Cover page - USD ($)	12 Months Ended
Cover page - USD ($)	Feb. 01, 2020	Mar. 13, 2020	Aug. 02, 2019
Cover page.
Entity Registrant Name	BJ's Wholesale Club Holdings, Inc.
Entity Central Index Key	0001531152
Current Fiscal Year End Date	--02-01
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Type	10-K
Document Period End Date	Feb. 01, 2020
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		137,267,346
Entity Public Float			$ 2,931,400,711

Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 01, 2020	Feb. 02, 2019
Current assets:
Cash and cash equivalents	$ 30,204	$ 27,146
Accounts receivable, net	206,353	194,300
Merchandise inventories	1,081,502	1,052,306
Prepaid expenses and other current assets	41,961	63,454
Total current assets	1,360,020	1,337,206
Operating lease right-of-use assets, net	2,060,059
Property and equipment:
Land and buildings	375,375	390,243
Leasehold costs and improvements	214,209	203,394
Furniture, fixtures and equipment	1,135,892	1,039,360
Construction in progress	51,741	23,749
Total property and equipment, gross	1,777,217	1,656,746
Less: accumulated depreciation and amortization	(1,017,009)	(907,968)
Total property and equipment, net	760,208	748,778
Goodwill	924,134	924,134
Intangibles, net	146,985	200,870
Other assets	18,374	28,297
Total assets	5,269,780	3,239,285
Current liabilities:
Current portion of operating lease liabilities	343,377	254,377
Current portion of operating lease liabilities	123,751
Accounts payable	786,412	816,880
Accrued expenses and other current liabilities	547,876	506,431
Total current liabilities	1,801,416	1,577,688
Long-term operating lease liabilities	1,986,790
Long-term debt	1,337,308	1,546,471
Deferred income taxes	46,200	36,937
Other non-current liabilities	152,410	280,273
Commitments and contingencies (see Note 9)
STOCKHOLDERS’ DEFICIT
Preferred stock; $0.01 par value; 5,000 shares authorized, and no shares issued or outstanding	0	0
Common stock; par value $0.01; 300,000 shares authorized, 140,723 shares issued and 137,298 shares outstanding at February 1, 2020; 300,000 shares authorized, 138,099 shares issued and 137,317 shares outstanding at February 2, 2019	1,407	1,381
Additional paid-in capital	773,618	742,072
Accumulated deficit	(716,369)	(915,113)
Accumulated other comprehensive loss	(26,586)	(11,315)
Treasury stock, at cost, 3,425 shares at February 1, 2020 and 782 shares at February 2, 2019	(86,414)	(19,109)
Total stockholders’ deficit	(54,344)	(202,084)
Total liabilities and stockholders’ deficit	$ 5,269,780	$ 3,239,285

Consolidated Balance Sheets (Parenthetical) - $ / shares	Feb. 01, 2020	Feb. 02, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	300,000,000	300,000,000
Common stock, issued (in shares)	140,723,000	138,099,000
Common stock, outstanding (in shares)	137,298,000	137,317,000
Treasury stock (in shares)	3,425,000	782,000

Consolidated Statements Of Operations And Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Feb. 02, 2019	Feb. 03, 2018
Total revenues	$ 13,190,707	$ 13,007,347	$ 12,754,589
Cost of sales	10,763,926	10,646,452	10,513,492
Selling, general and administrative expenses	2,059,430	2,051,324	2,017,821
Pre-opening expense	15,152	6,118	3,004
Operating income	352,199	303,453	220,272
Interest expense, net	108,230	164,535	196,724
Income from continuing operations before income taxes	243,969	138,918	23,548
Provision (benefit) for income taxes	56,212	11,826	(28,427)
Income from continuing operations	187,757	127,092	51,975
Income (loss) from discontinued operations, net of income taxes	(581)	169	(1,674)
Net income	$ 187,176	$ 127,261	$ 50,301
Income per share attributable to common stockholders — basic:
Income from continuing operations (in usd per share)	$ 1.38	$ 1.09	$ 0.59
Loss from discontinued operations (in usd per share)	(0.01)	0.00	(0.02)
Net income (in usd per share)	1.37	1.09	0.57
Income (loss) per share attributable to common stockholders - diluted:
Income from continuing operations (in usd per share)	1.35	1.05	0.56
Loss from discontinued operations (in usd per share)	0.00	0.00	(0.02)
Net income (in usd per share)	$ 1.35	$ 1.05	$ 0.54
Weighted-average number of common shares outstanding:
Basic (in shares)	136,173,675	116,599,102	88,385,864
Diluted (in shares)	139,109,188	121,134,850	92,263,577
Other comprehensive income:
Postretirement medical plan adjustment, net of income tax of $385, $94 and $204, respectively	$ (990)	$ 240	$ (312)
Unrealized loss on cash flow hedge, net of income tax of $5,554, $5,454 and $0, respectively	(14,281)	(13,956)	0
Total other comprehensive loss	(15,271)	(13,716)	(312)
Total comprehensive income	171,905	113,545	49,989
Product
Total revenues	12,888,556	12,724,454	12,495,995
Membership
Total revenues	$ 302,151	$ 282,893	$ 258,594

Consolidated Statements Of Operations And Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Feb. 01, 2020	Feb. 02, 2019	Feb. 03, 2018
Income Statement [Abstract]
Postretirement medical plan adjustment, tax	$ (385)	$ 94	$ (204)
Unrealized loss on cash flow hedge, tax	$ (5,554)	$ (5,454)	$ 0

