BJ’s Wholesale Club 1st-quarter net income rises partly on gasoline sales

BJ’s Wholesale Club 1Q net income up on gas sales

PORTLAND, Ore. — - BJ’s Wholesale Club Inc. said Wednesday that improved sales of food, clothing and gasoline helped send its first-quarter net income up 7 percent.

The results were better than Wall Street expected, and the warehouse club operator lifted its full-year earnings guidance.

BJ’s and its rivals gained popularity during the recession as shoppers looked to them for deals on food and other necessities, although consumers largely shied away from discretionary purchases. But company leaders said Wednesday that they saw shoppers buying more clothing, furniture and small appliances during the quarter.

BJ’s is “cautiously optimistic” that consumers may continue buying beyond the basics, as the compoany saw sales in its home and garden sections pick up during the quarter, which could gain momentum moving into the spring and summer.

“We believe that our members are in a more positive frame of mind, which may have released some pent-up demand,” BJ’s CEO Laura Sen said.

BJ’s net income rose to $26.1 million, or 49 cents per share, for the quarter. That topped the 43 cents per-share forecast of analysts polled by Thomson Reuters. That’s compared with with a profit of $24.3 million, or 45 cents per share, a year earlier.

Revenue rose 13 percent to $2.61 billion, meeting analysts’ predictions.

The results were slightly offset by a total of 8 cents per share for technology and moving costs as the company prepares to move its headquarters from Natick, Mass., to Westborough, Mass.

BJ’s said it still expects food and other basics, which make up the bulk of its business, to drive sales. And the company has been renovating many of its clubs and adding locations, which it says could improve its profitability.

The company boosted its fiscal 2010 earnings outlook to $2.58 to $2.68 per share from its previous expectation of $2.54 and $2.64 per share. Analysts anticipate earnings of $2.61 per share for the year.

Shares of BJ’s rose $1.86, nearly 5 percent, to $39.30 in midmorning trading.