BJ's makes sales strides - B J's Wholesale Club Inc - Brief Article

DSN Retailing Today, March 22, 2004 by Mike Duff

NATICK, MASS. -- BJ's made significant strides in improving key elements of the operation and, as a result, enjoyed a strong fiscal 2003, said ceo Mike Wedge during a March 2 conference call.

In fiscal 2003, sales grew 14.9% to $6.6 billion while comparable-club sales gained 7.8%. BJ's net income before the cumulative effect of accounting changes was $104.1 million, or $1.49 per diluted share, versus $130.9 million, or $1.84 per diluted share, in 2002. Including the accounting change effect, net income for 2003 was $102.9 million, or $1.47 per diluted share. The company gained $0.05 per diluted share last year, while it gained $0.17 in fiscal 2002 due to reduction of the House2Home reserve. BJ's retooled pricing in fiscal 2003 as it expanded food and perishables operations to make it more competitive across trade channels, impacting EPS.

Among the areas where Wedge cited progress was merchandising. "We increased the number of rotisserie chicken and deli departments in the chain and introduced a line of premium prepared foods under our Wellesley Farms label. With regard to selection, we introduced smaller package sizes, which we refer to as Life Sizes, in a number of perishables departments such as seafood, dairy, meat and bakery to appeal to smaller households," he said. Some remodeled stores next year will move tire departments to make way for expanded fresh food.

In fiscal 2004, BJ's will add 10 to 12 new clubs in existing markets and build on current initiatives. It will open a second concept store within 12 months to test a new generation of initiatives to keep its momentum going. Its first concept store opened recently in Kissimmee, Fla.