Consolidated Statements Of Contingently Redeemable Common Stock And Stockholders' Deficit - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Treasury Stock
Beginning balance (in shares) at Jan. 28, 2017		87,073,000				0
Beginning balance at Jan. 28, 2017	$ (347,211,000)	$ 871,000	$ 6,397,000	$ (356,760,000)	$ 2,281,000	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	50,301,000			50,301,000
Postretirement medical plan adjustment, net of tax	(312,000)				(312,000)
Unrealized loss on cash flow hedge, net of tax	0
Dividends paid	(735,518,000)		(6,397,000)	(729,121,000)
Stock compensation expense	9,102,000		9,102,000
Options exercised	(2,850,000)		(2,850,000)
Call of shares	(554,000)		(554,000)
Other equity transactions	(2,815,000)		(2,815,000)	(432,000)	432,000
Ending balance (in shares) at Feb. 03, 2018		87,073,000				0
Ending balance at Feb. 03, 2018	$ (1,029,857,000)	$ 871,000	2,883,000	(1,036,012,000)	2,401,000	$ 0
Beginning balance (in shares) at Jan. 28, 2017	1,043,000
Beginning balance at Jan. 28, 2017	$ 8,145,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Options exercised (in shares)	616,000
Options exercised	$ 3,708,000
Call of shares (in shares)	(203,000)
Call of shares	$ (1,415,000)
Ending balance (in shares) at Feb. 03, 2018	1,456,000
Ending balance at Feb. 03, 2018	$ 10,438,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	127,261,000			127,261,000
Postretirement medical plan adjustment, net of tax	240,000				240,000
Unrealized loss on cash flow hedge, net of tax	(13,956,000)				(13,956,000)
Dividends paid	(25,000)		(25,000)
Common stock issued for public offering, net of related fees (in shares)		43,125,000
Common stock issued for public offering, net of related fees	685,889,000	$ 431,000	685,458,000
Common stock issued under stock incentive plans (in shares)		4,875,000
Common stock issued under stock incentive plans	0	$ 49,000	(49,000)
Stock reclassification as a result of public offering (in shares)		1,736,000
Stock reclassification as a result of public offering	13,202,000	$ 17,000	13,185,000
Common stock issued related to follow-on offering (in shares)		1,290,000
Common stock issued related to follow-on offering	0	$ 13,000	(13,000)
Common stock repurchased upon vesting of stock awards (in shares)						(781,866)
Common stock repurchased upon vesting of stock awards	(19,109,000)					$ (19,109,000)
Stock compensation expense	57,677,000		57,677,000
Options exercised	(2,210,000)		(2,210,000)
Call of shares	(12,000)		(12,000)
Net shares used to pay tax withholdings upon option exercise	(22,883,000)		(22,883,000)
Net cash received on option exercises	$ 8,061,000		8,061,000
Ending balance (in shares) at Feb. 02, 2019	137,317,000	138,099,000				(782,000)
Ending balance at Feb. 02, 2019	$ (202,084,000)	$ 1,381,000	742,072,000	(915,113,000)	(11,315,000)	$ (19,109,000)
Increase (Decrease) in Temporary Equity [Roll Forward]
Stock reclassification as a result of public offering (in shares)	(1,736,000)
Stock reclassification as a result of public offering	$ (13,202,000)
Options exercised (in shares)	280,000
Options exercised	$ 2,792,000
Call of shares	$ (28,000)
Ending balance (in shares) at Feb. 02, 2019	0
Ending balance at Feb. 02, 2019	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	187,176,000			187,176,000
Postretirement medical plan adjustment, net of tax	(990,000)				(990,000)
Unrealized loss on cash flow hedge, net of tax	(14,281,000)				(14,281,000)
Dividends paid	(25,000)		(25,000)
Common stock issued under stock incentive plans (in shares)		2,536,000
Common stock issued under stock incentive plans	0	$ 25,000	(25,000)
Common stock repurchased upon vesting of stock awards (in shares)						(143,205)
Common stock repurchased upon vesting of stock awards						$ (3,800,000)
Common stock issued under ESPP plan (in shares)		88,000
Common stock issued under ESPP plan	1,729,000	$ 1,000	1,728,000
Stock compensation expense	$ 18,796,000		18,796,000
Treasury Stock purchases (in shares)	0					(2,643,000)
Treasury stock purchases	$ (67,305,000)					$ (67,305,000)
Net cash received on option exercises	$ 11,072,000		11,072,000
Ending balance (in shares) at Feb. 01, 2020	137,298,000	140,723,000				(3,425,000)
Ending balance at Feb. 01, 2020	$ (54,344,000)	$ 1,407,000	$ 773,618,000	$ (716,369,000)	$ (26,586,000)	$ (86,414,000)
Ending balance (in shares) at Feb. 01, 2020	0
Ending balance at Feb. 01, 2020	$ 0

Consolidated Statements Of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements Of Cash Flows - USD ($)	Feb. 01, 2020	Feb. 02, 2019	Feb. 03, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 187,176,000	$ 127,261,000	$ 50,301,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	157,000,000	162,223,000	164,061,000
Amortization of debt issuance costs and accretion of original issues discount	5,172,000	6,556,000	8,463,000
Debt extinguishment and refinancing charges	2,167,000	23,602,000	9,788,000
Impairment charges	13,306,000	3,962,000	0
Stock-based compensation expense	18,796,000	57,677,000	9,102,000
Deferred income tax provision (benefit)	10,246,000	(12,314,000)	(35,623,000)
Other non-cash items, net	2,028,000	2,362,000	3,892,000
Increase (decrease) in cash due to changes in:
Accounts receivable	(12,053,000)	(3,976,000)	(24,507,000)
Merchandise inventories	(29,196,000)	(33,168,000)	12,706,000
Prepaid expenses and other current assets	22,169,000	26,338,000	(47,867,000)
Other assets	1,710,000	874,000	967,000
Accounts payable	(20,868,000)	68,884,000	36,081,000
Change in book overdrafts	(12,094,000)	(19,770,000)	7,523,000
Accrued expenses	18,134,000	19,121,000	8,236,000
Other non-current liabilities	(8,550,000)	(2,529,000)	6,962,000
Net cash provided by operating activities	355,143,000	427,103,000	210,085,000
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment, net of disposals	(196,901,000)	(145,913,000)	(137,466,000)
Proceeds from sale leaseback transaction	21,606,000	0	0
Net cash used in investing activities	(175,295,000)	(145,913,000)	(137,466,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long term debt	0	0	547,544,000
Payments on long term debt	(14,829,000)	(36,167,000)	(14,437,000)
Paydown of the First Lien Term Loan and extinguishment of Second Lien Term Loan	(200,000,000)	(975,633,000)	0
Proceeds from ABL facility	1,390,000,000	1,587,000,000	1,645,000,000
Payments on ABL facility	(1,301,000,000)	(1,515,000,000)	(1,483,000,000)
Debt issuance costs paid	(21,000)	(982,000)	(24,635,000)
Dividends paid	(25,000)	(25,000)	(735,518,000)
Financing obligations payments	(612,000)
Capital lease obligations payments		(691,000)	(657,000)
Net cash received (paid) from stock option exercises	11,072,000	(14,240,000)	858,000
Net cash received from Employee Stock Purchase Program (ESPP)	1,728,000	0	0
Acquisition of treasury stock/cash paid for share repurchases	(67,305,000)	(19,109,000)	(1,969,000)
Proceeds from Initial Public Offering, net of underwriters' discount and commission	0	690,970,000	0
Payment of Initial Public Offering costs	0	(5,081,000)	0
Proceeds from financing obligations	4,202,000
Other financing activities	0	(40,000)	(2,815,000)
Net cash used in financing activities	(176,790,000)	(288,998,000)	(69,629,000)
Net increase (decrease) in cash and cash equivalents	3,058,000	(7,808,000)	2,990,000
Cash and cash equivalents at beginning of period	27,146,000	34,954,000	31,964,000
Cash and cash equivalents at end of period	30,204,000	27,146,000	34,954,000
Supplemental cash flow information:
Interest paid	96,861,000	152,882,000	152,178,000
Income taxes paid	40,351,000	15,845,000	14,820,000
Non-cash financing and investing activities:
Conversion of contingently redeemable common stock into common stock	0	13,202,000	0
Property additions included in accrued expenses	$ 11,247,000	$ 13,849,000	$ 19,405,000

Description of Business	12 Months Ended
Description of Business	Feb. 01, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Description of Business	Description of Business BJ’s Wholesale Club Holdings, Inc. and its wholly owned subsidiaries (the "Company" or "BJ’s") is a leading warehouse club operator in the eastern United States of America. As of February 1, 2020, BJ’s operated 217 warehouse clubs in 17 states. BJ’s business, in common with the business of retailers generally, is subject to seasonal influences. Sales and operating income have typically been strongest in the fourth quarter holiday season and lowest in the first quarter of each fiscal year. BJ's Wholesale Club, Inc., the primary operating subsidiary of the registrant, was previously an independent publicly traded corporation until its acquisition on September 30, 2011, by a subsidiary of Beacon Holding Inc., a company incorporated on June 24, 2011 by investment funds affiliated with or advised by CVC Capital Partners ("CVC") and Leonard Green & Partners, L.P. ("Leonard Green") (the "Sponsors") for the purpose of the acquisition. On February 23, 2018, Beacon Holding Inc. changed its name to BJ's Wholesale Club Holdings, Inc. On July 2, 2018, BJ's Wholesale Club Holdings, Inc. became a publicly traded entity in connection with its initial public offering ("IPO") of common stock and listing on the New York Stock Exchange ("NYSE") under the ticker symbol "BJ."

Summary of Significant Accounting Policies

12 Months Ended

Feb. 01, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The consolidated financial statements include the Company and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal year 2019 ("2019") consists of the 52 weeks ended February 1, 2020, fiscal year 2018 ("2018") consists of the 52 weeks ended February 2, 2019 and fiscal year 2017 ("2017") consists of the 53 weeks ended February 3, 2018.

Initial Public Offering and Secondary Offerings

On July 2, 2018, the Company completed its IPO, in which the Company issued and sold 43,125,000 shares of its common stock (including 5,625,000 shares of common stock that were subject to the underwriters’ option to purchase additional shares) at an initial public offering price of $17.00 per share. The Company received total aggregate proceeds of $685.9 million net of underwriters’ discounts, commissions and other transaction expenses, which totaled $47.2 million.

On July 2, 2018, the Company used the net proceeds from the IPO to extinguish the total outstanding balance of $623.3 million of its senior secured second lien term loan facility (the "Second Lien Term Loan"). See Note 6, Debt and Credit Arrangements, for further discussion regarding the Second Lien Term Loan extinguishment.

On October 1, 2018, certain selling stockholders completed the registered sale of 32,200,000 shares of the Company’s common stock at a public offering price of $26.00 per share. Of the 32,200,000 shares sold, 4,200,000 shares represented the underwriters’ exercise of their overallotment option. The Company did not receive any proceeds from this offering or incur underwriters’ discounts or commissions on the sale. The Company incurred transaction costs of $2.4 million primarily for legal, accounting and printer services related to the offering.

On March 11, 2019, certain selling stockholders completed a registered sale (the "March 2019 Secondary Offering") of 19,550,000 shares of the Company's common stock at a public offering price of $25.08 per share. Of the 19,550,000 shares sold, 2,550,000 shares represented the underwriters' exercise of their overallotment option. The Company did not receive any proceeds from the March 2019 Secondary Offering or incur underwriters' discounts or commissions on the sale. The Company incurred transaction costs of $1.2 million primarily for legal, accounting and printer services related to the March 2019 Secondary Offering.

On June 6, 2019, certain selling stockholders completed a registered sale (the "June 2019 Secondary Offering") of 17,500,000 shares of the Company's common stock at a public offering price of $24.65 per share. The Company did not receive any proceeds from the June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the June 2019 Secondary Offering.

On June 27, 2019, certain selling stockholders completed a registered sale (the "CVC June 2019 Secondary Offering") of 9,977,024 shares of the Company's common stock at a price of $25.41 per share. In connection with this offering, the Company repurchased 2,500,000 shares at $25.41 per share. The Company did not receive any proceeds from the CVC June 2019 Secondary Offering or incur underwriters’ discounts or commissions on the sale. The Company incurred immaterial transaction costs related to the CVC June 2019 Secondary Offering. Subsequent to the CVC June 2019 Secondary Offering, Leonard Green Partners sold its remaining shares through multiple open-market transactions.

As of February 1, 2020, the Sponsors, CVC and Leonard Green Partners no longer held any shares of the Company's common stock.

Stock Split

On June 15, 2018, the Company effected a seven-to-one stock split of its issued and outstanding shares of common stock and proportional adjustment to the existing conversion ratios for each series of the Company’s Contingently Redeemable Common Stock (see Note 10). Accordingly, all shares and per share amounts for all periods presented in the accompanying consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the contingently redeemable common stock conversion ratios.

Deferred Offering Costs

The Company capitalized certain legal, professional, accounting and other third-party fees that were directly associated with the July 2, 2018 IPO as deferred offering costs. Upon the consummation of the IPO, $47.2 million was recorded in stockholders’ deficit as a reduction of additional paid-in capital.

Estimates Included in Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and stockholders’ equity, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates relied upon in preparing these consolidated financial statements include, but are not limited to, revenue recognition; vendor rebates and allowances; estimating inventory reserves; estimating impairment assessments of goodwill, intangible assets, and other long-lived assets; estimating self-insurance reserves; estimating income taxes and equity-based compensation. Actual results could differ from those estimates.

Segment Reporting

The Company’s club retail operations, which represent substantially all of the Company’s consolidated total revenues, are the Company’s only reportable operating segment. All of the Company’s identifiable assets are located in the United States. The Company does not have significant sales outside the United States, nor does any customer represent more than 10% of total revenues for any period presented.

