BJ's Wholesale Club Inc. said Wednesday that its first-quarter net income rose 7 percent, partly helped by gasoline sales.
The results were better than Wall Street expected, and the third-largest warehouse club operator lifted its full-year earnings guidance.
BJ's and its rivals saw their popularity soar during the recession as shoppers headed there for food and other necessities. But consumers shied away from higher-margin nonessential purchases.
BJ's net income rose to $26.1 million, or 49 cents per share, for the three months ended May 1. That compares with a profit of $24.3 million, or 45 cents per share, reported a year earlier.
The performance topped the 43 cents-per-share forecast of analysts polled by Thomson Reuters. These estimates generally exclude one-time items.
Overall revenue including membership fees rose 13 percent to $2.61 billion from $2.31 billion, meeting analysts' predictions.
Membership fee revenue improved to $47 million from $44.4 million.
Revenue at warehouse clubs open at least a year climbed 7.8 percent including gasoline sales and 4.2 percent without it. That figure is a key measure of a retailer's performance because it looks at the results of existing stores rather than newly opened ones.
BJ's previously said that it expects food and other basic items to drive sales this year and is stepping up remodeling of its stores as well as adding new units to existing markets. As part of its real estate strategy, the company is experimenting with a smaller format store — late last year it opened a 85,000-square-foot store in Quakertown, Pa.
BJ's boosted its fiscal 2010 earnings outlook to a range of $2.58 to $2.68 per share. It previously predicted net income between $2.54 and $2.64 per share.
Analysts anticipate earnings of $2.61 per share for the year.
BJ's, based in Natick, Mass., currently runs 188 warehouse clubs in 15 states.
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