Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - BJS WHOLESALE CLUB INC | d8k.htm |
Exhibit 99.1
| FOR IMMEDIATE RELEASE | Contact: Cathy Maloney | |||
| VP, Investor Relations | ||||
| 774-512-6650 | ||||
| cmaloney@bjs.com |
BJ’S WHOLESALE CLUB ANNOUNCES EARNINGS FOR FIRST QUARTER 2011
Updates Earnings Guidance for Fiscal 2011
WESTBOROUGH, MA – May 18, 2011 – BJ’s Wholesale Club, Inc. (NYSE: BJ) today reported net income of $33.7 million, or $0.62 per diluted share, for the first quarter ended April 30, 2011. Results for the first quarter of 2011 exceeded the Company’s guidance for net income in the range of $29.5 million - $31.5 million, or $0.54 - $0.58 per diluted share.
BJ’s president and chief executive officer, Laura Sen, said, “BJ’s is off to a great start in 2011. Our stronger than expected performance for the first three months of 2011 reflects net sales above plan, continued margin expansion and excellent cost control. I am very proud of our team members in the field, distribution centers and home office for delivering another great quarter.”
Sales Results for First Quarter Ended April 30, 2011
Net sales for the first quarter of 2011 increased by 10.0% to $2.77 billion and comparable club sales increased by 6.3%, including a contribution from gasoline sales of 3.9%. Merchandise comparable club sales excluding gasoline increased by 2.4%.
The Company provided the following additional information regarding comparable club sales for the first quarter (all comparisons are to the comparable, prior year period):
| • | Comparative Club Sales by Geographic Region |
| Thirteen Weeks Ended April 30, 2011 | ||||||||||||
| Comparable Club Sales | Impact of Gasoline Sales |
Merchandise Comparable Club Sales |
||||||||||
| New England |
4.0 | % | 4.3 | % | (0.3 | )% | ||||||
| Upstate New York |
8.2 | % | 5.8 | % | 2.4 | % | ||||||
| Metro New York |
3.1 | % | 1.1 | % | 2.0 | % | ||||||
| Mid Atlantic |
6.5 | % | 4.2 | % | 2.3 | % | ||||||
| Southeast |
11.6 | % | 5.0 | % | 6.6 | % | ||||||
| Total chain |
6.3 | % | 3.9 | % | 2.4 | % | ||||||
| • | Competition and cannibalization had a negative impact of approximately 2%. |
| • | Excluding the impact of gasoline, member traffic increased by approximately 2% and the average transaction amount increased by approximately 1%. |
-More-
BJ’s Wholesale Club, Inc.
May 18, 2011
Page 2
| • | Sales of food increased by approximately 4%, following a 6% increase in last year’s first quarter, driven primarily by an 8% increase in perishable foods. On a two-year basis, comparable club sales of perishable foods increased by approximately 16%. General merchandise sales decreased by approximately 1% for the first quarter, following an increase of approximately 1% in last year’s first quarter. |
| • | Departments with the strongest comparable club sales increases included bakery, dairy, deli, frozen, health & wellness, meat, milk, prepared foods, produce and small appliances. Weaker departments versus last year included apparel, books, cigarettes, diapers, prerecorded video and televisions. |
Revised Earnings Guidance for the Fiscal Year Ending January 28, 2012
For the year ending January 28, 2012, the Company now expects to report net income in the range of $147 million to $157 million, and earnings per diluted share in the range of $2.68 to $2.88. For the second quarter ending July 30, 2011, the Company expects to report net income in the range of $40.5 million to $42.5 million and earnings per diluted share in the range of $0.74 to $0.78.
The following chart presents the detailed elements of our sales and earnings guidance for the thirteen weeks ending July 30, 2011 and fifty-two weeks ending January 28, 2012:
| Q-2 | Full Year | |||||||
| Net sales increase |
7.5% to 9.5 | % | 6.5% to 8.5 | % | ||||
| Comparable club sales increase |
4.0% to 6.0 | % | 3.5% to 5.5 | % | ||||
| Impact of gasoline on comparable club sales |
2.0% to 3.0 | % | 1.0% to 2.0 | % | ||||
| Merchandise comparable club sales increase |
1.7% to 3.7 | % | 2.0% to 4.0 | % | ||||
| Membership fee growth increase |
8.5% to 9.5 | % | 9.5% to 10.5 | % | ||||
| Depreciation Expense (in millions) |
$ | 33 to $34 | $ | 135 to $141 | ||||
| Preopening expense (in millions) |
$ | 0.0 to $0.5 | $ | 6.0 to $8.0 | ||||
| Income Tax Rate |
40.5 | % | 40.3 | % | ||||
| Net Income (in millions) |
$ | 40.5 - $42.5 | $ | 147.0 - $157.0 | ||||
| EPS - Fully Diluted |
$ | 0.74 - $0.78 | $ | 2.68 - $2.88 | ||||
First Quarter Earnings Conference Call
BJ’s management will host a conference call today at 8:30 a.m. ET to discuss information included in this press release and related matters. The conference call will be available through webcast and replay from BJ’s investor relations website at http://www.bjsinvestor.com.
-More-
BJ’s Wholesale Club, Inc.
May 18, 2011
Page 3
About BJ’s Wholesale Club
BJ’s introduced the wholesale club concept to New England in 1984 and has since expanded to become a leading warehouse chain in the eastern United States. The Company currently operates 190 BJ’s Wholesale clubs in 15 states.
Forward-Looking Statements
Statements contained in this press release, including earnings guidance, that are not purely historical are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, forward-looking statements are often characterized by the words “believes,” “anticipates,” “plans,” “estimates,” “expects” and similar expressions. Actual results may differ materially from those indicated by forward-looking statements. Factors that may cause or contribute to such differences include, without limitation, levels of gasoline profitability, levels of customer demand, economic and weather conditions, the rate of inflation or deflation, federal, state and local regulation in the Company’s markets, federal budgetary and tax policy, litigation, activities by organized labor, competitive conditions, uncertainties introduced by the Company’s February 2011 announcement that it has decided to explore and evaluate strategic alternatives, including a possible sale of the Company, our success in settling lease obligations for closed clubs, progress associated with the implementation of technology initiatives and other factors discussed in the Company’s Annual Report on SEC Form 10-K for the fiscal year ended January 29, 2011. Any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. Our forward-looking statements do not reflect the potential future impact of any merger, acquisition or disposition. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.
-See Financial Tables-
BJ’s Wholesale Club, Inc. and Consolidated Subsidiaries
STATEMENTS OF INCOME (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
| Thirteen Weeks Ended | ||||||||
| April 30, 2011 |
May 1, 2010 |
|||||||
| Net sales |
$ | 2,769,270 | $ | 2,516,376 | ||||
| Membership fees |
50,440 | 46,393 | ||||||
| Other revenues |
9,264 | 9,049 | ||||||
| Total revenues |
2,828,974 | 2,571,818 | ||||||
| Cost of sales, including buying and occupancy costs |
2,535,080 | 2,298,155 | ||||||
| Selling, general and administrative expenses |
236,911 | 226,179 | ||||||
| Preopening expenses |
10 | 1,954 | ||||||
| Operating income |
56,973 | 45,530 | ||||||
| Interest expense, net |
(395 | ) | (227 | ) | ||||
| Income from continuing operations before income taxes |
56,578 | 45,303 | ||||||
| Provision for income taxes |
22,373 | 18,439 | ||||||
