BJ’s Wholesale Club Announces Second Quarter Results

BJ’s Wholesale Club, Inc. (NYSE: BJ) today reported net income for the second quarter ended August 1, 2009 of $35.1 million, or $0.64 per diluted share. For the second quarter of 2008, the Company reported net income of $36.5 million, or $0.61 per diluted share. Results for the second quarter of 2008 included income of $2.0 million post-tax, or $0.03 per diluted share, related to favorable state income tax audit settlements.

For the first half of 2009, net income was $59.4 million, or $1.09 per diluted share. For the first half of 2008, net income was $53.7 million, or $0.90 per diluted share. Results for the first half of 2008 included post-tax income of $2.0 million, or $0.03 per diluted share, related to favorable state income tax audit settlements.

Total sales for the second quarter ended August 1, 2009, decreased by 5.2% to $2.5 billion, and comparable club sales decreased by 7.7%, including a negative impact from sales of gasoline of 10.6%. Excluding the impact of gasoline, merchandise comparable club sales for the second quarter of 2009 increased by 2.9%. For the second quarter of 2008, the Company reported a comparable club sales increase of 15.5%, including a contribution from sales of gasoline of 8.1%. Excluding the impact of gasoline, merchandise comparable club sales for the second quarter of 2008 increased by 7.4%.

Company Updates Guidance for the Full Year

The Company today also updated sales and earnings guidance. For the year ending January 30, 2010, the Company now expects to report an increase in net sales of 0.5% to 1.5% and a decrease in comparable club sales of 1% to 3%, including a negative impact from gasoline sales of 6% to 8%. Merchandise comparable club sales excluding gasoline are expected to increase 4% to 6%. Previous sales guidance, provided during the Company’s first quarter conference call on May 20, 2009, was for an increase in net sales of 0.6% to 2.6%, and a decrease in comparable club sales of 2.5% to 0.5%, including a negative impact from gasoline sales of 6.5% to 8.5%. Merchandise comparable club sales excluding gasoline were expected to increase 5% to 7%.

For the full year ending January 30, 2010, the Company now expects to report net income in the range of $134 to $140 million, and diluted earnings per share in the range of $2.46 to $2.56. Previous guidance, also provided during the Company’s first quarter conference call on May 20, 2009, was for net income in the range of $132.7 million to $138.2 million, and diluted earnings per share in the range of $2.44 to $2.54.

Conference Call Information for Second Quarter Financial Results

As previously announced, at 8:30 a.m. Eastern Time today, BJ’s management plans to hold a conference call to review second quarter results and to discuss its outlook for the remainder of 2009. To access the webcast, visit http://www.bjsinvestor.com/events.cfm to hear the call live, or to listen to an archive of the call, which will be available for approximately 90 days.

About BJ’s Wholesale Club

BJ’s introduced the wholesale club concept to New England in 1984, and has since expanded to become a leading warehouse chain in the eastern United States. The Company currently operates 184 BJ’s Wholesale Clubs in 15 states. BJ’s press releases and filings with the SEC are available on the Internet at www.bjsinvestor.com.

