Food, Shrink Improvement Drive BJ’s Q1

NATICK, Mass. — Improvements in fresh food presentation and shrink control, along with a continuing consumer flight to value, brought store traffic to a five-year high and boosted quarterly earnings at BJ’s Wholesale Club here, officials said Wednesday.

The warehouse club posted net income of $24.3 million on sales of $2.3 billion during the fiscal first quarter, which ended May 2. Overall sales were down slightly from the same period a year ago due mainly to gasoline price deflation. Excluding gasoline, comparable-store sales improved by 7.5%, with food comps increasing by 9%. Net earnings improved by 41.6% as compared to the same period last year. A 7% increase in store traffic was the chain’s highest in five years.

Net earnings of 45 cents per share was at the high end of company estimates, and the strong performance prompted the company to raise its earnings guidance for the full year by two cents. However, BJ’s noted the strong quarter accounted for most of the upgrade and that sales comparisons would be difficult for the remainder of the year as it laps spikes in gasoline sales and profitability over the last year. Its stock was down by more than 4% Wednesday.

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