BJS WHLSL USD0.01 
By 
By Nicole Maestri
The No. 3 U.S. warehouse club operator forecast earnings for the current quarter, which includes the crucial holiday season, that could beat current Wall Street estimates.
The company expects shoppers to continue to flock to its clubs for low prices on staples like fresh food, prepared meals and paper towels. BJ's also raised its full-year profit forecast, based on strong results from the just-completed third quarter.
"BJ's continues to remain one of the few bright spots in retail as consumers continue to trade down, consolidate trips, and look to maximize dollars spent through the warehouse club channel," JPMorgan analyst Charles Grom wrote in a note.
Shares of BJ's were unchanged at $33.57 in morning New York Stock Exchange trading.
GASOLINE KEY TO PROFIT JUMP
Shoppers pay an annual fee to shop at warehouse clubs like BJ's, Costco Wholesale Corp
Many clubs also operate gas stations, luring shoppers with prices that are typically lower than competitors.
This year, clubs have been a bright spot in the struggling retail sector as shoppers stretch increasingly limited budgets, especially when it comes to food.
"It is clear that we are capturing a bigger share of our members' grocery budget, and we believe we are benefiting from a decline in casual restaurant dining," President Laura Sen said on a conference call.
BJ's profit for the third quarter ended November 1 rose to $28.2 million, or 48 cents per share, from $22.7 million, or 35 cents per share, a year earlier.
Excluding a charge for closing a club in South Carolina, earnings were 49 cents per share. Analysts on average were expecting 48 cents, according to Reuters Estimates.
The company had forecast earnings of 45 cents to 49 cents per share, up from a previous view of 36 cents to 40 cents, due to strong gas station profits.
Rapid declines in gasoline prices can help BJ's margins because the company replenishes its fuel supplies daily. Traditional gas stations may turn their inventory weekly, meaning they are often selling supplies they bought when prices were higher.
During the quarter, the national average retail price for gasoline fell from roughly $3.80 a gallon to about $2.65, according to data from the U.S. Energy Information Administration.
"As gasoline prices steadily plummeted throughout Q3, it allowed us to offer a tremendous value on gasoline to our members relative to our competition, while at the same time achieving unprecedented gasoline margins," Chief Financial Officer Frank Forward said on a conference call.
CONSUMABLES, FOOD TO DRIVE THE BUSINESS
BJ's previously announced that third-quarter sales rose 13.4 percent to $2.4 billion, while sales at its clubs open at least at year rose 11.9 percent.
BJ's expects sales of consumable items like food and paper products to continue to outstrip demand for general merchandise, like jewelry and electronics, during the fourth quarter.
It forecast fourth-quarter same-store sales to rise 4.5 percent to 5.5 percent, and earnings of 86 cents to 90 cents per share for that period. Analysts on average had been expecting 87 cents.
For the full year, BJ's forecast earnings per share of $2.20 to $2.30, up from an earlier view of $2.10 to $2.20. It expects profit of $2.27 to $2.39 per share for the year ending January 30, 2010.
(Editing by Lisa Von Ahn and Derek Caney)
