NATICK, Mass. -- BJ's Wholesale Club here said last week food was its primary driver of sales and store traffic in the third quarter.
During a conference call with industry analysts to discuss results for the quarter and 39 weeks ended Nov. 1, Frank Forward, BJ's chief financial officer, said comparable-club food sales were up 9% in the quarter, "driven by double-digit increases in fresh foods, including meat, prepared food and produce."
Forward also noted that the company had "better-than-anticipated margins in fresh foods" because of food-price inflation.
Mike Wedge, BJ's president and chief executive officer, said the company continued its rollout of specialty food departments during the quarter, and now has 29 delis, with two more expected to open by year's end, and 50 rotisserie chicken departments, with 10 more scheduled to open by year's end.
Wedge said he expected food to temporarily become a less important business draw in the fourth quarter. "Post-Thanksgiving, general merchandise becomes the driver," he said.
For the 13-week quarter, net sales rose 18.2% to $1.6 billion, comps increased 11.3%, net income declined 12.8% to $20.4 million (in part because of a 20.9% increase in selling, general and administrative expenses), and earnings per share were 29 cents, vs. 33 cents in last year's third quarter.
In the 39-week period, net sales were up 15.9% to $4.7 billion, comps grew 7.9%, net income fell 35% to $53.6 million (as SG&A surged 21.3%), and earnings per share were 79 cents, vs. $1.15 in last year's comparable period.