The following table summarizes the percentage of net sales by category:



	Fiscal Year
	2019 % of Total		2018 % of Total		2017 % of Total
Edible Grocery	24	%	24	%	24	%
Perishables	27	%	28	%	29	%
Non-Edible Grocery	21	%	21	%	21	%
General Merchandise	15	%	14	%	14	%
Gasoline & Other Ancillary Services	13	%	13	%	12	%

Concentration Risk

An adverse change in the Company’s relationships with its key suppliers could have a material effect on the business and results of operations of the Company. Currently, one distributor consolidates a substantial majority of perishables for shipment to the clubs. While the Company believes that such a consolidation is in its best interest overall, a prolonged disruption in logistics processes could materially impact sales and profitability for the near term.

All of the warehouse clubs are located in the eastern United States. Sales from the New York metropolitan area made up approximately 25% of net sales in 2019, 2018 and 2017.

Financial instruments that potentially subject the Company to concentrations of credit risk principally consist of cash held in financial institutions. The Company considers the credit risk associated with these financial instruments to be minimal. Cash is held by financial institutions with high credit ratings and the Company has not historically sustained any credit losses associated with its cash balances.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less at the time of purchase are considered to be cash equivalents. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable.

Accounts Receivable

Accounts receivable consists primarily of credit card receivables and receivables from vendors related to rebates and coupons and is stated net of allowances for doubtful accounts of $0.9 million at February 1, 2020 and February 2, 2019. The determination of the allowance for doubtful accounts is based on BJ’s historical experience applied to an aging of accounts and a review of individual accounts with a known potential for write-off.

Merchandise Inventories

Inventories are stated at the lower of cost, determined under the average cost method, or net realizable value. The Company recognizes the write-down of slow-moving or obsolete inventory in cost of sales when such write-downs are probable and estimable. The Company writes down inventory for estimated shrinkage for the period between physical inventories based on historical results of previous physical inventories, shrinkage trends or other judgments management believes to be reasonable under the circumstances.

Property and Equipment

Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method. Buildings and improvements are depreciated over estimated useful lives of 33 years. Interest related to the development of buildings is capitalized during the construction period. Leasehold costs and improvements are amortized over the remaining lease term (which includes renewal periods that are reasonably assured) or the asset’s estimated useful life, whichever is shorter. Furniture, fixtures and equipment are depreciated over estimated useful lives, ranging from three to ten years. Depreciation expense was $143.5 million in 2019, $140.4 million in 2018 and $138.0 million in 2017.

Certain costs incurred in connection with developing or obtaining computer software for internal use are capitalized. Capitalized software costs are included in furniture, fixtures, and equipment and are amortized on a straight-line basis over the estimated useful life of the software, which is three years. Software costs not meeting the criteria for capitalization are expensed as incurred.

Expenditures for betterments and major improvements that significantly enhance the value and increase the estimated useful life of the assets are capitalized and depreciated over the new estimated useful life. Repairs and maintenance costs on all assets are expensed as incurred.

Deferred Issuance Costs

The Company defers costs directly associated with acquiring third-party financing. Debt issuance costs related to the term loans are recorded as a direct deduction from the carrying amount of the debt and debt issuance costs associated with the ABL Facility (as defined in Note 5) are recorded within other assets. Debt issuance costs are amortized over the term of the related financing arrangements on a straight-line basis, which is materially consistent with the effective interest method. Amortization of deferred debt issuance costs is recorded in interest expense and was $2.7 million in 2019, $3.3 million in 2018 and $4.1 million in 2017.

Goodwill and Indefinite-Lived Intangible Assets

Goodwill and indefinite-lived trade name intangible assets are not subject to amortization. The Company assesses the recoverability of its goodwill and trade name annually in the fourth quarter or whenever events or changes in circumstances indicate it may be impaired. The Company has determined it has one reporting unit for goodwill impairment testing purposes.

The Company may assess its goodwill for impairment initially using a qualitative approach ("step zero") to determine whether conditions exist to indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. If management concludes, based on its assessment of relevant events, facts and circumstances that it is more likely than not that a reporting unit’s carrying value is greater than its fair value, then a quantitative analysis will be performed to determine if there is any impairment. The Company may also elect to initially perform a quantitative analysis instead of starting with step zero. The quantitative assessment for goodwill is a two-step assessment. "Step one" requires comparing the carrying value of a reporting unit, including goodwill, to its fair value. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and no further testing is required. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test is to measure the amount of impairment loss, if any. "Step two" compares the implied fair value of goodwill to the carrying amount of goodwill. The implied fair value of goodwill is determined by a hypothetical purchase price allocation using the reporting unit’s fair value as the purchase price. If the carrying amount of goodwill exceeds the implied fair value, an impairment charge is recorded to write down goodwill to its implied fair value and is recorded as a component of selling, general and administrative expense ("SG&A"). The Company assessed the recoverability of goodwill in fiscal years 2019, 2018 and 2017 and determined that there was no impairment.

The Company assesses the recoverability of its trade name whenever there are indicators of impairment, or at least annually in the fourth quarter. If the recorded carrying value of the trade name exceeds its estimated fair value, the Company records a charge to write the intangible asset down to its estimated fair value as a component of SG&A. The Company assessed the recoverability of the BJ’s trade name and determined that its estimated fair value exceeded its carrying value and that no impairment was necessary in fiscal years 2019, 2018 or 2017.

Impairment of Long-lived Assets

The Company reviews the realizability of long-lived assets periodically and whenever a triggering event occurs that indicates an impairment loss may have been incurred using fair value measurements with unobservable inputs (Level 3). Current and expected operating results and cash flows and other factors are considered in connection with management’s reviews. For purposes of evaluating the recoverability of long-lived assets, the recoverability test is performed using undiscounted net cash flows of individual clubs and consolidated net cash flows for long-lived assets not identifiable to individual clubs. Impairment losses are measured as the difference between the carrying amount and the estimated fair value of the assets being evaluated. In fiscal year 2019, the Company recorded $13.3 million of impairment charges to lower the carrying value of the assets to their estimated fair value. The total impairment charges consisted of $1.7 million related to IT assets, $2.0 million related to fixed assets and $9.6 million related to operating lease right of use ("ROU") assets. The fixed asset impairment charges and operating lease ROU asset impairment charges related to four club locations. The combined fixed assets and operating lease ROU asset carrying value of these four locations after the impairment charge was $10.5 million.

In fiscal year 2018, the Company recorded an impairment loss of $4.0 million on the fixed assets of one club to lower the carrying value of the fixed assets to their estimated fair value less cost to sell. No impairment charges were recorded in fiscal year 2017.

