Post-tax Expenses Eat Into BJ’s Q4, FY ’11 Net Income

BJ’s Wholesale Club Inc. has posted net income of $10.2 million, or 19 cents per diluted share, for the fourth quarter ended Jan. 29, 2011, including post-tax expense of $41.1 million for club closures, restructuring activities and asset impairment charges. Excluding the post-tax expense, adjusted non-GAAP net income was $51.3 million, or 95 cents per diluted share.

For the year ended Jan. 29, the Westborough, Mass.-based company, which operates 190 clubs in 15 states, reported net income of $95.0 million, or $1.77 per diluted share. Excluding the post-tax expense mentioned above, net income for the fiscal year was $136.1 million, or $2.53 per diluted share.

BJ’s president and CEO Laura Sen noted that the results were the result of “continued margin expansion and excellent cost control. Consistent growth in member visits, membership renewals and sales of perishable food demonstrate that BJ’s is continuing to capture market share from other retail channels.”

For the fourth quarter ended Jan. 30, 2010, the company posted net income of $54.5 million, or $1 per diluted share, including post-tax income of $3.5 million, or 6 cents per diluted share related to payments BJ’s received from a class action settlement involving credit card interchange fees charged by MasterCard and Visa, and income from an adjustment to legal reserves. Excluding the post-tax income, net income was $51.0 million, or 94 cents per diluted share.

For the year ended Jan. 30, 2010, BJ’s net income was $131.3 million, or $2.40 per diluted share, which, in addition to the two income items mentioned above in connection with the fourth quarter, included post-tax expense of $6.9 million, or 13 cents per diluted share to establish a reserve in connection with a proposed settlement of a legal claim. Excluding all of these items, net income for fiscal 2009 was $134.7 million, or $2.46 per diluted share.

Net sales for the fourth quarter ended Jan. 29 rose 7.4 percent to $2.90 billion, and comparable-club sales grew 3.8 percent, including a contribution from sales of gasoline of 2.1 percent. Excluding the impact of gas sales, merchandise comps increased 1.7 percent for the quarter. For the year ended Jan. 29, net sales went up 8.3 percent to $10.63 billion and comps increased 4.4 percent including a contribution from sales of gas of 2.0 percent. Excluding the impact of gas sales, merchandise comps rose 2.4 percent for the full year.

Excluding the impact of gas sales, member traffic grew 2 percent for the fourth quarter and 3 percent for the year. The average transaction amount was essentially flat for the fourth quarter and dipped about 1 percent for the year.

Food sales increased 2 percent for the fourth quarter and 4 percent for the year, while general merchandise sales rose 1 percent for the fourth quarter and decreased by about 1 percent for the year.

For the fourth quarter, departments with the strongest comp sales increases compared with last year included bakery, cheese, dairy, deli, frozen, health and wellness, meat, milk, prepared foods, produce, small appliances, summer seasonal, video games and winter supplies. Among the weaker departments vs. last year were apparel, baby food, books, cigarettes, diapers, plates and utensils, paper products, prerecorded video, televisions and water.