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BJ's Sales Rise, Income Slides

11/18/2003 09:15:00 AM Eastern

Natick, Mass. - Although warehouse retailer BJ's Wholesale Club enjoyed a fiscal third quarter increase in both overall sales and comp-store sales, net income for the three months decreased, primarily due to price reductions on a number of products.

Third quarter sales rose 18.2 percent, hitting $1.6 billion, up from $1.4 billion in the year-ago period. Same-store sales climbed 11.3 percent.

BJ's reported net income of $20.4 million in the third quarter, ended Nov. 1, compared with $23.4 million in the same three months in 2002.

Net income for the 2003 third quarter included a post-tax gain of $600,000 related to lease obligations for home improvement retailer House2Home, which filed for bankruptcy in 2001. BJ's had been spun off from House2Home four years earlier.

Net income for the third quarter of 2002 included post-tax club closing charges of $12.6 million and asset impairment charges of $1.1 million. These charges were partially offset by a post-tax gain of $12 million from House2Home lease adjustments.

BJ's, which has been including higher margin merchandise, such as plasma televisions, in its mix, as well as reducing prices, posted a nine month sales increase of 15.9 percent, hitting $4.7 billion, up from $4 billion in the same period a year ago. Comp-store sales increased 7.9 percent.

In the first nine months, income hit $54.9 million before the cumulative effect of accounting changes. Including changes, net income was $53.7 million. In the first nine months of 2002, net income came in at $82.4 million.

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