Wholesale Clubs Post Mixed Results
By Alan Wolf -- TWICE, 3/4/2009
New York — Quarterly results released today by Costco and BJ’s told a tale of two cities, with sales and earnings up for the latter but down for the former.
For Costco, price cuts and poor economic conditions contributed to a 27 percent drop in earnings during its second fiscal quarter, ended Feb. 15.
Net sales fell 1 percent to $16.5 billion for the three-month period, while comp-store sales within the U.S. also slipped 1 percent.
Net sales also fell 1 percent in February, to $5 billion, while comp sales increased 4 percent during the month, excluding the negative impact of gas price deflation,
In a statement, chief financial officer Richard Galanti said earnings took a hit as the wholesale club cut prices in pursuit of sales and market share. Profits were also squeezed by soft demand for non-food products and reduced margins, he said.
Meanwhile, BJ’s said its earnings rose 5 percent to $52.7 million during its fiscal fourth quarter, ended Jan. 31, on easier year-ago comparisons. Net sales for the period rose 3.2 percent to $2.5 billion, and comp-store sales grew 6.4 percent excluding gasoline.
For the month of February, net sales rose 2.4 percent to $670 million and comp sales increased 8.2 percent, excluding gas. Traffic was up about 7 percent and the average transaction amount increased by about 1 percent, BJ’s said.
Categories with the strongest sales gains last month included PCs, TVs and video games, while prerecorded video was among the weakest performers.
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