WESTBOROUGH, Mass. — BJ's Wholesale Club here last week reported quarterly sales that were higher than expected as consumers worried about rising gas prices made more trips and bought more food at BJ's during the 13-week first quarter that ended April 30.
Sales of perishable foods were particularly high, and revenue from increased membership fees also contributed to what Laura Sen, BJ's chief executive officer, called a “great start” to its 2012 fiscal year. Overall sales increased 10% to $2.8 billion, with comp sales excluding gasoline improving by 2.4%. Net earnings of $33.7 million improved 29% and exceeded the company's own estimates of $29.5 million to $31.5 million. Sales were expected to rise by 7.5%.
“Our stronger-than-expected performance for the first three months of 2011 reflects net sales above plan, continued margin expansion and excellent cost control,” Sen said.
While significantly higher gas prices resulted in more traffic for BJ's — gasoline comps increased 9% while dollars increased 39% as gas prices surged beyond the $4-per-gallon mark — it also raised caution among consumers, Sen noted. General merchandise sales were down by 1% in the quarter, and there was some trading down within various categories, she said.
“The discretionary dollar is pressured when we see these kinds of fuel prices,” she said.
Excluding the effect of gasoline sales, traffic increased by 2% and average transaction size increased by 1% compared with the same period a year ago. Comparable-club sales of food increased by 4%, and perishable food sales improved by 8%. Perishable foods accounted for 31% of sales in the quarter, up from 29% in last year's first quarter, helping BJ's post higher merchandise margins, excluding gasoline.
Sen said BJ's would continue to benefit as shoppers look for better values in response to price inflation and high fuel prices. BJ's, she said, was passing along its cost increases at the same rate as competitors in the club space.
“I absolutely believe that in times like this we do better than any other channel because people come to us when they're feeling pressured in terms of their budget for staple items, which are all what the lion's share of what we sell,” she said. “And our opportunity is very ripe as we move forward.”
Officials did not address BJ's ongoing review of strategic alternatives, including a potential sale, as disclosed earlier this year.
