BJ's Sales Rise 13.9% In Q2; Profit Down

By Staff On Sep 15 2003 - 6:00am

Encouraged by recent sales trends, BJ's Wholesale Club recorded fiscal second quarter sales of $1.6 billion, a 13.9 percent increase over the $1.4 billion reported in the year-ago period. Comp-store sales jumped 6.6 percent in the second quarter, ended Aug. 2, including a 3.6 percent contribution from gasoline sales.

Net income for the second quarter, however, dropped 39 percent, to $22 million, down from $35.9 million in the second quarter of 2002. The company cited markdowns and higher expenses for the lower profit picture. Also, the $22 million included a post-tax gain of $400,000 for reducing the company's reserves for House2Home lease obligations.

In the first half, BJ's sales climbed 14.7 percent, hitting $3.1 billion, up from $2.7 billion in the same period a year ago. Comp-store sales in the second half rose 6.2 percent, including a 4.1 percent contribution from gasoline sales.

Cost of second quarter sales, that included buying and occupancy costs, increased to $1.5 billion, up 16 percent from the $1.3 billion reported in the same three months a year ago. Selling, general and administrative expenses jumped 23 percent, to $126.3 million, compared with $102.7 million year-on-year.

Second-half net income came in at $33.2 million, down from $59 million in the comparable period in 2002. Income for the first six months of this year included a charge of $1.3 million for changes in financial accounting and a post-tax gain of $1.1 million as a result of reserve reductions for House2Home lease obligations.

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