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BJ's beats expectations

Food continues to be strong category

WESTBOROUGH, Mass. — Strong performances in key categories and higher gas profitability helped BJ’s Wholesale Club exceed its earnings guidance for the second quarter.

The company reported net income for the period ended July 30 of $45.7 million, or 84 cents per diluted share. The company's guidance called for net income in the range of $40.5 to $42.5 million and earnings in the range of 74 cents to 78 cents per diluted share. For second quarter 2010, BJ's reported net income of $35.8 million, or 67 cents per diluted share.

As previously reported, BJ's net sales for second quarter 2011 increased by 11% to $2.98 billion and comparable-club sales increased by 7.8%, including a contribution from sales of gasoline of 4%. Excluding the impact of gasoline, merchandise comparable-club sales increased by 3.8%.

BJ’s president and CEO Laura Sen said, “BJ’s outperformance of 10%, versus our guidance reflected favorable merchandise margins, higher gas profitability and expense savings that exceeded plan. We are very excited about our positive sales momentum for the second quarter and first half of 2011. It is clear that our members are doing more of their weekly food shopping with us. And I believe that we have tremendous opportunities to further grow our business.”

BJ's said that, excluding the impact of gasoline, member traffic was flat, following a 4% increase in last year’s second quarter. The average transaction amount increased by approximately 3%, following a 1% decline in last year’s second quarter.

Food continues to be a strong category for BJ's. Sales of food increased by approximately 5% for the second year in a row, driven primarily by an 8% increase in perishable foods, the company reported. On a two-year stacked basis, comparable-club sales of perishable foods increased by approximately 16%. General merchandise sales increased by approximately 1% for the second quarter, following a slight decrease in last year’s second quarter.

BJ's reported that its strongest comps performances came from beauty care, computer equipment, coffee, cookies, dairy, deli, lawn and garden, meat, prepared foods, produce, salty snacks and summer seasonal. Departments with weaker sales versus last year included books, televisions, toys and video games.

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