Forward-Looking Statements

Statements contained in this press release, including earnings guidance, that are not purely historical are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements. Factors that may cause or contribute to such differences include, without limitation, levels of gasoline profitability, levels of customer demand, economic and weather conditions, federal, state and local regulation in the Company’s markets, federal budgetary and tax policy, litigation, competitive conditions and other factors discussed in the Company’s Annual Report on SEC Form 10-K for the fiscal year ended January 31, 2009. Any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
STATEMENTS OF INCOME (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
						Thirteen Weeks Ended									Twenty-Six Weeks Ended
						August 1,				August 2,					August 1,				August 2,
						2009				2008					2009				2008
Net sales					$	2,507,010			$	2,644,380				$	4,765,608			$	4,897,508
Membership fees						45,255				44,348					89,642				88,362
Other revenues						13,869				13,952					24,855				24,566
	Total revenues					2,566,134				2,702,680					4,880,105				5,010,436
Cost of sales, including buying and occupancy costs						2,287,388				2,443,218					4,353,405				4,533,391
Selling, general and administrative expenses						215,675				201,401					420,807				389,323
Preopening expenses						3,793				129					5,362				661
Operating income						59,278				57,932					100,531				87,061
Interest income (expense), net						(116	)			484					(251	)			605
Income from continuing operations before income taxes						59,162				58,416					100,280				87,666
Provision for income taxes						23,991				21,769					40,685				33,674
Income from continuing operations						35,171				36,647					59,595				53,992
Loss from discontinued operations, net of income taxes						(106	)			(156	)				(194	)			(312	)
Net income					$	35,065			$	36,491				$	59,401			$	53,680
Basic earnings per common share:
		Income from continuing operations			$	0.66			$	0.62				$	1.11			$	0.92
		Loss from discontinued operations				(0.01	)			-					-				(0.01	)
		Net income			$	0.65			$	0.62				$	1.11			$	0.91
Diluted earnings per common share:
		Income from continuing operations			$	0.64			$	0.61				$	1.09			$	0.90
		Loss from discontinued operations				-				-					-				-
		Net income			$	0.64			$	0.61				$	1.09			$	0.90
Number of common shares for earnings per share computations:
		Basic				53,608,984				58,818,828					53,590,792				58,769,313
		Diluted				54,577,519				59,809,560					54,551,503				59,750,522
BJ's clubs in operation - end of period						183				178

	BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
	CONDENSED BALANCE SHEETS (Unaudited)
	(Dollars in Thousands)
							August 1,			August 2,
							2009			2008
	ASSETS
	Current assets:
	Cash and cash equivalents					$	37,006		$	116,450
	Accounts receivable						115,607			115,719
	Merchandise inventories						889,828			833,488
	Current deferred income taxes						13,192			28,254
	Prepaid expenses						28,018			27,105
	Total current assets						1,083,651			1,121,016
	Property, net of depreciation						927,374			868,189
	Deferred income taxes						6,404			3,495
	Other assets						23,685			22,741
	TOTAL ASSETS					$	2,041,114		$	2,015,441
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Current liabilities:
	Current installments of long-term debt					$	587		$	547
	Accounts payable						626,865			608,855
	Closed store lease obligations						1,748			1,948
	Accrued expenses and other current liabilities						287,012			295,022
	Total current liabilities						916,212			906,372
	Long-term debt, less portion due within one year						849			1,436
	Noncurrent closed store lease obligations						8,852			9,655
	Other noncurrent liabilities						108,336			112,436
	Stockholders' equity						1,006,865			985,542
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY					$	2,041,114		$	2,015,441

	BJ's Wholesale Club, Inc. and Consolidated Subsidiaries
	CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
	(Dollars in Thousands)
								Twenty-Six Weeks Ended
								August 1,				August 2,
								2009				2008
	CASH FLOWS FROM OPERATING ACTIVITIES
	Net income						$	59,401			$	53,680
	Provision for club closing costs							135				146
	Depreciation and amortization							54,541				53,047
	Share-based compensation expense							10,583				9,511
	Deferred income taxes							2,373				(1,088	)
	Decrease in merchandise inventories, net    of accounts payable							7,447				38,930
	Decrease in closed store lease obligations							(815	)			(844	)
	Other							1,802				(21,988	)
	Net cash provided by operating activities							135,467				131,394
	CASH FLOWS FROM INVESTING ACTIVITIES
	Property additions							(87,486	)			(49,060	)
	Property disposals							-				124
	Purchase of marketable securities							(436	)			(245	)
	Sale of marketable securities							31				349
	Net cash used in investing activities							(87,891	)			(48,832	)
	CASH FLOWS FROM FINANCING ACTIVITIES
	Excess tax benefit from exercise of stock options							988				3,068
	Borrowing of short-term debt							-				-
	Purchase of treasury stock							(70,391	)			(87,307	)
	Proceeds from issuance of common stock							7,955				21,074
	Dividends paid							-				-
	Repayment of long-term debt							(279	)			(261	)
	Net cash used in financing activities							(61,727	)			(63,426	)
	Net increase (decrease) in cash and cash equivalents						$	(14,151	)		$	19,136

NOTE TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1.	In last year's second quarter, the Company recorded post-tax income of $2.0 million, or $.03 per
	diluted share, as a result of favorable state income tax audit settlements.