Hello everyone, and welcome to BJ's Wholesale Club Holdings, Inc.'s second quarter fiscal 2024 earnings conference call. My name is Kiki, and I will be coordinating your call today. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question, please press star followed by one on your telephone keypad. If you change your mind, please press star followed by two. I now pass the call over to your host, Katie Park. Please go ahead. Good morning, and welcome to BJ's second quarter fiscal 2024 earnings call. With me today are Bob Eddy, Chairman and Chief Executive Officer, Laura Felice, Chief Financial Officer, and Bill Warner, Executive Vice President, Strategy and Development. Please remember that during this call, we may make forward-looking statements within the meaning of the federal securities laws. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially from our expectations described on this call. Please see the Risk Factor sections of our most recent Form 10-K and Form 10-Q filed with the SEC for a description of those risks and uncertainties. Finally, please note that on today's call, we will refer to certain non-GAAP financial measures that we believe will provide useful information for investors. The presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Please refer to today's press release and latest investor presentation posted on our investor relations website for a reconciliation of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP. And now I'll turn the call over to Bob. Good morning. Thank you for joining us today. Our second quarter results demonstrate the power of our business model and our unrelenting focus on delivering value, especially at a time when members need it most. We drove quarterly comps and profits that were higher than anticipated, while making considerable investments in long-term initiatives that we believe will drive our business. For the tenth consecutive quarter, we drove traffic gains in our business. We also grew market share inside our clubs and at the gas pumps. Those short-term gains are great, but we're playing a long game, and we're also seeing striking progress in our long-term initiatives. Perhaps the greatest marker of long-term progress is our 9% growth in membership fees. This is driven by the largest member count growth in a quarter since the pandemic. We also saw great growth in premium tier memberships and strong renewal rates. Our digital business continues to grow in incredible fashion, positioning us for the future. Further, our real estate pipeline is growing faster than it has in years. These investments are heavy today, but in the years ahead, we will be thrilled that we made them. Comparable club sales, excluding gas sales, grew by 2.4% in the second quarter. Our compelling value proposition led to accelerating traffic in the quarter that contributed four percentage points to our comp. We believe our members are rewarding us for our merchandising improvements and amazing value. As a result, we gained grocery market share in both units and dollars in the quarter. We gained share at our gas stations, too, with 5% comp gallon growth in the second quarter. Our gas performance compares to the single-digit declines currently being reported by the broader industry. Our perishables, grocery, and sundries division delivered close to 3% comp growth in the second quarter as more and more members rely on BJ's for their household essentials, and more often, too. Our perishables business continued to lead this growth, and we're pleased that our work to strengthen our perishables offering is delivering results. We saw broad-based growth across this division, anchored by fresh produce, dairy, and meat. Our general merchandise business improved sequentially from the first quarter and delivered comp growth of over 1% in the second quarter. Our seasonal GM comps improved dramatically from the first quarter, increasing over 1000 basis points sequentially. Better weather, coupled with great value, led to favorable seasonal appliance sales in the quarter. It's worth noting that members remained discerning in their purchasing behavior, which was evident in big-ticket seasonal categories such as patio sets and structures. Nonetheless, our members are spending with us, recognizing the enhancements in the value and quality of our GM offering. Our assortment gets more and more exciting each quarter, and we are presenting it in the right way, at the right time, and at the right price. We believe our treasure hunt is gaining traction. Our apparel, consumer electronics, and home categories all performed well in the second quarter, with positive comps similar to those seen in the first quarter. Apparel is an area we are extremely proud of. Our work in this category continues to pay off, with high single-digit comp growth in the quarter, led by increases in both unit volumes and AUR. We believe the combination of an elevated assortment, compelling value, clean presentation, and powerful marketing is driving our success in the category. Our home business also delivered strong unit volumes despite the choppy consumer environment. In consumer electronics, we continue to win with televisions and audio categories, producing double-digit unit growth year over year. For BJ's, our consumables offering is the driver of trips today. Moving forward, we see general merchandise also inspiring the shop, driving incremental trips and expanding members' baskets. Naturally, as members spend and trips grow, we expect this behavior to strengthen loyalty and membership renewals. This is why improving general merchandise is a significant opportunity for the long-term growth of this company. Our general merchandise performance this quarter is a testament to the progress we continue to make in our GM transformation efforts. I'm confident that we have the right team in place to realize the significant potential we see in this division. Our four strategic priorities are critical to our long-term success. As a reminder, these priorities are improving member loyalty, giving our members an unbeatable shopping experience, delivering value conveniently, and growing our footprint. We are making meaningful strides in each of these areas. Our membership momentum is strong and growing. Our continued success in growing both the size and quality of the membership resulted in another robust membership fee income quarter, with 9.1% year-over-year growth in the second quarter. Member counts grew both on a year-over-year and sequential basis. Even better, our comp clubs contributed about two-thirds of that member growth. It's promising to see that we