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NATICK, Mass. - BJ's Wholesale Club, Inc. here said this week its earnings dropped 13 percent in its latest quarter amid higher costs. The company's revenue, however, rose 18 percent.
The warehouse chain said net income was $20.4 million, or 29 cents a share, for the third quarter ended Nov. 1, compared with $23.4 million, or 33 cents a share, a year earlier. Costs rose for merchandise, technology, marketing, and store renovation.
The latest quarter also included a gain of about $600,000, or a penny a share, from reducing the company's reserve for House2Home lease obligations. House2Home, a home improvement chain that was affiliated with BJ's, filed for bankruptcy in November 2001.
BJ's income per share was in line with estimates issued in October. The results beat Wall Street's expectations for earnings, excluding items, of 27 cents a share. Revenue for the latest period climbed to $1.64 billion from $1.39 billion, thanks to a 6.2 percent sales increase in membership fees and an 11 percent rise in sales at stores open more than a year.
Meanwhile competitor Costco will likely get a boost in business now that it was featured on "The Oprah Winfrey Show" this week. Talk show hostess Winfrey went shopping at the membership club for the first time and dedicated the better part of her Monday show to the experience.
With camera crew in tow, Winfrey signed up for a Costco membership club card and went on a major shopping spree, stocking up on an extra-large designer jogging suit; a jumbo lobster tail; a case of Scott toilet tissue; Costco's famous, made-from-scratch chicken pot pie; two dozen purple roses; and several other items. Even though she rushed past the giant bags of Ruffles potato chips, Winfrey's bill came to $548 and she was amused when the cashier had to see a photo I.D. and call for manager approval for her to write a check.
Winfrey raved to her audience about the Costco experience, and the auditorium erupted in applause when she announced that each member of the studio audience would receive a free Costco Executive Membership, along with chicken pot pie and apple pie.