| Income from continuing operations |
34,205 | 26,864 | ||||||
| Loss from discontinued operations, net of income taxes |
(539 | ) | (775 | ) | ||||
| Net income |
$ | 33,666 | $ | 26,089 | ||||
| Basic earnings per common share: |
||||||||
| Income from continuing operations |
$ | 0.64 | $ | 0.52 | ||||
| Loss from discontinued operations |
(0.01 | ) | (0.02 | ) | ||||
| Net income |
$ | 0.63 | $ | 0.50 | ||||
| Diluted earnings per common share: |
||||||||
| Income from continuing operations |
$ | 0.63 | $ | 0.50 | ||||
| Loss from discontinued operations |
(0.01 | ) | (0.01 | ) | ||||
| Net income |
$ | 0.62 | $ | 0.49 | ||||
| Number of common shares for earnings per share computations: |
||||||||
| Basic |
53,099,545 | 51,984,549 | ||||||
| Diluted |
54,051,861 | 53,311,957 | ||||||
| BJ’s clubs in operation - end of period |
190 | 188 | ||||||
BJ’s Wholesale Club, Inc. and Consolidated Subsidiaries
CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in Thousands)
| April 30, 2011 |
May 1, 2010 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 206,686 | $ | 63,647 | ||||
| Accounts receivable |
152,307 | 131,868 | ||||||
| Merchandise inventories |
988,224 | 932,623 | ||||||
| Current deferred income taxes |
18,717 | 17,577 | ||||||
| Prepaid expenses |
46,810 | 36,569 | ||||||
| Prepaid taxes |
3,205 | — | ||||||
| Total current assets |
1,415,949 | 1,182,284 | ||||||
| Property, net of depreciation |
990,181 | 966,443 | ||||||
| Deferred income taxes |
— | 11,106 | ||||||
| Other assets |
23,679 | 26,084 | ||||||
| TOTAL ASSETS |
$ | 2,429,809 | $ | 2,185,917 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Current installments of long-term debt |
$ | 381 | $ | 619 | ||||
| Accounts payable |
736,306 | 685,639 | ||||||
| Closed store obligations |
7,265 | 1,725 | ||||||
| Accrued expenses and other current liabilities |
294,713 | 294,670 | ||||||
| Total current liabilities |
1,038,665 | 982,653 | ||||||
| Long-term debt, less portion due within one year |
— | 381 | ||||||
| Noncurrent closed store obligations |
28,942 | 7,967 | ||||||
| Deferred income taxes |
17,212 | — | ||||||
| Other noncurrent liabilities |
153,900 | 137,643 | ||||||
| Stockholders’ equity |
1,191,090 | 1,057,273 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ | 2,429,809 | $ | 2,185,917 | ||||
BJ’s Wholesale Club, Inc. and Consolidated Subsidiaries
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
| Thirteen Weeks Ended | ||||||||
| April 30, 2011 |
May 1, 2010 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
||||||||
| Net income |
$ | 33,666 | $ | 26,089 | ||||
| Provision for club closing costs |
1,031 | 166 | ||||||
| Depreciation and amortization |
33,285 | 30,088 | ||||||
| Stock-based compensation expense |
4,547 | 5,345 | ||||||
| Deferred income taxes |
8,456 | 331 | ||||||
| Decrease in merchandise inventories, net of accounts payable |
71,635 | 26,373 | ||||||
| Decrease in closed store obligations |
(11,360 | ) | (419 | ) | ||||
| Other |
(12,487 | ) | (40,138 | ) | ||||
| Net cash provided by operating activities |
128,773 | 47,835 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES |
||||||||
| Property additions |
(31,914 | ) | (38,603 | ) | ||||
| Property disposals |
85 | 16 | ||||||
| Purchase of marketable securities |
— | (500 | ) | |||||
| Sale of marketable securities |
— | 1,032 | ||||||
| Net cash used in investing activities |
(31,829 | ) | (38,055 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES |
||||||||
| Excess tax benefit from stock-based awards |
944 | 252 | ||||||
| Purchase of treasury stock |
(75 | ) | (10,061 | ) | ||||
| Proceeds from stock options exercised |
7,682 | 5,072 | ||||||
| Repayment of long-term debt |
(159 | ) | (148 | ) | ||||
| Net cash provided by (used in) financing activities |
8,392 | (4,885 | ) | |||||
| Net increase in cash and cash equivalents |
$ | 105,336 | $ | 4,895 | ||||