are expanding our member base organically in our existing markets through both renewals and effective acquisition efforts. This, combined with the benefit of new clubs, drove the largest overall member growth in any quarter since the pandemic year in fiscal 2020. We expect to reach our next membership milestone of 7.5 million members in the back half of the year. In the second quarter, we improved our higher-tier membership penetration to 39%, led by continued double-digit year-over-year growth in our highest One+ tier. One+ members pay the premium $110 fee and hold our co-brand credit card. These are our most loyal and highest spending members, exhibiting the greatest lifetime value. Moreover, growth in our co-brand member base has translated to even greater growth in total credit card spend. This suggests that our members are having a great experience with the new program. We will remain focused on maintaining our strength in membership to drive long-term value for both our members and shareholders. A great shopping experience leads to repeat trips, greater wallet share, and better loyalty. This is why we continually strive to enhance the member experience through improvements in our merchandising, digital, and in-club conveniences, all while we aim to deliver unbeatable value. At this point on our last call, we delved into our fresh initiatives, including Fresh 2.0. Recall that our work was built on member insights, along with our desire to cement BJ's as the weekly destination for our members' shopping needs. When we win our members' produce and meat shop, we win their first shop of the week, thereby increasing trips and spend, and resulting in more loyal members over time. Through our fresh initiatives, we worked hard over the past year to bring excitement and even more freshness to our produce offering. With full control over our perishable distribution centers, we improved supply chain velocity where it mattered. We expanded vendor relationships to increase in-stocks and put new seasonally relevant produce on rotation. We implemented essential fresh training across our clubs. We upgraded our marketing and presentation. By the end of July, we completed the rollout of our standalone coolers stationed at our front entrances, so that our members are captivated by our high-quality, low-priced, seasonal produce as soon as they arrive in our clubs. As we assess our second quarter results, it's clear that we are increasingly gaining our members' trust for their fresh groceries. In fact, our produce category has delivered low double-digit comp growth in the second quarter, almost entirely driven by unit volumes. What's even more encouraging is that we drove over 90 basis points of year-over-year growth in produce transaction penetration as well. While still early, we are thrilled with how our members are responding to our efforts, and we're excited about what this could mean for member loyalty over the long term. The structural benefits of our club model allow us to regularly invest in value proposition. As such, our pricing position remains strong. In addition to our inherent advantages, we continue to execute on our category management process, or CMP, across the business. CMP is a muscle that we've worked to build over the years, but our latest iteration is far more comprehensive in approach and, crucially, built on our members' feedback. As part of this process, we are fine-tuning our assortment to drive better member engagement and share of wallet while optimizing our costs. This affords us the flexibility to deliver value to our members in a number of ways. For example, while inflation has moderated this year, consumers are still digesting prices that are significantly higher than they were two years ago. In recent months, the cost of some key dairy and protein articles is climbing once again. These frequently purchased items, such as milk and eggs, are putting outsized pressure on members' baskets. We have invested considerably in order to help our members make their baskets work within the confines of their budgets. Investing in value is part of our DNA and what our members expect from BJ's. These investments may pressure our short-term results, but will power our business in the future. Our accelerating traffic and units in the second quarter tell us we're making the right decisions to take care of the families who depend on us and deliver growth longer term. Our own brands, Wellsley Farms and Berkley Jensen, continue to provide members with high-quality products at substantial value. Over 95% of our own brands' products earn ratings of four out of five stars or more, demonstrating the rigor in which our teams ensure that we have the best combination of assortment, quality, and price, which is consistently a significant value to the comparable national brand. We recently relaunched our Wellsley Farms Snack Nuts program, and our cashews have earned 4.9 stars. Our new Berkley Jensen food storage bags have also received glowing reviews, with top-selling products earning 4.8 stars... We're growing our own brand's sales penetration each quarter and remain confident in our goal of reaching 30% in the future. We work hard to save our members time in addition to money. Our digital capabilities continue to deliver these savings to our members in a way that is convenient for them. Our convenience offerings include buy online, pickup in club, curbside pickup, and same-day delivery. In-club shoppers can also leverage our digital coupon gallery and skip the lines with ExpressP ay checkout. Our digital business was basically non-existent five years ago, and we've grown by leaps and bounds since then, making up about 12% of our merchandise sales today. Our momentum continued in the second quarter with digitally enabled comp sales up 22% year over year. We believe our digital conveniences are only getting better from here. In the second quarter, we launched our product location capabilities on our app. We like a treasure hunt, but can now spare our members the scavenger hunt. This is one of the various enhancements enabled by our autonomous inventory robots, which are also driving labor efficiencies in our digital order fulfillment process. We will continue to lean into our digital capabilities to deliver even more value and convenience to our members. Finally, our real estate strategy is progressing well, and we remain on track to deliver on our new clubs opening in the back half of the fiscal year. We recently opened membership centers in Palm Coast, Florida and Carmel, Indiana, at the start of a stretch that will see us open 11 new clubs in the next