NATICK, MA–Despite tight credit that could affect its partners, BJ’s Wholesale Club will increase its store growth next year, opening six to eight new stores in existing markets, executives said at the company’s third quarter conference call.
Three units will open in the fourth quarter, for a total of four for this year. But next year will nearly double that growth, despite financing problems.
“We may be cautious with our share repurchase to make sure we can fund chain expansion as needed,” said Laura Sen, president.
Net sales for the third quarter of 2008 were approximately $2.4 billion, an increase of 13.4% over the third quarter of 2007. Aided by high gas prices during the quarter, the company reported net income of $28.2 million, compared to net income of $22.7 million.
“Since we started selling gasoline in 1998, we have never seen such market conditions,” said Frank D. Forward, CFO.
Comparable store sales excluding gas rose 6.6%, with a total comp increase of 11.9%. Food comp sales rose approximately 11% as shoppers move from supermarkets and eating out.
“It is clear that we are capturing a bigger share of our member’s grocery budget and we believe that we are benefiting from a decline in casual restaurant dining,” Sen said.
General merchandise sales declined approximately 1%, with television sales hit particularly hard. The company expects this pattern to hold in the fourth quarter, with strong food sales offsetting weaker general merchandise sales.
BJ’s currently operates 177 clubs in 15 states.