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FRESH FOOD, PRIVATE LABEL DRIVE SALES GAIN AT BJ'S
NATICK, Mass. -- Strong performance among private-brand items and fresh foods drove revenues at BJ's Wholesale Club here, up 9.3% to $2 billion during the fiscal third quarter that ended Oct. 31, the company said last week.Comparable-store food sales at BJ's increased 4% during the quarter, with fresh produce sales growing 30%, Michael Wedge, president and chief executive officer, said in a conference
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JON SPRINGER
NATICK, Mass. -- Strong performance among private-brand items and fresh foods drove revenues at BJ's Wholesale Club here, up 9.3% to $2 billion during the fiscal third quarter that ended Oct. 31, the company said last week.
Comparable-store food sales at BJ's increased 4% during the quarter, with fresh produce sales growing 30%, Michael Wedge, president and chief executive officer, said in a conference call. Overall comp-club sales gained 4.1%, but 0.8% excluding gasoline, reflecting flat sales of general merchandise and reduced store traffic.
"We have now been running the produce business for a year, and while we are proud of the improvements we have delivered in pricing quality and sales, we know we still have huge opportunities for improvements ahead of us," Wedge said.
Prepared foods under the Wellesley Farms private label experienced double-digit comp increases, Wedge added, and a new frozen gourmet store brand, World Connoisseur, launched during the quarter. Consumable categories including juices, soda, water and paper products also achieved double-digit comp sales increases during the quarter, Wedge added. "We still have a lot of opportunity in fresh, and you can expect to see additional refrigerated cases added to our clubs to support this expanding business," Wedge said.
Earnings of $27.8 million, or 41 cents a share, were up from $23.3 million, or 33 cents, a year ago.
BJ's adjusted its fourth-quarter and full-year earnings guidance downward, citing a sales gain slightly lower than expected and higher fuel and marketing costs. It expects full-year earnings of $1.85 to $1.89 per share, vs. earlier forecasts of $1.85 to $1.91.
Paul McDonough, BJ's chief financial officer, noted that competitive openings and self-cannibalization accounted for negative sales impacts of between 1.5% and 2% during the quarter.
McDonough added that BJ's will raise its annual membership fees by $5 starting in January. Competitor Sam's Club, a division of Wal-Mart Stores, Bentonville, Ark., also said recently that it would raise fees by $5.
Wedge said the club experienced "slight" attrition in renewal rates as a result of fee increases twice over the last 10 years.