six months. Our new club program continues to drive success for our company and value to the communities we have the pleasure to serve. Just one statistic to put a fine point on why we've been working on this so hard. The new clubs that we have opened since our IPO delivered comp sales growth of more than three times the chain average for the second quarter. Finally, we continue to grow our pipeline to enable even more accelerated growth of new clubs. The health of the consumer remains top of mind for many. From our vantage point, members remain value-focused in their purchasing behavior, and they are seeking us out to attain that. We believe we have a winning business model in any economic backdrop, but it is especially relevant in times when consumers prioritize value. Spend per shopper remains very healthy at higher income levels and continues to improve at the lower end, especially as we've moved past the tougher laps related to government aid in the second quarter. Critically, in the quarter, we drove greater trip frequency and overall spend growth across high, mid, and low-income levels. This continues to illustrate that our strong value prop is resonating with our entire member base, regardless of their financial standing. We're pleased with how our members are engaging with us today, but we also recognize the building uncertainty in macroeconomic and geopolitical factors in the near term. These dynamics and their impact on consumer demand are beyond our control, but we will remain focused on what we do best. That's bringing great value to our members. Looking past the near term, we are confident in our ability to grow the business, reinforced by strong membership, traffic, and unit volumes. As I stated before, these are key markers of the underlying strength of our company. Furthermore, we believe the operating model, deep focus on our strategic priorities, and unwavering dedication to delivering value will keep us well positioned for long-term success. I'd like to close with my gratitude for our team members who go to great lengths daily to take care of the families who depend on us. As I do every quarter, I'd like to say to all of our team members, thank you again for all your hard work. I'll now turn it over to Laura to provide more details on our results and outlook for the year. Thanks, Bob. I'd like to echo Bob's gratitude for our amazing team members across our clubs, support center, and distribution centers, whose dedication to our company and communities contributed to another strong quarter. Let's now review our second quarter results. Net sales in the quarter were approximately $5.1 billion, growing 4.8% over the prior year. Total comparable club sales in the second quarter, including gas sales, grew 3.1% year over year, led by gallons sold. Merchandise comp sales, which exclude gas sales, increased by 2.4% year over year and by 3.5% on a two-year stack. We were pleased to deliver accelerating traffic and unit growth in the quarter. Inflation was nearly flat for the quarter. Our second quarter comp in grocery, perishables, and sundries division grew nearly 3% year over year, underpinned by growth in comp units, which outpaced the broader market. Our general merchandise and services division comp increased slightly in the second quarter, with general merchandise outperforming the rest of the divisions in this calculation. Digitally enabled comp sales in the second quarter grew 22% year over year and 37% on a two-year stack. Over 90% of our digital sales are fulfilled by our clubs with services like buy online, pickup in club or BOPIC, and same-day delivery, which remain meaningful drivers of our digital growth. In fact, BOPIC alone comprises about half of our digital sales today. Our digital offering is intended to deliver value by maximizing convenience. Members who leverage our digital convenience save time with an easier shopping experience, and thus become more loyal members. We will continue leaning into these mutually beneficial enhancements in the future. Membership fee income, or MFI, grew 9.1% to approximately $113.1 million in the second quarter, driven by strong membership acquisition and retention across the chain. We are especially pleased with the performance of our comp clubs, whose growth in new member sign-ups and renewals drove upside to our planned MFI in the second quarter. Moving on to gross margins. Excluding the gasoline business, our merchandise gross margin rate increased by approximately 10 basis points year-over-year, led by disciplined cost management and continued execution on our long-term initiatives, including that of our own brands. This was slightly lower than our planned rate for the quarter as we work to invest in our business and in our members. We expect to continue to invest in the back half to continue to do the right thing for our members, which will be the right thing for us in the long term. SG&A expenses for the quarter were approximately $750.3 million, exhibiting expected deleverage as a percentage of net sales. This was primarily attributable to our new unit growth and other investments to drive our strategic priorities. As Bob mentioned earlier, we continue to gain share in our gas business, with comp gallons growing by approximately 5% year over year. Furthermore, stronger profitability contributed to overall gas profits that exceeded our expectations in the quarter. Our second quarter adjusted EBITDA grew 4.9% year over year to $281.3 million. As a reminder, our calculation no longer includes pre-opening and non-cash rent expense add backs. Turning to the second quarter, our second quarter effective tax rate of 24.1% was primarily driven by an unplanned tax windfall. All in, our second quarter adjusted earnings per share of $1.09 increased by approximately 10.1% year over year, reflecting the growth in our top line and gross margins and robust membership trends. Moving on to our balance sheet, we ended the second quarter with absolute inventory levels about flat year over year and down 2% year over year on a per-club basis. We are operating six more clubs in our chain today compared to a year ago. Our team continues to work to allocate the right amount of product to the right clubs at the right time. In the second quarter, we improved our in-stock levels by approximately fifty basis points over the same period last year. Our capital allocation strategy is consistent with the framework we have set out in the past. We continue to believe that the best use of our cash is applying it towards profitably growing our business. As such, investments to support membership, merchandising, digital, and