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BJ's Wholesale Club, Inc. had sales for the first quarter of 2008 of $2.26 billion, up 12.3 percent from last year, thanks to "a flexible business model that allows us to adapt quickly to the changes in the consumer demand," said c.e.o. Herb Zarkin during a conference call yesterday.
Comparable-club sales grew 9.6 percent, including a contribution from gasoline sales of 3.9 percent, the club chain said.
During the call yesterday, BJ's c.f.o. Frank Forward noted that during the first quarter, food comps rose about 8 percent, while general merchandise sales grew about 1 percent. Last year sales were up 7.5 percent and comparable-club sales increased 2.3 percent, including a contribution from gas sales of 1.4 percent.
According to Forward, strong-performing departments in the quarter included juices, coffee, frozen, milk, dairy, produce, fresh meat, paper products, HBC, household chemicals, and toys. Meanwhile, cigarettes, pre-recorded video, tires, sporting goods, apparel, jewelry, storage, furniture, and summer seasonal goods were departments with weaker first-quarter performance than last year, he said.
Zarkin said during the call that the food comp figure was "a four-year high...driven by increases in perishable foods of approximately 10 percent."
Additionally, traffic increased 3 percent -- another four-year high -- and gas sales reached an all-time high.
Net income for the quarter was $17.2 million, or 29 cents per share, vs. net income of $13.7 million, or 21 cents in the year-ago period. Last year's results included income of $0.6 million post-tax, related to the closing of BJ's in-club pharmacies.
Zarkin said the company was "on track to accelerate club growth next year by opening seven to nine new clubs." He told an analyst during the question period that for "the next year or two we are going to stay in our current marketplaces," and that "we continue to find tremendous opportunity within our own existing marketplaces."
Zarkin went on to note that in addition to its 115,000- or 119,000-square-foot prototype location, the company was "looking at" an 85,000-square-foor model "that might fit into an urban location for us, and we have seen a couple of locations come by that we are going to take advantage of.
The c.e.o. added, "We're not announcing it today, but I think an 85,000-square-foot store would give us a very good return on our money and satisfy the membership."
The company already operates 18 "high-returning" 70,000-square-foot stores in the Northeast, he said.
BJ's c.o.o. Laura Sen said the chain's sales of home meal replacement items continued to grow, as casual restaurant dining continued to decline nationwide during the first quarter. "We also saw increased sales of European cheese, natural chicken, beef, and pork, as well as organic produce, including salads, carrots, tomatoes, and spinach. These are premium quality products that most people might consider discretionary, yet they consistently generate strong cost of sales increases for us."
Sen went on to point out the operations improvements made at the company that led to its strong results in the quarter, including investments in payroll, training, and member awareness that resulted in a better in-club member experience than last year; a new ordering system in the produce department that led to better freshness, better in-stock, and reduced salvage; a streamlined supply chain; and a significant reduction in merchandise handling and storage of globally sourced seasonal merchandise.
BJ's also said that it expects to report earnings for fiscal 2008 in the range of $2.04 to $2.14 per share, a rise of six cents over earlier guidance of $1.98 to $2.08 per share.
BJ's operates 178 BJ's Wholesale Clubs in 16 states.