BJ's Net Falls 81 Percent in Fourth Quarter
March 2, 2011,
WESTBOROUGH, Mass.-Rising expenses, including costs related to the closure of some of its clubs, slashed BJ's Wholesale Club's fourth-quarter net income by 81 percent, to $10.2 billion.
Selling, general and administrative expenses jumped 12 percent in dollars and 37 basis points as a percentage of sales, to 8.2 percent. BJ's bottom line was also hurt by $41.1 million in charges from club closures, restructuring activities and asset impairment. Its gross margin dropped 159 basis points to 11.2 percent due to a 7.4 percent rise in cost of sales.
These expenses offset a 7.3 percent pickup in BJ's total revenues to $3 billion for the quarter, which ended on Jan. 29. Among the positives from the quarter, according to Laura Sen, president and chief executive officer, was growth in member visits, member renewals and sales of perishable food.
For the fiscal year, BJ's reported net income of $95 million, down 28 percent from the prior fiscal year. Total revenues rose 8.2 percent to $10.9 billion.