BJ's Wholesale Club, Inc. (NYSE: BJ) today reported net income of $33.7 million, or $0.62 per diluted share, for the first quarter ended April 30, 2011. Results for the first quarter of 2011 exceeded the Company's guidance for net income in the range of $29.5 million - $31.5 million, or $0.54 - $0.58 per diluted share.

BJ's president and chief executive officer, Laura Sen, said, "BJ's is off to a great start in 2011. Our stronger than expected performance for the first three months of 2011 reflects net sales above plan, continued margin expansion and excellent cost control. I am very proud of our team members in the field, distribution centers and home office for delivering another great quarter."

Sales Results for First Quarter Ended April 30, 2011

Net sales for the first quarter of 2011 increased by 10.0% to $2.77 billion and comparable club sales increased by 6.3%, including a contribution from gasoline sales of 3.9%. Merchandise comparable club sales excluding gasoline increased by 2.4%.

The Company provided the following additional information regarding comparable club sales for the first quarter (all comparisons are to the comparable, prior year period):

  • Comparative Club Sales by Geographic Region
              Thirteen Weeks Ended April 30, 2011
Comparable Club Sales    

Impact of Gasoline
Sales

   

Merchandise
Comparable Club
Sales

New England 4.0 % 4.3 % (0.3 )%
Upstate New York 8.2 % 5.8 % 2.4 %
Metro New York 3.1 % 1.1 % 2.0 %
Mid Atlantic 6.5 % 4.2 % 2.3 %
Southeast 11.6 % 5.0 % 6.6 %
Total chain 6.3 % 3.9 % 2.4 %
  • Competition and cannibalization had a negative impact of approximately 2%.
  • Excluding the impact of gasoline, member traffic increased by approximately 2% and the average transaction amount increased by approximately 1%.
  • Sales of food increased by approximately 4%, following a 6% increase in last year's first quarter, driven primarily by an 8% increase in perishable foods. On a two-year basis, comparable club sales of perishable foods increased by approximately 16%. General merchandise sales decreased by approximately 1% for the first quarter, following an increase of approximately 1% in last year's first quarter.
  • Departments with the strongest comparable club sales increases included bakery, dairy, deli, frozen, health & wellness, meat, milk, prepared foods, produce and small appliances. Weaker departments versus last year included apparel, books, cigarettes, diapers, prerecorded video and televisions.

Revised Earnings Guidance for the Fiscal Year Ending January 28, 2012

For the year ending January 28, 2012, the Company now expects to report net income in the range of $147 million to $157 million, and earnings per diluted share in the range of $2.68 to $2.88. For the second quarter ending July 30, 2011, the Company expects to report net income in the range of $40.5 million to $42.5 million and earnings per diluted share in the range of $0.74 to $0.78.

The following chart presents the detailed elements of our sales and earnings guidance for the thirteen weeks ending July 30, 2011 and fifty-two weeks ending January 28, 2012:

         

Q-2

          

Full Year

Net sales increase 7.5% to 9.5% 6.5% to 8.5%
Comparable club sales increase 4.0% to 6.0% 3.5% to 5.5%
Impact of gasoline on comparable club sales 2.0% to 3.0% 1.0% to 2.0%
Merchandise comparable club sales increase 1.7% to 3.7% 2.0% to 4.0%
Membership fee growth increase 8.5% to 9.5% 9.5% to 10.5%
Depreciation Expense (in millions) $33 to $34 $135 to $141
Preopening expense (in millions) $0.0 to $0.5 $6.0 to $8.0
Income Tax Rate 40.5% 40.3%
 
Net Income (in millions) $40.5 - $42.5 $147.0 - $157.0
EPS - Fully Diluted $0.74 - $0.78 $2.68 - $2.88

First Quarter Earnings Conference Call

BJ's management will host a conference call today at 8:30 a.m. ET to discuss information included in this press release and related matters. The conference call will be available through webcast and replay from BJ's investor relations website at http://www.bjsinvestor.com.

About BJ's Wholesale Club

BJ's introduced the wholesale club concept to New England in 1984 and has since expanded to become a leading warehouse chain in the eastern United States. The Company currently operates 190 BJ's Wholesale clubs in 15 states.

