BJs Wholesale Club Holdings Inc (BJ)

Interest coverage

		Feb 3, 2024	Oct 28, 2023	Jul 29, 2023	Apr 29, 2023	Jan 28, 2023	Oct 29, 2022	Jul 30, 2022	Apr 30, 2022	Jan 29, 2022	Oct 30, 2021	Jul 31, 2021	May 1, 2021	Jan 30, 2021	Oct 31, 2020	Aug 1, 2020	May 2, 2020	Feb 1, 2020	Nov 2, 2019	Aug 3, 2019	May 4, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	785,818	764,606	743,297	735,057	705,657	669,993	651,944	608,862	574,855	562,418	592,756	607,404	642,392	579,544	490,121	425,267	352,199	380,237	369,632	309,565
Interest expense (ttm)	US$ in thousands	49,837	74,060	56,056	39,782	40,082	44,259	46,059	47,659	49,159	18,396	33,481	50,172	69,020	78,789	86,251	93,420	99,238	97,579	98,692	111,835
Interest coverage		15.77	10.32	13.26	18.48	17.61	15.14	14.15	12.78	11.69	30.57	17.70	12.11	9.31	7.36	5.68	4.55	3.55	3.90	3.75	2.77

February 3, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $785,818K ÷ $49,837K
= 15.77

BJs Wholesale Club Holdings Inc has shown fluctuating interest coverage ratios over the past few quarters, with a general decreasing trend observed since the beginning of 2020. The interest coverage ratio, which indicates the company's ability to pay interest expenses on its outstanding debt, was relatively strong in early 2020 but has declined steadily since then.

The company's interest coverage ratio peaked at 30.57 in October 2021, indicating a robust ability to cover its interest payments with its earnings. However, the ratio has since decreased significantly, reaching a low of 2.77 in May 2019. This downward trend may raise concerns about BJs Wholesale Club Holdings Inc's financial health and its ability to service its debt obligations.

The company's interest coverage ratio has been volatile, potentially indicating fluctuations in profitability and earnings. Investors and stakeholders should closely monitor this ratio to assess the company's financial leverage and risk of default. It is essential for BJs Wholesale Club Holdings Inc to improve its interest coverage ratio to ensure its long-term financial stability.