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NATICK, Mass. - The chief executive of BJ's Wholesale Club, Inc. here said yesterday that his company plans to carry more premium meats, imported cheeses, and organic produce in a bid to lure more shoppers from traditional supermarkets and help the club chain work its way out of a margins rut that is dragging down profit performance.
C.e.o. Herb Zarkin also said the retailer will rotate specialty items in the mix, and offer more general merchandise products, which, like perishables, have higher margins.
BJ's yesterday reported net income for the first quarter of 2007 of $13.7 million, or 21 cents per share, vs. net income of $15.4 million, or 23 cents per share in the year-ago period, an 11 percent decline.
Net sales for the first quarter of 2007 increased 7.5 percent to $2.0 billion, from $1.9 billion last year, while comparable-club sales for the first quarter of 2007 grew 2.3 percent, including a contribution from gas sales of 1.4 percent and a negative impact of 0.4 percent from the absence of pharmacy sales vs. the year-ago period, the company said. The chain earlier this year closed all of its in-club pharmacies.
For the first quarter of 2006, BJ's posted comparable-club sales growth of 2.0 percent, including a contribution from gas sales of 1.4 percent.
Additionally, during the first quarter, the company bought 500,000 shares of BJ's common stock at an average cost of $33.91 per share, or about $17 million, leaving about $37 million remaining under the current authorization.
The chain operates 173 BJ's Wholesale Clubs in 16 states.