Asset Retirement Obligations

An asset retirement obligation represents a legal obligation associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction, development or normal operation of that long-lived asset. The Company recognizes asset retirement obligations in the period in which they are placed in service, if a reasonable estimate of fair value can be made. The asset retirement obligation is subsequently adjusted for changes in fair value. The associated estimated asset retirement costs are capitalized in leasehold improvements and depreciated over their useful life. The Company’s asset retirement obligations relate to the future removal of gasoline tanks and solar panels installed at leased clubs and the related assets associated with the gas stations and solar panel locations. See Note 15 for further information on the amounts accrued.

Self-Insurance Reserves

The Company is primarily self-insured for workers’ compensation, general liability claims and medical claims. Reported reserves for these claims are derived from estimated ultimate costs based upon individual claim file reserves and estimates for incurred but not reported claims. The Company carries stop-loss insurance on its workers’ compensation and general liability claims to mitigate its exposure to large claims.

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.

Merchandise sales—The Company recognizes sales of merchandise at clubs and gas stations when the customer takes possession of the goods and tenders payment. Sales of merchandise at the Company’s clubs and gas stations, excluding sales taxes, represented approximately 96% of the Company’s net sales and approximately 93% of the Company’s total revenues for fiscal year 2019. 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^® Mastercardcredit card holders to earn up to 5% cash back on eligible purchases made at BJ’s up to 2% cash back on purchases made with the card outside of BJ’s. Cash back is in the form of electronic awards issued in $20 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 $26.7 million at February 1, 2020 and $25.8 million at February 2, 2019.

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 credit card program was $14.8 million and $13.4 million at February 1, 2020 and February 2, 2019, respectively. The timing of revenue recognition of these awards is driven by actual customer activities, such as redemptions and expirations. At February 1, 2020, the Company expects to recognize $12.5 million of the deferred revenue in fiscal year 2020, and expects the remainder will 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 $144.0 million and $134.4 million at February 1, 2020 and February 2, 2019, respectively.

Gift Card Programs—The Company sells BJ’s gift cards that 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 upon redemption of the gift card because the Company’s performance obligation to redeem the gift card for merchandise is satisfied when the gift card is redeemed. Historically, the Company recognized breakage under the remote model, which recognizes breakage income when the likelihood of the customer exercising its remaining rights becomes remote. Under the current guidance, the Company recognizes breakage in proportion to its rate of gift card redemptions. This change in breakage recognition model had an immaterial impact on the Company’s results of operations for fiscal years 2019 and 2018. Deferred revenue related to gift cards was $10.3 million and $9.1 million at February 1, 2020 and February 2, 2019, respectively. The Company recognized approximately $49.1 million and $50.0 million of revenue from gift card redemptions in the fiscal years ended February 1, 2020 and February 2, 2019, respectively.

Warranty Programs

The Company passes on any manufacturers’ warranties to members. In addition, BJ’s includes an extended warranty on tires sold at the clubs, under which BJ’s customers receive tire repair services or tire replacement in certain circumstances. This warranty is included in the sale price of the tire and it cannot be declined by the customers. The Company is fully liable for claims under the tire warranty program. As the primary obligor in these arrangements, associated revenue is recognized on the date of sale and an estimated warranty obligation is accrued based on claims experience. The liability for future claims under this program is not material to the financial statements.

Extended warranties are also offered on certain types of products such as appliances, electronics and jewelry. These warranties are provided by a third party at fixed prices to BJ’s. No liability is retained to satisfy warranty claims under these arrangements. The Company is not the primary obligor under these warranties, and as such net revenue is recorded on these arrangements at the time of sale. Revenue from warranty sales is included in net sales on the income statement.

Determine the Transaction Price

The transaction price is the amount of consideration the Company expects to receive under the arrangement. The Company is required to estimate variable consideration (if any) and to factor that estimate into the determination of the transaction price. The Company may offer sales incentives to customers, including discounts. The Company has significant experience with return patterns and relies on this experience to estimate expected returns when determining the transaction price.

Returns and Refunds—The Company’s products are generally sold with a right of return and may provide other credits or incentives, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The Company records an allowance for returns based on current period revenues and historical returns experience. The Company analyzes actual historical returns, current economic trends and changes in sales volume and acceptance of the Company’s products when evaluating the adequacy of the sales returns allowance in any accounting period.

The sales returns reserve, which reduces sales and cost of sales for the estimated impact of returns, was $6.5 million in 2019, $6.8 million in 2018 and $1.5 million in 2017.

Customer Discounts—Discounts given to customers are usually in the form of coupons and instant markdowns and are recognized as redeemed and recorded in contra revenue accounts, as they are part of the transaction price of the merchandise sale. Manufacturer coupons that are available for redemption at all retailers are not reduced from the sale price of merchandise.

Agent Relationships

The Company enters into certain agreements with service providers that offer goods and services to the Company’s members. These service providers sell goods and services including home improvement services and cell phones to the Company’s customers. In exchange, the Company receives payments in the form of commissions and other fees. The Company evaluates the relevant criteria to determine whether they serve as the principal or agent in these contracts with customers, in determining whether it is appropriate in these arrangements to record the gross amount of merchandise sales and related costs, or the net amount earned as commissions. When the Company is considered the principal in a transaction, revenue is recorded gross; otherwise, revenue is recorded on a net basis. Commissions received from these service providers are considered variable consideration and are constrained until the third-party customer makes a purchase from one of the service providers.

Significant Judgments

Standalone Selling Prices—For arrangements that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation on a relative standalone selling price basis.

Policy Elections

In addition to those previously disclosed, the Company has made the following accounting policy elections and practical expedients:

Portfolio Approach—The Company uses the portfolio approach when multiple contracts or performance obligations are involved in the determination of revenue recognition.

Taxes—The Company excludes from the transaction price any taxes collected from customers that are remitted to taxing authorities.

Shipping and Handling Charges—Charges that are incurred before and after the customer obtains control of goods are deemed to be fulfillment costs.

Time Value of Money—The Company’s payment terms are less than one year from the transfer of goods. Therefore, the Company does not adjust promised amounts of consideration for the effects of the time value of money.

Disclosure of Remaining Performance Obligations—The Company does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations for contracts that are one year or less in term. Additionally, the Company does not disclose the aggregate amount of the transaction price allocated to remaining performance obligations when the transaction price is allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied promise to transfer a good or service that forms part of a series of distinct goods or services.

Cost of Sales

The Company’s cost of sales includes the direct costs of sold merchandise, which includes customs, taxes, duties and inbound shipping costs, inventory shrinkage and adjustments and reserves for excess, aged and obsolete inventory. Cost of goods sold also includes certain distribution center costs and allocations of certain indirect costs, such as occupancy, depreciation, amortization, labor and benefits.