real estate initiatives will continue to be funded by our cash flows and enabled by our strong balance sheet. We ended the second quarter with half a turn of net leverage, which aligns with our long-term target of sub one turn. Returning excess cash to shareholders remains an important part of our capital allocation strategy as well. In the second quarter, we repurchased nearly 452,000 shares for approximately $40.4 million. As of the second quarter end, we have approximately $119 million remaining under our current share repurchase program. We will continue to take a disciplined and balanced approach to deploying our capital to maximize shareholder value. Turning to our outlook for the year, we continue to expect to deliver fiscal 2024 comp sales, excluding gas, between 1% to 2% growth. Within this range, we expect to be towards the high end, with Q4 performing better than Q3. We are proud of our achievements in membership, which has performed better than our expectations thus far this year. There are various elements that drive membership fee income, including the timing of new club openings, renewals, and the cadence of promotions, to name a few. With these in mind, we still expect our fiscal 2024 MFI growth rate to track better than our long-term algo of mid-single digits, but moderate from the growth rates we delivered in the first half of the fiscal year. As Bob mentioned, our business model and strategies around CMP and our own brands have allowed us to invest in our value proposition and help our members stretch their dollar. We will remain consistent in this approach to deepen member loyalty over time. Our perishables business is driving upside to our comp sales, especially as we advance our fresh initiatives. We expect that further strengthening our fresh business will boost trip frequency and share of wallet, positioning us for growth longer term. Greater than expected throughput in the near term has pressured our perishable supply chain in the form of additional DC labor and freight cost. These are investments in our business that we are making today for long-term gains. As we do what's right for our members, we now expect our full year fiscal 2024 merchandise gross margin rate will be about flat year over year. We are planning for SG&A deleverage in the back half of fiscal 2024, as we continue to invest in our growth initiatives, particularly in unit growth and new club sales, continue to ramp over a multi-year period. A reminder that we are also lapping variable compensation tailwinds from fiscal 2023. As we prepare for 11 new club openings in the back half of the year, we also expect pre-opening expenses to ramp accordingly, amounting to approximately $30 million in aggregate across the third and fourth quarters. We are planning for an effective tax rate of approximately 28% in the back half of the fiscal year. We are maintaining our guidance for fiscal 2024 adjusted EPS, which was in the $3.75-$4 range, with investments for the long term potentially driving us towards the lower end of that range. Finally, recall that we are lapping a fifty-third week in the fourth quarter of last year that contributed approximately $0.10 to our earnings per share. Longer term, we remain confident in our underlying strength of our business and believe we are well-positioned to deliver sustainable growth to maximize shareholder value. Bob, back over to you. Thanks, Laura. Over the past five years, we have transformed our business by building a top-notch team, taking calculated chances on key strategic opportunities, executing at the highest level, and playing the long game while staying focused on what matters most, delivering value to our members. In doing so, we have demonstrated our ability to profitably grow our business and drive shareholder value since we reentered the public market in 2018. We are a stronger company today, unified by our purpose of taking care of the families who depend on us, and we are working to grow stronger. The rate of change in our company is very high. We have a lot of irons in the fire. These efforts significantly increase near-term complexity and may require more investments in the back half, but we believe these efforts keep us poised for future success. We will grow the size and quality of our membership. We will offer an unbeatable member experience through our merchandising improvements. We will provide more digital conveniences to save our members money and time, and we will profitably grow our footprint. Above all, we will continue to deliver compelling value to our members. Thanks again for joining us today and for your support of BJ's Wholesale Club. We will now take your questions. Thank you. We will now start the Q&A session. In fairness to all participants, please limit your question to one question and one follow-up. Our first question comes from the line of Robbie Ohmes from Bank of America. The line is now open. Please go ahead. Hi, this is Maddie on for Robbie. Thank you for taking our question. Our question is, what are the general merchandise trends telling you on how you're positioned for holiday? Can you talk about any trends through the quarter and any color on how back to school is trending? Thank you. Hi, Maddie. Thanks, thanks for your question. Look, during the quarter, we're pleased with our general merchandise business in getting back to positive comp growth. As we talked about in the prepared remarks, we saw continued great performance out of our consumer electronics business out of our apparel business, and certainly continued progress in our home business. Seasonal had a much better track record in the second quarter than it did in the first. Some of that obviously being the better weather year over year, and some of it was the great value that we'd put forward. As we look at our general merchandise business, we're very proud of the progress that we're making in providing the best assortment for our members, the best value for our members each and every day. You know, as we get through, you know, third and fourth quarters, certainly, as we get into holiday, GM becomes a bigger portion of our business. Back to school, back to college is not a huge business for us, but certainly, the holiday season is, general merchandise becomes a bigger penetration of our overall business at that point for obvious reasons. We're very excited about the assortment that we're putting forward and bringing in to our distribution centers and our clubs pretty shortly here. We're hoping for great results during the back half from a general merchandise perspective. Thank you. And maybe just one