Minus Charge, BJ's Numbers Please Street
March 7, 2005,
Natick, Mass. —Nicked by a $7.2 million non-cash charge to correct errors in the way it accounted for leases, BJ's Wholesale Club saw a 4.4 percent dip in fourth quarter profits, to $47 million from $49.2 million last year.
Wall Street was wowed, and sent the retailer's share price rocketing up 8.9 percent, or $2.73 a share, to $33.30 in heavy mid-day trading on Tuesday, March 1, the day the news was released.
Overall sales, including membership fees, advanced 7 percent, to $2.1 billion from $1.9 billion last year. Same-store sales improved 3.4 percent, including a contribution from gasoline sales of about 1.2 percent. For all of last year, sales jumped 10.2 percent, to $7.4 billion from $6.7 billion, while same-store sales jumped 6 percent, including a 1.1 percent contribution from gasoline sales.
Giving a lift to the bottom line, in addition to stronger sales, were widening margins, which improved 50 basis points, or one-half of a percentage point, to 10 percent from 9.5 percent a year ago. But acting as a partial offset, costs climbed as well, rising 40 basis points, or four-tenths of a percentage point, to 7.8 percent of sales from 7.4 percent.
BJ's Wholesale Club Inc.
|Qtr. 1/29 (x000)||2005||2004||% change|
|a. Total company sales, including $40.6 million in membership fees, up 12.7 percent from $36.1 million during the same period a year ago.
b. Fourth quarter results include a $7.2 million one-time, non-cash charge for lease accounting corrections; and an $82,000 after-tax loss from discontinued operations, compared with $154,000 a year ago.
c. Total company sales, including $155.1 million in membership fees, up 11.2 percent from $139.4 million the preceding year.
d. 12-month results include a $7 million provision for credit card claims; a $7.2 million charge for lease accounting corrections; a $9.4 million gain on contingent lease obligations, compared with $4.5 million in 2003; a $2.2 million loss from discontinued operations, compared with $676,000 in 2003. 2003 results include a $1.3 million charge stemming from a change in accounting.
|Oper. Income (EBIT)||85,869||76,387||12.4|
|Per share (diluted)||0.67||0.70||-4.3|
|Average gross margin||10.0%||9.5%||--|
|Oper. Income (EBIT)||200,554||172,574||16.2|
|Per share (diluted)||1.63||1.47||10.9|
|Average gross margin||8.3%||8.2%||--|