Presentation of Sales Tax Collected from Customers and Remitted to Governmental Authorities

In the ordinary course of business, sales tax is collected on items purchased by the members that are taxable in the jurisdictions when the purchases take place. These taxes are then remitted to the appropriate taxing authority. These taxes collected are excluded from revenues in the financial statements.

Vendor Rebates and Allowances

The Company receives various types of cash consideration from vendors, principally in the form of rebates, based on purchasing or selling certain volumes of product, time-based rebates or allowances, which may include product placement allowances or exclusivity arrangements covering a predetermined period of time, price protection rebates and allowances for retail price reductions on certain merchandise and salvage allowances for product that is damaged, defective or becomes out-of-date.

Such vendor rebates and allowances are recognized based on a systematic and rational allocation of the cash consideration offered to the underlying transaction that results in progress by BJ’s toward earning the rebates and allowances, provided the amounts to be earned are probable and reasonably estimable. Otherwise, rebates and allowances are recognized only when predetermined milestones are met. The Company recognizes product placement allowances as a reduction of cost of sales in the period in which the product placement is completed. Time-based rebates or allowances are recognized as a reduction of cost of sales over the performance period on a straight-line basis. All other vendor rebates and allowances are recognized as a reduction of cost of sales when the merchandise is sold or otherwise disposed.

Cash consideration is also received for advertising products in publications sent to BJ’s members. Such cash consideration is recognized as a reduction of SG&A to the extent it represents a reimbursement of specific, incremental and identifiable SG&A costs incurred by BJ’s to sell the vendors’ products. If the cash consideration exceeds the costs being reimbursed, the excess is characterized as a reduction of cost of sales. Cash consideration for advertising vendors’ products is recognized in the period in which the advertising takes place.

Manufacturers’ Incentives Tendered by Consumers

Consideration from manufacturers’ incentives (such as rebates or coupons) is recorded gross in net sales when the incentive is generic and can be tendered by a consumer at any reseller and the Company receives direct reimbursement from the manufacturer, or clearinghouse authorized by the manufacturer, based on the face value of the incentive. If these conditions are not met, such consideration is recorded as a decrease in cost of sales.

Leases

In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-2, Leases (FASB Accounting Standards Codification ("ASC") Topic 842, Leases) which requires recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet.

The Company adopted ASC 842 using the modified retrospective method at the beginning of fiscal year 2019. In accordance with ASC 842, the Company did not recast comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of $2.040 billion of operating lease right-of-use ("ROU") assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the ROU assets. Finance leases were not impacted by the adoption of the new guidance as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not have a material impact on the Company’s annual audited consolidated statements of operations and comprehensive income, statements of contingently redeemable common stock and stockholders’ deficit or cash flows, and had a $11.6 million impact on beginning retained earnings in fiscal year 2019 primarily associated with the impact of the Company's deferred gain on prior years' sale leaseback transactions, net of tax. The Company elected the transition package of practical expedients permitted within the new standard which, among other things, allowed it to carry-forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of ROU assets and therefore continued to utilize lease terms determined under previous lease guidance.

Pre-opening Expenses

Pre-opening expenses consist of direct incremental costs of opening or relocating a facility and are expensed as incurred.

Advertising Costs

Advertising costs generally consist of efforts to acquire new members and typically include media advertising (some of which is vendor-funded). BJ’s expenses advertising as incurred as a component of SG&A. Advertising expenses were approximately 0.6%, 0.7% and 0.6% of net sales in 2019, 2018 and 2017, respectively.

Stock-Based Compensation

The fair value of service-based employee awards is recognized as compensation expense on a straight-line basis over the requisite service period of the award. The fair value of the performance-based awards is recognized as compensation expense ratably over the service period of each performance tranche. The fair value of the stock-based awards is determined using the Black-Scholes option pricing model. Determining the fair value of options at the grant date requires judgment, including estimating the expected term that stock options will be outstanding prior to exercise and the associated volatility.

Prior to the consummation of the IPO on June 28, 2018, the estimated fair value of the Company's stock was determined by its board of directors, with input from management and considering third-party valuations of common stock. Subsequent to the IPO date, the Company's common stock was listed on the NYSE and its value is determined by the market price on the NYSE. See our Note 11 for additional description of the accounting for stock-based awards.

Earnings Per Share

Basic net income per share attributable to common stockholders is calculated by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period, including contingently redeemable common stock recorded outside of stockholders’ equity. Basic income from continuing operations per share attributable to common stockholders is calculated by dividing income from continuing operations available to common stockholders by the weighted average number of common shares outstanding for the period, including contingently redeemable common stock recorded outside of stockholders’ equity. Basic loss from discontinuing operations per share attributable to common stockholders is calculated by dividing loss from discontinuing operations available to common stockholders by the weighted average number of common shares outstanding for the period, including contingently redeemable common stock recorded outside of stockholders’ equity.

Diluted net income per share attributable to common stockholders is calculated by dividing net income available to common stockholders by the diluted weighted average number of common shares outstanding for the period. Diluted income from continuing operations per share attributable to common stockholders is calculated by dividing income from continuing operations available to common stockholders by the diluted weighted average number of common shares outstanding for the period. Diluted loss from discontinuing operations per share attributable to common stockholders is calculated by dividing loss from discontinuing operations available to common stockholders by the diluted weighted average number of common shares outstanding for the period.

Income Taxes

The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying values and their respective tax bases, using enacted tax rates expected to be applicable in the years in which the temporary differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that all or a portion of the deferred tax assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected, scheduling of anticipated reversals of taxable temporary differences, and considering prudent and feasible tax planning strategies.

The Company records liabilities for uncertain income tax positions based on a two-step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have less than a 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the period in which such changes occur.

Any interest or penalties incurred related to unrecognized tax benefits are recorded as a component of the provision for income tax expense.

Derivative Financial Instruments

All derivatives are recognized as either assets or liabilities on the consolidated balance sheet and measurement of these instruments is at fair value. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive income and are recognized in the consolidated statement of operations when the hedged item affects earnings. Any portion of the change in fair value that is determined to be ineffective is immediately recognized in earnings as SG&A. Derivative gains or losses included in accumulated other comprehensive income are reclassified into earnings at the time the hedged transaction occurs as a component of SG&A.

Fair Value of Financial Instruments

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

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


•	Level 1, quoted market prices in active markets for identical assets or liabilities.


