BJ's profits jump 43 percent
May 24, 2004-- Home Textiles Today,
Helped by a double-digit gain in sales and a tight grip on costs and stockpiles, first-quarter profits at BJ's Wholesale Club Inc. climbed 43.1 percent, to $16.1 million from $11.3 million last year.
Sales at the Northeast no-frills, low-cost operator rose 12.1 percent, to $1.6 billion from $1.4 billion. Same-store sales increased 6.6 percent, including a contribution from sales of gasoline of 0.4 percent.
Putting some pressure on the bottom line, average gross margin thinned to 7 percent from 7.2 percent during the prior-year period. But with margin erosion offset by the stronger sales, gross margin dollars still grew 8.9 percent, to $113.4 million from $104.1 million.
Offsetting weaker margins was an improving expense ratio, which declined 30 basis points, or three-tenths of a percentage point, to 7.6 percent of sales from 7.9 percent a year ago.
Inventories were tightly controlled, rising substantially behind the rate of sales. Stockpiles grew 7.4 percent, to $707.7 million from $659 million, while sales grew at the faster pace of 12.1 percent.
Mike Wedge, president and CEO, commented, "Our results for the first quarter reflect significant investments to become a truly member-centric organization. Based on our Member Insight findings, we re-merchandised approximately 75 percent of the aisles in our clubs during the first quarter. On a comparable-club sales basis, food increased approximately 9 percent, and general merchandise increased by approximately 4 percent."
The company also said it repurchased about 317,000 shares of its outstanding common stock during the quarter at an average price of $25.10, for a total of approximately $8 million.
BJ's Wholesale Club Inc.
|Qtr. 5/1 (x000)||2004||2003||% chg|
|a-First-quarter results include a $132,000 loss from discontinued operations, compared with a $149,000 deficit during the same period a year ago. Prior-year results include a $1.3 million charge stemming from an accounting change.
|Oper. income (EBIT)||26,605||19,793||34.4|
|Per share (diluted)||0.23||0.16||43.8|
|Average gross margin||7.0||7.2||—|