quick follow-up. Are you giving yourself any room to invest in price and general merchandise? Yeah, look, as you know, Maddie, value is what we do, right? So we are always investing in our business. We're always investing in value. We're always investing in our members. And I think that's what you're seeing really in the fantastic membership statistics that we've seen this past quarter in the first quarter and in the last couple of years. As we grow the size and quality of the membership, we're growing renewal rate meaningfully, growing our premium tiers. It's all about value. And certainly, these days, value is even more paramount as folks digest all the inflation we've seen over the past couple of years. So we continue to invest every day. We will continue to invest in the future across our business, not just in general merchandise. Thank you. Really appreciate it. Thanks, Maddie. The next question is from Peter Benedict from Baird. The line is now open. Please go ahead. Oh, hey, thanks, guys. Good morning. So my first question is just kind of around the profitability view here. You talked about the change in the merchandise margin outlook. It sounds like there's some DC-related stuff there. There's also some investment in perishable pricing. I'm just curious if any of that's in, particularly the latter, is in reaction to something you're seeing in the market, something you're doing proactively. Just kind of curious, maybe a comment around the competitive environment. That's my first question. Morning, Pete. Thanks for the question. Look, I think as it regards what we're seeing and doing from a merchandise margin perspective, I think you can categorize it as playing the long game. We are really trying to, you know, invest not just for a particular quarter, but for the long-term success of our franchise and building our membership and building our members', you know, positive feelings about our franchise. So as you think about the dynamics in the second quarter and then in our forecast for the rest of the year, I think you really have three things to talk about. One, investments in price and promotion. You know, not a surprise to anybody on this call that our members and consumers broadly have had to digest a lot of inflation over the last couple of years. They do remember what old price points are, and they are. We are seeing a consumer that, while very resilient and very happy to be shopping in our buildings, is a little bit more sensitive to price and promotion than they have been in the past. And so we are taking advantage of that and making sure that we have the right price gaps, making sure that we help our members through, you know, through their shopping needs. Number two really is the strength of our perishable business, right? We've talked a lot about Fresh 2.0. We've talked about the importance of driving our members into that weekly shop mode, you know, through categories like meat and produce. We've seen tremendous gains, frankly, higher than what we thought we would see in terms of perishable units, and that's providing a bit of pressure. As you know, perishables, while incredibly important to our members' view of us and their purchasing habits over the long term and their renewal habits over the long term, it does require a little bit of extra labor, a little bit of extra handling in the distribution center and some extra freight versus our plans. And so we are investing proactively there to make sure that we see the results in the future that we want, meaning that those extra trips across the box, not just in perishables, and then the associated membership benefits from that. And then finally we are transforming our merchandising across the business at a fast pace. We really are assorting for the long term, trying to provide our members with the greatest value and assortment that we can, and we are changing things all over the box. And quite candidly, that's providing some growing pains as we go through those transitions. We are actively doing this stuff because we think it benefits next year, the year after, the year after that, even if it is a little bit of a burden this year. While saying that, I think the team's doing a wonderful job picking items. I think the team's doing a much better job managing inventory levels, as Laura talked about in her comments, being flat year over year in inventory, being down on a per club basis, you know, in spite of everything going on, like our in-stock rates going up and building new stores. I thought that was a fantastic result. And so while we are seeing some growing pains, we are really managing the day-to-day pretty well. And so as we look forward, we'll continue to invest in our membership, we'll continue to invest in perishables because we know how important it is, and we'll look to iron out the growing pains as we go. Great. That all makes sense. Thanks. My follow-up question probably be around kind of membership, member growth and MFI. You know, comp club member growth is driving two-thirds of the total member growth. I think that's what you guys said earlier. What are you guys doing differently to create that? Because I'm pretty sure that has not been the case historically. So what have you really changed in terms of how you kind of go after members in existing markets? And then related to that, the MFI strength, how does that impact, if at all, your willingness or to consider a fee increase at some point, either later this year or into 2025? Thank you. Yeah, good, good questions. So look, you know, we couldn't be more proud of the results we had in the second quarter. They built on top of the fantastic results of the first quarter. You know, both quarters beating our expectations for our MFI performance. And really, we saw great results across the MFI metrics that we care most about. As we talked about seeing fantastic growth in total memberships both from a renewal rate perspective and from a new member acquisition perspective. We're seeing, you know, MFI dollars per member grow. If you remember, we've talked about that as the fee increase-- without a fee increase before I get to your fee increase question. And then the team is doing a spectacular job driving members up into our premium tiers and into our co-branded credit card. And so, you know, look, I think the strength in membership is a couple of things. One, we are running a better business today than we ever have. We are providing more value than ever. We are finding ways to convince our members of that. We are showing it to them in ways that are evident, just with their eyes. You can look across our buildings and see better