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


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

Comprehensive Income

Comprehensive income is a measure of net income and all other changes in equity that result from transactions other than with equity holders, and would normally be recorded in the consolidated statements of stockholders’ equity and the consolidated statements of comprehensive income. Other comprehensive income consists of unrealized gains and losses from derivative instruments designated as cash flow hedges, and postretirement medical plan adjustments.

Recently Adopted Accounting Pronouncements

Leases (ASU 2016-2)

In February 2016, the FASB issued ASU 2016-2, Leases (FASB ASC Topic 842, Leases) which requires recognition on the balance sheet for the rights and obligations created by leases with terms greater than twelve months. Consistent with prior GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend primarily on its classification as a finance or operating lease. However, unlike prior GAAP—which required only finance (formerly capital) leases to be recognized on the balance sheet—the new ASU requires both types of leases to be recognized on the balance sheet.

The Company adopted ASC 842 using the modified retrospective method at the beginning of fiscal year 2019. In accordance with ASC 842, the Company did not recast comparative periods in transition to ASC 842 and instead reported comparative periods under ASC 840. Adoption of the standard resulted in the initial recognition of $2.040 billion of operating lease ROU assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the ROU assets. Finance leases were not impacted by the adoption of the new guidance as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not have a material impact on the Company’s annual audited consolidated statements of operations and comprehensive income, statements of contingently redeemable common stock and stockholders’ deficit or cash flows, and had a $11.6 million impact on beginning retained earnings in fiscal year 2019 primarily associated with the impact of the Company's deferred gain on prior years' sale leaseback transactions, net of tax. The Company elected the transition package of practical expedients permitted within the new standard which, among other things, allowed it to carry-forward the historical lease classification. The Company did not elect the practical expedient to use hindsight in determining the lease term and in assessing impairment of ROU assets and therefore continued to utilize lease terms determined under previous lease guidance.

Please refer to Note 4 for further discussion on the Company's leases.

Non-Employee Share-Based Compensation (ASU 2018-07)

In June 2018, the FASB issued ASU 2018-07, Improvements to Non-employee Share-Based Payment Accounting, which updates the guidance to Compensation—Stock Compensation (Topic 718). The updated guidance aligns the measurement and classification guidance for share-based payments to non-employees with the guidance for share-based payments to employees, with certain exceptions. The Company adopted ASU 2018-07 at the beginning of fiscal year 2019 and the adoption of this standard did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements

Income Taxes (ASU 2019-12)

In December 2019, the FASB issued 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 ASC 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, 2021. Early adoption is permitted. The Company is currently evaluating the effect that implementation of this standard will have on the Company's consolidated financial statements.

Fair Value Measurement (ASU 2018-13)

In August 2018, the FASB issued ASU 2018-13, Changes to the Disclosure Requirements for Fair Value Measurement, which updates the guidance to Fair Value Measurement (Topic 820). The updated guidance modifies the disclosure requirements for fair value measurements by removing, modifying or adding certain disclosures. The updated guidance is effective for fiscal periods beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company does not believe adoption of this standard will have a material impact on the Company's consolidated financial statements.

Goodwill Impairment (ASU 2017-04)

In January 2017, the FASB issued ASU 2017-04. ASU 2017-04 provides amendments to ASC 350, "Intangibles - Goodwill and Other", which eliminate Step 2 from the goodwill impairment test. Entities should perform their goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value. The amendments in this update are effective prospectively during interim and annual periods beginning after December 15, 2019, with early adoption permitted. The Company does not believe adoption of this standard will have a material impact on the Company's consolidated financial statements.

Intangibles-Goodwill and Other-Internal-Use Software (ASU 2018-15)

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40). The update related to accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The update allows entities who are customers in hosting arrangements that are service contracts to apply the existing internal-use software guidance to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. The update specifies classification for capitalizing implementation costs and related amortization expense within the financial statements and requires additional disclosures. The updated guidance is effective for fiscal reporting periods, including interim reporting within those periods, beginning after December 15, 2019. Early adoption is permitted and can be applied either retrospectively or prospectively. The Company adopted this standard on February 2, 2020 on a prospective basis. The adoption of this standard had no material impact on the Company's consolidated financial statements.

Credit Losses (ASU 2016-13)

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 will replace the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, an entity will recognize a loss (or allowance) upon initial recognition of the asset that reflects all future events that will lead to a loss being realized, regardless of whether it is probable that the future event will occur. The "incurred loss" model considers past events and current conditions, while the "expected loss" model includes expectations for the future which have yet to occur. ASU 2016-13 is effective for public companies for fiscal years beginning after December 15, 2019 with early adoption permitted for fiscal years beginning after December 15, 2018, including interim periods therein. The adoption of this standard will not have a material impact on the Company's consolidated financial statements.

Related Party Transactions	12 Months Ended
Related Party Transactions	Feb. 01, 2020
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions Management Agreement The Company had a management services agreement with the Sponsors for ongoing consulting and advisory services that terminated upon consummation of the Company's IPO. The management services agreement provided for the aggregate payment of management fees to the Sponsors (or advisory affiliates thereof) of $8.0 million per year, plus out of pocket expenses. The Company incurred no management fees and out of pocket expenses in fiscal year 2019, and $3.3 million and $8.0 million in fiscal years 2018 and 2017, respectively. Management fees and expenses are reported in SG&A in the consolidated statements of operations and comprehensive income. Other Relationships One of the Company’s suppliers, Advantage Solutions Inc., is controlled by affiliates of the Sponsors. Advantage Solutions Inc. is principally a provider of in-club product demonstration and sampling services, and the Company also engages them from time to time to provide ancillary support services, including for example, seasonal gift wrapping, on-floor sales assistance and display maintenance. The Company incurred approximately $42.6 million, $43.9 million and $44.8 million of costs payable to Advantage Solutions for services rendered during fiscal years 2019, 2018 and 2017, respectively. The demonstration and sampling service fees are fully funded by merchandise vendors who participate in the program. The Company believes the terms obtained or consideration paid or received, as applicable, in connection with the transactions were comparable to terms available or amounts that would be paid or received, as applicable, in arms’-length transactions with unrelated parties.

Leases

12 Months Ended

Feb. 01, 2020

Leases [Abstract]

Leases

The Company adopted ASC 842 as of February 3, 2019, using the modified retrospective method and applying transitional relief allowing entities to initially apply the requirements at the adoption date by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, results and disclosures for the reporting periods beginning on February 3, 2019 are reported and presented under ASC 842, while prior period amounts and disclosures are not adjusted and continue to be reported and presented under ASC 840.

