BJ's Wholesale Club Announces Fourth Quarter and Full Year Results

Business Wire, March 5, 2008

NATICK, Mass. -- BJ's Wholesale Club, Inc. (NYSE: BJ) today reported net income of $50.2 million, or $0.80 per diluted share, for the fourth quarter of 2007. These results exceeded the Company's guidance of $0.70 to $0.74 per diluted share which was given on January 10, 2008 in conjunction with the Company's December sales announcement. The favorable net income results were due primarily to strong January sales, favorable merchandise margin rates, strong gasoline profitability and expenses coming in slightly lower than projected.

For the fourth quarter of 2006, the Company reported net income of $11.9 million, or $0.18 per diluted share. These results included unusual income and expense items resulting in a net expense of $0.40 per diluted share. On a per diluted share basis, the unusual items were comprised of the following:

* $0.06 of income from the fifty-third week,

* $0.02 of expense related to the Company's ProFoods Restaurant Supply operations and

* various other expenses totaling $0.44, which included:

* $0.23 in closing costs for ProFoods,

* $0.08 for asset impairment charges,

* $0.07 for pharmacy closing costs,

* $0.04 for severance expense and

* $0.02 to increase the Company's credit card claim reserve.

Excluding the foregoing unusual items, on a non-GAAP basis, adjusted net income for the fourth quarter of 2006 would have been $0.58 per diluted share.

For the full year 2007, net income was $122.9 million, or $1.90 per diluted share. These results included, on a per diluted share basis, unusual income of $0.05 for favorable state income tax audit settlements, $0.04 for a ProFoods lease reserve adjustment and $0.01 from the sale of pharmacy assets during the first quarter. Adjusting for the foregoing items which totaled to income of $.10 per diluted share, adjusted net income on a non-GAAP basis would have been $1.80 per diluted share for 2007.

For the full year 2006, net income was $72.0 million, or $1.08 per diluted share. On a per diluted share basis, these results included unusual income and expense items resulting in a net expense of $0.42 per diluted share. The unusual items were comprised of the following:

* $0.08 of expense related to the Company's ProFoods operations,

* $0.06 of income from the 53rd week,

* $0.03 of income for House2Home bankruptcy claim recoveries,

* $0.23 in closing costs for ProFoods,

* $0.07 for asset impairment charges,

* $0.06 for pharmacy closing costs,

* $0.04 for severance expense, and

* $0.02 of expense to increase our credit card claim reserve.

Excluding the foregoing unusual items, net income on a non-GAAP basis would have been $1.50 per diluted share for 2006.

Net sales for the fourth quarter of 2007, which included 13 weeks of sales versus 14 weeks of sales in 2006, rose by 1.9% to $2.4 billion. Comparable club sales for the fourth quarter, based on 13 weeks of sales in both years, increased by 5.4%, including a favorable impact from sales of gasoline of 2.4%, and a negative impact from the absence of pharmacy sales of 0.4%. On a comparable club basis, merchandise sales excluding gas and pharmacy increased by 3.4%.

Net sales for 2007, which included 52 weeks versus 53 weeks in 2006, increased by 6.2% to $8.8 billion. Comparable club sales for 2007, which included 52 weeks in both years, increased by 3.7%, including a favorable impact from sales of gasoline of 1.1%, and a negative impact from the absence of pharmacy sales of 0.4%. On a comparable club basis, merchandise sales excluding gas and pharmacy increased by 3.0%.

During the fourth quarter, the Company purchased approximately 4.0 million shares of BJ's common stock at an average cost of $29.98 per share, for a total expenditure of $118.5 million. For the year, BJ's repurchased approximately 7.2 million shares of common stock at an average cost of $31.98 per share for a total expenditure of $229 million. As of February 2, 2008, the end of the fiscal year, approximately $175 million remained available for repurchase under the existing Board authorization.

In a separate release, the Company also announced today its sales results for February 2008.

Conference Call Information for Fourth Quarter and Year-End Financial Results

As previously announced, at 8:30 a.m. Eastern Time today, BJ's management plans to hold a conference call to review fourth quarter and fiscal year results for 2007 and to discuss its outlook for 2008. To access the webcast, visit www.bjsinvestor.com/medialist.cfm to hear the call live, or to listen to an archive of the call, which will be available for approximately ninety days following the call.

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 177 BJ's Wholesale Clubs in 16 states. BJ's press releases and filings with the SEC are available on the Internet at www.bjsinvestor.com.

Non-GAAP Measures

This press release includes the non-GAAP financial measure of adjusted net income. Management uses this non-GAAP measure internally in reviewing the Company's performance and believes that the presentation of adjusted net income aids investors' understanding of historical and expected financial results and in the comparability of financial information from period to period. Specifically, management believes that the income related to favorable income tax audit settlements, the Pro Foods lease reserve adjustment and the sale of pharmacy assets in 2007, as well as the income from the House2Home bankruptcy claim recovery, and expenses for closing its ProFoods and pharmacy operations, severance and credit card reserve adjustments in 2006, are outside the ordinary course of the Company's business, and that such income and expenses will not recur, that the adjustments relating to results from particular arrangements put in place as part of the Company's 1997 spin-off are not indicative of the Company's ongoing operations, and that the credit card provisions relate to specific events that are not reasonably likely to recur. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP.