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BJ's Wholesale Club, Inc. yesterday posted total sales for the second quarter of 2008 of $2.65 billion, a 17.9 percent increase from the $2.25 billion reported for the second quarter of 2007. Comparable-club sales rose 15.5 percent for the quarter, including a contribution from gasoline sales of 8.1 percent.
Company chairman and c.e.o. Herb Zarkin attributed the surge to "significantly higher sales of "gasoline, strong sales of perishable foods, edible grocery, and nonedible grocery [that] exceeded our expectations as consumers sought relief from inflation and a generally weaker economy."
The company's net income for the quarter was $36.5 million, or 61 cents per share, vs. $36.3 million, or 55 cents in the year-ago period.
Results for the quarter included income of $2.0 million post-tax, connected with favorable state income tax audit settlements, compared with income of $2.4 million post-tax, related to the disposition of a lease for one of the two ProFoods Restaurant Supply locations closed by the company in January 2007; in addition to income of $3.6 million post-tax from favorable state income tax audit settlements.
For the first half of 2008, net income came to $53.7 million, or 90 cents per share. These results included post-tax income of $2.0 million for the favorable state income tax audit settlements in the second quarter.
"During both the second quarter and first half comp sales of food increased by approximately 10 percent and and the general merchandise sales increased by approximately 2 percent," noted BJ's c.f.o. and e.v.p. Frank Forward during a conference call yesterday.
Forward added that departments with strong second-quarter sales included breakfast needs, coffee, computer equipment, dairy, fresh meat, frozen, health and beauty aids, household chemicals, paper products, produce, salty snacks, and toys.
Air conditioning, bestselling books, cigarettes, electronics, furniture, jewelry, summer seasonal goods, and televisions were among those departments with weaker second-quarter sales.
Zarkin said that the company would continue to stress "quality and innovation" in its perishable offerings, by such strategies as replacing a number of domestic cheeses with imported brands from Denmark and Spain, raising its standards for product presentation and replenishment, and bringing in new branded items from Boston Market, Panera, and Regal Seafoods.
It will also roll out new organic products under the provate label Rosano and Earth Pride labels, including ravioli, lemonade, baby carrots, and salad dressing.
President and c.o.o. Laura Sen pointed to the positive performance of such "fun" new gourmet appetizer and dessert items as mini pastries filled with lobster and shrimp, gourmet mini burgers with blue cheese, [and] chicken and pastry trumpets...as well as three varieties of Cheesecake Factory branded cheesecakes."
BJ's officials were upbeat on the subject of future food sales.
"I believe our grocery and consumable divisions, which have historically delivered on all of our members' stockup, needs will continue their strong performance into the second half,' said Sen, "bolstered by unit gain as well as some retail price inflation."
Later on, Zarkin noted during the question-and-answer period: "I...am optimistic that our food categories, nonfood edibles, and our consumer kind of products [will] continue to drive very strong. I think our perishable business is going to be quite powerful."
The company is raising its earnings guidance for fiscal 2008 to a range of $2.10 to $2.20 per diluted share. Previous guidance was in the range of $2.04 to $2.14 per diluted share.