As part of the adoption, the Company elected the following practical expedients:

1. A package of practical expedients allowing the Company to: a) carry forward its historical lease classification; b) avoid reassessing whether any expired or existing contracts are or contain leases; and c) avoid reassessing initial direct costs for any existing leases.

2. A practical expedient related to land easements, allowing the Company to carry forward the accounting treatment for land easements on existing agreements and eliminating the need to reassess existing lease contracts to determine if land easements are separate leases under ASC 842.

The Company did not elect the following practical expedients:

1. A practical expedient that would allow the Company to use hindsight in determining the lease term and to assess impairment of the entity's ROU assets, since election of this expedient could make adoption more complex given that re-evaluation of the lease term.

2. A practical expedient allowing the Company to not separate lease components from nonlease components (e.g., common area maintenance costs) since currently the Company does not combine lease and nonlease components for any of its real estate leases.

In accordance with ASC 842, the Company determines if an arrangement is a lease at inception or modification of a contract and classifies each lease as either an operating or finance lease at commencement. The Company only reassesses lease classification subsequent to commencement upon a change to the expected lease term or the contract being modified. The Company has operating and finance leases for the Company's clubs, and operating leases for the Company's distribution centers, corporate office, and stand-alone gas stations. Operating leases, net of accumulated amortization, are included in operating lease ROU assets, and current and non-current operating lease liabilities, on the consolidated balance sheet. Finance leases are included in property and equipment, accrued expenses and other current liabilities, and other non-current liabilities on the consolidated balance sheets. Lease liabilities are calculated using the effective interest method, regardless of classification, while the amortization of the ROU assets varies depending upon classification. Finance lease classification results in a front-loaded expense recognition pattern over the lease term, which amortizes the ROU asset by recognizing interest expense and amortization expense as separate components of lease expense and calculates the amortization expense component on a straight-line basis. Conversely, operating lease classification results in a straight-line expense recognition pattern over the lease term and recognizes lease expense as a single expense component, which results in amortization of the ROU asset that equals the difference between lease expense and interest expense. Lease expense for finance and operating leases are included in selling general and administrative expense on the consolidated statement of operations and comprehensive income. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

The Company is generally obligated for the cost of property taxes, insurance, and maintenance relating to its leases, which are often variable lease payments. Such costs are presented as occupancy costs for finance and operating leases included in SG&A expense on the consolidated statement of operations and comprehensive income.

Certain of the Company's lease agreements provide for lease payments based on future sales volumes at the leased location, or include rental payments adjusted periodically for inflation or based on an index, which are not measurable at the inception of the lease. The Company expenses such variable amounts in the period incurred, which is the period in which it becomes probable that the specified target that triggers the variable lease payments will be achieved. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

ROU assets represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the reasonably certain lease term. The operating lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Where the Company's leases do not provide an implicit rate, the Company uses a collateralized incremental borrowing rate ("IBR") to determine the present value of lease payments. The collateralized IBR is based on a synthetic credit rating that is externally prepared on an annual basis at the measurement date, and that the Company adjusts quarterly with a yield curve that approximates the Company's market risk profile.

In calculating the present value of the lease payments, the Company has elected to utilize its estimated IBR based on the original lease term and not the remaining lease term. The initial primary term of the Company's operating leases ranges from 5 to 44 years, with most of these leases having an initial term of 20 years. The initial primary term of the Company's two finance leases are 20 years.

The adoption of ASC 842 resulted in the initial recognition of $2.040 billion of operating lease ROU assets and $2.071 billion of operating lease liabilities as of February 3, 2019. The difference between the assets and liabilities is attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the right-of-use assets. The Company derecognized assets and liabilities of $94.7 million and $125.8 million, respectively, in connection with the non-cash transitional adjustment. As a result of adopting ASC 842, the Company also recorded a benefit to retained earnings of $11.6 million, primarily associated with the net of tax impact of the Company's deferred gain on prior years' sale leaseback transactions. Finance leases were not impacted by the adoption of the new guidance, as finance lease liabilities and the corresponding assets were recorded on the consolidated balance sheet under the previous guidance. The adoption of this standard did not materially impact the Company's consolidated statements of operations and comprehensive income, or the Company's consolidated statements of cash flows.

As of February 1, 2020, assets recorded under finance leases were $19.3 million and accumulated amortization associated with finance leases was $9.5 million, while ROU assets recorded as operating leases were $2.209 billion and accumulated amortization associated with operating leases was $148.7 million. As of February 1, 2020, the Company also recorded non-cash increases of $176.2 million to ROU assets and liabilities resulting from lease reassessments and decreases of $9.6 million to ROU assets resulting from lease impairment charges.

The following table is a summary of the Company’s components of total lease costs for the year ended February 1, 2020 (in thousands):



	February 1, 2020
Operating lease cost	$	322,346
Finance lease cost:
Amortization of right-of-use assets	1,128
Interest on lease liabilities	2,503
Total finance lease costs	3,631
Variable lease costs	98
Net lease costs	$	326,075

The weighted average remaining lease term and weighted average discount rate for operating and finance leases as of February 1, 2020 were as follows:



	Operating Leases		Finance Leases
Weighted average remaining lease term in years	8.6		9.3
Weighted average discount rate percentage	8.2	%	8.3	%

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):



Operating cash flows paid for operating leases	$	311,971
Operating cash flows paid for interest portion of finance leases	2,503
Financing cash flows paid for principal portion of finance leases	612

Future lease commitments to be paid by the Company as of February 1, 2020 were as follows (in thousands):



Fiscal year	Operating Leases			Finance Leases
2020	$	319,628		$	3,412
2021	319,632			3,439
2022	310,109			3,439
2023	296,508			3,439
2024	274,258			3,439
Thereafter	1,943,641			16,842
Total future minimum lease payments	3,463,776			34,010
Less: imputed interest	(1,353,236		)	(17,795		)
Present value of lease liabilities	$	2,110,540		$	16,215

As of February 1, 2020, the Company had certain executed real estate and gas station leases that have not yet commenced and therefore are not reflected in the tables above. These leases are expected to commence between fiscal year 2020 and fiscal year 2021 with lease terms ranging from 13 years to 20 years.

The following table represents the Company's lease commitments under its previous presentation of its operating and finance lease agreements as of February 2, 2019 (in thousands):



Fiscal Year	Operating Leases		Finance Leases
2019	$	309,785	$	4,510
2020	310,956		4,807
2021	299,410		4,833
2022	282,841		4,894
2023	264,363		4,956
Thereafter	1,778,207		34,377
Total	$	3,245,562	$	58,377