Details) - USD ($) $ in Thousands |
May 01, 2021 |
Jan. 30, 2021 |
May 02, 2020 |
|---|---|---|---|
| Long-term debt gross | $ 961,920 | $ 1,111,920 | $ 1,361,919 |
| Unamortized debt discount and debt issuance cost | (4,609) | (5,745) | (11,747) |
| Less: current portion | (210,000) | (260,000) | (15,377) |
| Long-term debt | 747,311 | 846,175 | 1,334,795 |
| ABL Facility [Member] | |||
| Long-term debt gross | 260,000 | 310,000 | 50,000 |
| First Lien Term Loan [Member] | |||
| Long-term debt gross | $ 701,920 | $ 801,920 | $ 1,311,919 |
Note 5 - Interest Expense, Net (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
May 01, 2021 |
May 02, 2020 |
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| Gain (Loss) on Hedging Activity | $ (4,709) | $ (0) |
| Gain (Loss) on Extinguishment of Debt, Total | $ (657) | $ (0) |
Note 5 - Interest Expense, Net - Components of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
May 01, 2021 |
May 02, 2020 |
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| Interest on debt | $ 12,032 | $ 19,643 |
| Interest on capital lease and financing obligations | 998 | 1,008 |
| Debt issuance costs amortization | 562 | 657 |
| Original issue discount amortization | 329 | 539 |
| Debt extinguishment charges | 657 | 0 |
| Loss on cash flow hedge | 4,709 | 0 |
| Capitalized interest | (2) | (3) |
| Interest expense, net | $ 19,285 | $ 21,844 |
Note 8 - Income Taxes (Details Textual) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
May 01, 2021 |
May 02, 2020 |
Jan. 29, 2022 |
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| Effective Income Tax Rate Reconciliation, Percent, Total | 23.70% | 21.50% | |
| Domestic Tax Authority [Member] | Internal Revenue Service (IRS) [Member] | |||
| Open Tax Year | 2016 2017 2018 2019 2020 2021 | ||
| State and Local Jurisdiction [Member] | |||
| Open Tax Year | 2016 2017 2018 2019 2020 2021 | ||
| Forecast [Member] | |||
| Effective Income Tax Rate Reconciliation, Percent, Total | 26.70% | ||
Note 9 - Fair Value Measurements - Carrying Amount and Fair Value of Debt (Details) - USD ($) $ in Thousands |
May 01, 2021 |
Jan. 30, 2021 |
May 02, 2020 |
|---|---|---|---|
| Long-term debt gross | $ 961,920 | $ 1,111,920 | $ 1,361,919 |
| Debt, fair value | 961,042 | 1,112,256 | 1,318,758 |
| First Lien Term Loan [Member] | |||
| Long-term debt gross | 701,920 | 801,920 | 1,311,919 |
| Debt, fair value | 701,042 | 802,256 | 1,268,758 |
| ABL Facility [Member] | |||
| Long-term debt gross | 260,000 | 310,000 | 50,000 |
| Debt, fair value | $ 260,000 | $ 310,000 | $ 50,000 |
Note 10 - Earnings Per Share (Details Textual) - shares |
3 Months Ended | |
|---|---|---|
May 01, 2021 |
May 02, 2020 |
|
| Restricted Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 112,759 | 780,256 |
| Share-based Payment Arrangement, Option [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares) | 0 | 875,894 |
Note 10 - Earnings Per Share - Summary of Basic and Diluted Net Income Per Share Attributable to Common Stockholders (Details) - shares |
3 Months Ended | |
|---|---|---|
May 01, 2021 |
May 02, 2020 |
|
| Basic (in shares) | 135,708,783 | 136,089,960 |
| Plus: Incremental shares of potentially dilutive securities (in shares) | 2,953,181 | 2,337,780 |
| Weighted-average number of common and dilutive potential common shares outstanding (in shares) | 138,661,964 | 138,427,740 |
Note 11 - Derivative Financial Instruments - Fair Values of Derivative Instruments (Details) - USD ($) $ in Thousands |
May 01, 2021 |
Jan. 30, 2021 |
May 02, 2020 |
|---|---|---|---|
| Interest rate swap, notional amount | $ 1,200,000 | ||
| Interest rate swap, fair value | (20,230) | $ (26,353) | $ (59,840) |
| Interest Rate Swap 1 [Member] | |||
| Interest rate swap, notional amount | $ 600,000 | ||
| Interest rate swap, fixed rate | 3.00% | ||
| Interest rate swap, fair value | $ (14,453) | (18,828) | (29,934) |
| Interest Rate Swap 2 [Member] | |||
| Interest rate swap, notional amount | $ 360,000 | ||
| Interest rate swap, fixed rate | 3.00% | ||
| Interest rate swap, fair value | $ 0 | 0 | (17,941) |
| Interest Rate Swap 3 [Member] | |||
| Interest rate swap, notional amount | $ 240,000 | ||
| Interest rate swap, fixed rate | 3.00% | ||
| Interest rate swap, fair value | $ (5,777) | $ (7,525) | $ (11,965) |