BJ's Wholesale quarterly profit falls

on November 18 2009 9:56 AM

BJ's Wholesale Club Inc reported a lower quarterly profit on Wednesday, hurt by falling food prices and lackluster demand for its general merchandise.

The warehouse club operator's profit for the third quarter that ended October 31 fell to $17.7 million, or 32 cents a share, from $28.2 million, or 48 cents a share, a year earlier.

Excluding a charge related to the proposed settlement of a legal claim, the profit was 45 cents a share, in line with the analysts' average forecast, according to Thomson Reuters I/B/E/S.

BJ's quarterly sales rose 2 percent to $2.45 billion, missing analysts' average estimate of $2.48 billion.

Sales at its clubs open at least a year, or same-store sales, decreased 2.5 percent.

As the weak economy pressures household budgets, warehouse clubs such as Costco Wholesale Corp , Wal-Mart Stores Inc's Sam's Club and BJ's Wholesale have attracted shoppers seeking low prices on staple items, like bread and paper towels.

People pay an annual fee to shop in the clubs and receive discounts on everything from cartons of fresh fruit to flat panel TVs and gasoline for their cars.

But the clubs are facing greater challenges compared with a year earlier when high gas prices and food inflation spurred their sales.

For the fourth quarter, it sees net sales increasing 10.5 percent to 12.5 percent and same-store sales rising 5 percent to 7 percent.

(Reporting by Dhanya Skariachan; Editing by Derek Caney)

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