assortments and better value. We are saving them time through our digital processes. We're doing a lot of things really well. The 9.1 was a little bit ahead of our expectations for the quarter. As Laura said, there's a lot of stuff that goes in there, timing, accounting adjustments, promotions, things like that, and so, you know, I think that will moderate in the back half a bit. That takes nothing away from the strength of what we see in our membership franchise. As you think about the why, I mean, I think one of the great strategic unlocks we've pursued as a team over the past several years is growing memberships in comp clubs. And, you know, I've been around the company for a long time. For a ton of my history with the company, we really couldn't figure out how to grow membership in comp clubs, and the team has now unlocked that, you know, that methodology that allows us to grow comp club memberships in a pretty predictable way. We are giving ourselves permission to experiment with new offer structures, new ways of balancing getting the right amount of people in versus the quality of those people in. We're doing a great job understanding who our best target members are and trying to figure out different ways to talk to them. So it's a bunch of different things that's growing, but it's all centered on providing the most value and the best assortment we can every day. As you think about the prospect of a fee increase, you know, I think you need to step back and think about all that stuff that I just said. First and foremost, we have tremendous momentum in our membership statistics from an acquisition perspective, from a renewal rate perspective. You know, over the past several years, we've really had that fee increase without a fee increase by leveraging folks up into the premium tier memberships. You know, our MFI per member is up well over $5 from where it was at the last fee increase. We understand where the industry has gone in the last couple of years and couple of months even. And we believe that we are providing considerably more value today than we were at the time of our last fee increase. You don't have to look farther than our co-brand credit card, getting 5% back or $0.05 off gas for our rewards members. Those are new adds since the last fee increase. So you know, we're very comfortable with where we are from our value offering, from our membership momentum perspective. With all that said, our guide for the back half doesn't contemplate a fee increase, and when we have news on that front, we'll share it with everybody. All right, fair enough. Thanks for the perspective. You bet. Thank you. The next question is from Michael Baker, from D.A. Davidson. The line is now open. Please go ahead. Okay, thanks. Maybe a couple follow-ups on some things we've talked about, but the pre-opening cost of $30 million in the back half, I mean, that's almost 2x from last year. Was that always the plan, or have clubs been delayed, or the timing, at least, of the pre-opening on the P&L? Is that different than you originally thought? I guess what I'm trying to get at is that a reason why, you know, you might be at the lower end or in the back half or anything along that relative to the original plans? Hey, Mike, thanks for the question. I think it's a good one. You know, we are thrilled with our progress from a real estate perspective as well, and we are a little bit ahead of our original plans for the year in terms of the number of boxes that we'll open. As we said, and I'll let Bill talk for a minute here. We've got 11 in the next six months. We had built a few less than that into our original plan for the year, and so it does provide some pressure in the back half. Again, these are great investments for the future, and so even though it pressures the back half in this year, it will bode well for the future. So you're on the right point there. Bill, what else from a real estate perspective? Yeah, I think, Bob, as, as I look out, 11 clubs in the next six months is probably one of the most aggressive kind of expansion plans that we've had in the company's history, and we're really proud of all the work that the team's done. As we think about the mix versus lagging last year, we had five clubs in the back half of last year. We'll do 11 in the back half this year. So as you think about sequentially, you know, year over year, the pre-open expense. You know, that's why that's flowing in in that way. But it was always the plan was always, as we communicated, back-half weighted for this year. Okay, makes sense. Another follow-up to a previous point. You talked about the growing pains in changing the assortment. More color on exactly what that means, is that, you know, markdowns as you change things out, is that labor associated with those changes? And then typically, what's the timing of when that pays off? Does that pay off this holiday season? Does that pay off, you know, next year? How to think about that a little more? Yeah, sure. Look, it's a little bit of all the above. You know, we're doing it because our members are asking us for better assortments. Our CMP process is working. It is yielding really relevant, timely new assortments across the box in many categories. Those categories going through the CMP process are comping better than those that haven't. They're having better margin results as well. And so we're very happy and proud of what the CMP process is putting forward. But it is requiring a little bit more labor in areas like in several of our boxes we have reset our entire snacking assortment in the middle of the club. We've consolidated the snacking from a number of different runs and put it up front, right near the registers, right in prime time, where we can take advantage of people's path through the club, and really show off that great assortment that we have. That's an expensive endeavor to move stuff around the clubs, as one example, and certainly, as we swap out old stuff for new stuff, we are incurring markdowns to get rid of the old stuff. We probably have a little bit more of those than we anticipated, and we are working to streamline our process of you know, hooking the new SKUs to the old ones and bringing in the new ones when the old ones sell down in their natural course. Again, all these things are, we believe, are great investments for the future. As I said, all the stuff that goes through CMP is performing better. And so we anticipate these investments paying off next year. The back half, I think we'll see some burden associated with it, but we wouldn't be doing it if we didn't see the fantastic results that we are seeing from