Sept. Comps for Wal-Mart, Costco, BJ's Hurt by Lower Gas Prices

NEW YORK - Lower gas prices led to lower than expected performance in September for three meg-retailers Wal-Mart, Costco, and BJ's, the chains said yesterday.

BJ's Wholesale Club here yesterday reported that September 2006 sales went up by 2.1 percent to $751.0 million, from $735.8 million last year; but added that on a comparable-club basis, sales for the month declined 0.9 percent, including a negative impact from lower gasoline sales of 0.3 percent.
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In the year-ago period the retailer posted a comparable-club sales hike of 3.8 percent, including a contribution from gas sales of 3.2 percent.

Comparable-club food sales were essentially flat vs. last year, and general merchandise sales dipped about 1 percent. Strong categories compared to last year included paper products, personal health, plastic bags, and produce, while among the weaker categories compared with last year were fresh meat, apparel, DVDs, and jewelry.

For October 2006, the company is predicting comparable-club sales in the range of flat to plus 2 percent, including a negative effect from gasoline sales of about 2 percent to 3 percent. In October 2005 BJ's reported a comparable-club sales increase of 2.9 percent, including a contribution from gas sales of about 3.3 percent.

At Wal-Mart, comparable sales for the month rose 1.3 percent for Wal-Mart Stores and 1.1 percent for Sam's Club, as opposed to 2.9 percent and 6.4, respectively, in the year-ago period. According to the retailer, fuel sales affected the Sam's Club and total U.S. comparable-sales figures for the month, by -1.7 and -0.3 percentage points, respectively. Net sales were $20.1 billion for Wal-Mart Stores and $3.8 billion for Sam's Club, increases of 7.9 percent and 1.2 percent, respectively.

Noted e.v.p. and c.f.o. Tom Schoewe: "Our apparel sales did not meet our expectations for the month. We're pleased, however, to see early response to seasonal merchandise for fall and the holidays. We are optimistic about holiday-related merchandise like toys and electronics." Schoewe added that stores and clubs this year were adversely affected by comparisons to last September's comparable-sales numbers from the hurricanes.

According to retail analyst Richard Hastings at Bernard Sands: "Weaker demand for big-ticket items and flat panels clearly hurt sell-through at Sam's Club, to a greater degree than it did at Costco, which is also seeing the negative drag from lower gas prices and a changing sales mix in their clubs. More importantly, earnings at Wal-Mart are currently holding up as their supermarkets continue to offset weakness in other areas."

Lower gas prices led to lower than expected comparable store sales for warehouse club retailer Costco Wholesale Corp., which increased 4 percent for the five week period ending October 1. Comparable store sales for warehouse club retailer Costco Wholesale Corp., which increased 4 percent for the five-week period ending October 1.

While comparable sales increased only 3 percent domestically, they rose 12 percent at Costco's international stores.

Costco's net sales were $5.56 billion for the month, an increase of 8 percent from $5.14 billion last year.

Costco operates 488 warehouses, including 359 in the United States and Puerto Rico, 68 in Canada, 18 in the United Kingdom, five in Korea, four in Taiwan, five in Japan, and 29 in Mexico. The Company also operates Costco Online, an electronic commerce Web site, at and at in Canada. The company plans to open an additional 15 to 16 new warehouses prior to the end of calendar year 2006.
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