Forward-Looking Statements

Statements contained in this press release, including earnings guidance, that are not purely historical are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, forward-looking statements are often characterized by the words "believes," "anticipates," "plans," "estimates," "expects" and similar expressions. Actual results may differ materially from those indicated by forward-looking statements. Factors that may cause or contribute to such differences include, without limitation, levels of gasoline profitability, levels of customer demand, economic and weather conditions, the rate of inflation or deflation, federal, state and local regulation in the Company's markets, federal budgetary and tax policy, litigation, activities by organized labor, competitive conditions, uncertainties introduced by the Company's February 2011 announcement that it has decided to explore and evaluate strategic alternatives, including a possible sale of the Company, our success in settling lease obligations for closed clubs, progress associated with the implementation of technology initiatives and other factors discussed in the Company's Annual Report on SEC Form 10-K for the fiscal year ended January 29, 2011. Any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. Our forward-looking statements do not reflect the potential future impact of any merger, acquisition or disposition. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
           
STATEMENTS OF INCOME (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
 
Thirteen Weeks Ended
 
April 30, May 1,
2011 2010
 
 
Net sales $ 2,769,270 $ 2,516,376
Membership fees 50,440 46,393
Other revenues 9,264   9,049  
Total revenues 2,828,974   2,571,818  
Cost of sales, including buying and occupancy costs 2,535,080 2,298,155
Selling, general and administrative expenses 236,911 226,179
Preopening expenses 10   1,954  
Operating income 56,973 45,530
Interest expense, net (395 ) (227 )
Income from continuing operations before income taxes 56,578 45,303
Provision for income taxes 22,373   18,439  
Income from continuing operations 34,205 26,864
Loss from discontinued operations, net of income taxes (539 ) (775 )
Net income $ 33,666   $ 26,089  
 
Basic earnings per common share:

Income from continuing operations

$ 0.64 $ 0.52
Loss from discontinued operations (0.01 ) (0.02 )
Net income $ 0.63   $ 0.50  
 
Diluted earnings per common share:
Income from continuing operations $ 0.63 $ 0.50
Loss from discontinued operations (0.01 ) (0.01 )
Net income $ 0.62   $ 0.49  
 
 

Number of common shares for earnings
per share computations:

Basic 53,099,545 51,984,549
Diluted 54,051,861 53,311,957
 
 
 
BJ's clubs in operation - end of period 190 188
 
BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
           
CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in Thousands)
 
April 30, May 1,
2011 2010
 
ASSETS
Current assets:
Cash and cash equivalents $ 206,686 $ 63,647
Accounts receivable 152,307 131,868
Merchandise inventories 988,224 932,623
Current deferred income taxes 18,717 17,577
Prepaid expenses 46,810 36,569
Prepaid taxes 3,205 -
Total current assets 1,415,949 1,182,284
Property, net of depreciation 990,181 966,443
Deferred income taxes -

-

Other assets 23,679 26,084
TOTAL ASSETS $ 2,429,809 $ 2,185,917
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $ 381 $ 619
Accounts payable 736,306 685,639
Closed store obligations 7,265 1,725
Accrued expenses and other current liabilities 294,713 294,670
Total current liabilities 1,038,665 982,653
Long-term debt, less portion due within one year

-

381

Noncurrent closed store obligations 28,942 7,967
Deferred income taxes 17,212

-

Other noncurrent liabilities 153,900 137,643
Stockholders' equity 1,191,090 1,057,273
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,429,809 $ 2,185,917
 
BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
         
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
 
Thirteen Weeks Ended
 
April 30, May 1,
2011 2010
 
 
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 33,666 $ 26,089
Provision for club closing costs 1,031 166
Depreciation and amortization 33,285 30,088
Stock-based compensation expense 4,547 5,345
Deferred income taxes 8,456 331

Decrease in merchandise inventories, net
of accounts payable

71,635 26,373
Decrease in closed store obligations (11,360 ) (419 )
Other (12,487 ) (40,138 )
Net cash provided by operating activities 128,773   47,835  
 
CASH FLOWS FROM INVESTING ACTIVITIES
Property additions (31,914 ) (38,603 )
Property disposals 85 16
Purchase of marketable securities - (500 )
Sale of marketable securities -   1,032  
Net cash used in investing activities (31,829 ) (38,055 )
 
CASH FLOWS FROM FINANCING ACTIVITIES
Excess tax benefit from stock-based awards 944 252
Purchase of treasury stock (75 ) (10,061 )
Proceeds from stock options exercised 7,682 5,072
Repayment of long-term debt (159 ) (148 )
Net cash provided by (used in) financing activities 8,392   (4,885 )
 
Net increase in cash and cash equivalents $ 105,336   $ 4,895  

BJ?s Wholesale Club, Inc.
Cathy Maloney, 774-512-6650
VP, Investor Relations
cmaloney@bjs.com