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BJ's Wholesale Club Inc. reported a nearly 26 percent increase in its first-quarter profit and raised earnings expectations for the full year, reaping the benefits of a tough economy that's increasingly sending shoppers to discounters in search of deals.The nation's third-largest discount warehouse club said Wednesday it earned $17.19 million, or 29 cents per share, in the three months ended May 3. That's up from a profit of $13.65 million, or 21 cents per share, a year ago, when results were boosted a penny per share from the asset sales after BJ's closed 46 in-store pharmacies.
The latest profit beat by a penny per share the consensus estimate of analysts surveyed by Thomson Finanical.
Sales grew 12 percent from $2.06 billion to $2.26 billion, slightly below analysts' forecast of $2.27 billion. Sales) at clubs open at least a year rose 9.6 percent, with gasoline sales accounting for more than a third of the gain.
The Natick, Mass.-based chain of 177 clubs in 16 East Coast states now expects to post a full-year profit of $2.04 to $2.14 per share, a range that's 6 cents per share above the company's previous expectations offered in March. Analysts expect BJ's to post a full-year profit of $2.06 per share, near the lower end of BJ's updated guidance.
It was the second time since November that BJ's has raised its 2008 earnings expectations amid a retail environment that's also benefiting larger rivals Costco Wholesale Corp. and Wal-Mart Inc.'s Sam's Club. Warehouse clubs have benefited in the economic slowdown as more cost-conscious consumers buy goods in bulk in response to higher food and gas prices.
The clubs' low fuel prices also have enticed members to fill up on gas while also stocking up on merchandise, although the clubs' gas profit margins are typically low.
Its shares rose 40 cents to $39.25 in premarket trading.
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