these categories that go through the process. Yeah. Awesome. Makes sense. Appreciate the time. Thanks, Mike. Thank you. The next question is from Chuck Grom from Gordon Haskett. The line is now open. Please go ahead. Hey, guys, this is Ryan Bolger on for Chuck here. I just wanted to ask about the general merchandise categories a little bit. It sounds like, you know, it's improving. And as you see these categories that, you know, within general merchandise that have been weaker or stronger, start to turn around and rebound, I just kinda wanted to know what's really driving that improvement. Is it the macro or replacement cycle starting to turn, or maybe it's innovation? Just any color on that would be great. Thank you. Sure. Thanks, Ryan, for your question. Look, as I said, we're very proud of our GM team and the results that they're putting up. We've turned around, you know, this giant category in our business that is incredibly important to the treasure hunt and the emotional aspect of shopping, by investing in our team and investing in our members, by showing them even better assortments, quarter over quarter, year over year. This is a long-term build for our company. It took us quite a bit of time to get to where we were a couple of quarters ago at our, hopefully, our lowest general merchandise penetration in our history. And we are now building back towards an even higher general merchandise penetration. We know it's important to our members. We know that the treasure hunt is important. They want to, you know, be surprised and delighted as they do their grocery shop. When they see that great apparel item or the cool thing from, you know, one of our home categories or certainly, you know, one of our best categories, consumer electronics, they wanna be able to put that in their basket. You know, our job is to move it from an opportunistic business to one that generates trips by itself. We certainly have that in some categories like CE. We've run that business very effectively over the years. We've always had great merchants there and, and great market share, and we are, really trying to run that playbook across the business, and it starts with getting the right new products in our buildings. We didn't, in the past, have the right brands, the right products. Our value prop was somewhat off. The way we displayed things wasn't optimal. We are making great strides in all of those things. It starts with having the right talent here in the building, in our Club Support Center here in Massachusetts. Those folks do the hard work of picking the items and making sure they get into the clubs in the right way. Takes a lot of investment in the field to present those things the right way. You think about something like furniture or patio sets. We've completely renovated the way that we assort those, presenting them in much more vignette style, lifestyle things to show members what it might look like in their home. We've done a lot, and yet we still have a lot to go. We need to repeatedly do these things quarter after quarter, year after year to reintroduce these categories to our members, to build credibility with our members, and keep building the flywheel from a general merchandise perspective. Great. Yeah. No, thank you. And then just as a quick follow-up, on big ticket, just a little bit more color there. Are you seeing any difference and big-ticket spend and trends between your membership tiers or, you know, any metrics you look at in terms of household income? I know you spoke to customer health a little bit earlier, but just any color on the big ticket side of that would be great. Thank you. Yeah, look, you know, I think, as you think about the consumer out there, they are certainly resilient and yet value-focused at the same time. As we talked about in the prepared remarks, we're seeing great purchasing behaviors across the economic cohorts that we track. There's undoubtedly more pressure on the folks at the bottom of the economic spectrum versus those folks at the top. But they're all exhibiting, as we see, great purchasing behaviors. You know, but they are value-focused. They are looking for that right item at the right price. When they see it, they will absolutely put it in their basket, and when they don't, they are a little bit more choosy. In places where we have that assortment, we have that credibility, we have those right price points, and our big tickets, like consumer electronics, they're absolutely purchasing. And where it's not, you know, perfect on one of those dimensions, they're a little bit more savvy. They're waiting for a markdown, they're waiting for a promotion. And, you know, we saw some of that in our patio sets and structures this year. Those are abnormally big tickets, you know, $2,000 for a structure or a shed. And in this day and age, you've got to have it, you've got to have it right for folks to do it. So we'll continue to work to provide the best assortment and the best, best value to our members, you know, regardless of what's going on in the economy. Thank you. The next question is from Simeon Gutman, from Morgan Stanley. The line is now open. Please go ahead. Thanks. Good morning. I wanted to ask a little bit about the back half change. So the business has been managed really well, and especially this past quarter. I wanna. I'm curious how much of this, the back half change investments that you talked about is responding to the environment that's changing versus, and I don't mean this word badly, but underinvestment, things that could have been preempted. So if you could, like, sort those two out, if it's just responding to environment versus investments that, you know, could have been made earlier in the cycle. Hi, Simeon. How are you doing? So look, I think there's a little bit of both, where, as I said, we're trying to build our company for the long term, build our franchise and our market share for the long term. We're playing a little bit of offense here, which sometimes requires investment, and we're playing a little bit of defense, too, knowing that, you know, every retailer out there is seeing very similar things to what we're seeing and with very savvy, price-sensitive customers. So, you know, when we think about providing everyday value, we won't compromise from an investment perspective. We invest all day long, all month long, all quarter long, all year long, and we will continue to do that, even if it pressures the back half. Most of the change and the pressure that we're seeing is, you know, from choices that we are making that we believe have long-term benefits. We wouldn't be proactively growing our perishables business at the pace that we're growing at if we didn't think that would yield overall trips and renewal rate in the future. We wouldn't be changing our assortment as fast as we are if we didn't see the payoff in the results after we change. We could do those things in a more careful, slow, methodical basis and potentially lessen the burden in the back half, but we want to position ourselves in the future for the greatest success that we can. And so we really are trying to be mindful of going as fast as we can and investing as much as we can because we are very confident, you know, in our future. We don't have to look past the membership statistics to know why we're confident. But we understand that it requires continual investment and a you know, really offensive mindset to do it. Does it change? I think some of it, you said the benefits should be felt already in the next fiscal year. Does it change your posture in how you approach investment? I was looking. You know, your EBIT margin's higher than it was pre-COVID. Your gross is the same, so it looks like, you know, it's the higher sales base covering expenses, which doesn't seem that bad. But do you? Does the margin of the business lower down to allow for some of these investments, or do you try to keep the margin of the business where it is while you invest? I think you've got pluses and minuses running through margin, right? You have things like our retail media network that are new to us in the last couple of years that are good guys from a margin perspective, and we take those dollars, and we reinvest them back in our membership. You see our ability through CMP to raise our core margin rates, and we usually take that and reinvest that somewhere, like we did in our credit card program. We're, you know, we are trying to, you know, build a strong long-term franchise, not really to win in any one particular quarter. Look, I think we're making the investments we think that we can, that will matter, and some of them will pay off in the short term, and some will pay off in the long term, and if they don't, we'll change course. ... Fair enough. Okay, thanks. Good luck. Thanks, Simeon. Thank you. The next question is from Mark Carden from UBS. The line is now open. Please go ahead. Good morning. Thanks so much for taking the questions, guys. To start, another question related to the margin. Just on that 20 basis point reduction in your merch margin outlook, is that all being driven by price investments, or is there much of a mix element involved here? And is there any element of, it wouldn't necessarily be like that, but do you feel the need to increase discounting for new memberships? Thank you. Hi, Mark. Good morning. Listen, I don't know that I have a ton to build on the margin point. I think we've hit that quite heavily. But other than to say there is some mix involved as we build perishables. As a for instance, that has a little bit of a lower ring on an average basis than you know, a pack of paper towels or an item in general merchandise. So that can provide some margin rate pressure just by the math of it. But really it is those things that we've been talking about, the proactive investments we're making in everyday value and you know, and growing our franchise for the future. As you think about membership fee income and attracting new members, the tremendous success that we've seen so far, you know, is built on a discounted membership fee model. As you know, years ago, we transitioned away from a free trial model to a paid membership model. Most of our members come in on some sort of a deal in the first year, contingent upon participating in our Easy Renewal program, where they pay the full membership fee in the second year. That's pretty consistent with what goes on in the club world and then with subscription models all across the economy. We are continuing that. It's been very successful, and our team's been great at innovating around you know the offers presented with that, with that structure. It is really about finding the right prospective members and finding an offer that works for those prospective members. So I think we'll continue to use that discounted MFI model. We will continue to you know push people up through the higher tiers. We will continue to renew folks you know at full freight in the second year. That's been you know a great underlying strength for us over the past several years, and I don't see a reason why we stop. Great. Thank you. And then as a follow-up, one of your largest conventional grocery competitors announced it's shutting down a number of stores in your footprint. When you guys see major grocers close stores within your trade areas, do you typically see a material uptick in membership sign-ups in those markets? Do those customers tend to gravitate towards other conventional grocers, just given SKU count and pack differences? Just what do you typically see on that front? Yeah, look, I think, we have tremendous benefits to our model versus conventional grocer, and the biggest one is obviously value. We try and be 25% better priced than conventional grocers, and in some places, it's even higher than that. I would suspect that you know, club gaining share and BJ's gaining share weighs on conventional grocers, and I expect that when folks close their buildings, their customers, if they're not already a member of ours in our markets, they would look to us to fill some of the gap. And so we look at it as an opportunity. We will, you know, be playing offense to try and get an additional share from those customers, and we'll play to our strengths. We try and save our members time through digital and money through the value that we offer every day, and it's usually a pretty compelling case when we face a conventional grocer from that perspective. And so, we're pleased to have this opportunity to gain more of our members' wallets that also shop conventional grocery, and we're pleased to have the opportunity to introduce ourselves to folks that don't know us that may come over during those transitions. Great. Thanks so much, and good luck, guys. Thanks, Mark. Thank you. That's the end of Q&A for today's conference. I will now hand over to Bob Eddy, Chairman and Chief Executive Officer, for the closing remarks. Thanks very much. I appreciate everybody's attention this morning. Thank you for your questions, for your support of our company, and we wish you the best as we go through the back half. Enjoy the rest of the summer. We will talk to you at the end of the third quarter. Thanks so much. This concludes today's conference call. You may now disconnect.