Warehouse sector a quarterly bright spot

ISSAQUAH, Wash. and WESTBOROUGH, Mass. -- The past three-months were favorable to the warehouse sector, as both Costco and BJ’s Wholesale reported quarterly results that were in-line with or beat analysts’ expectations.

Costco reported net sales of $20.45 billion for its second quarter of 2011, an increase of 11% from sales of $18.36 billion for the same period last year. The sales results were 1.4% above Bernstein Research’s forecast, however they were impacted favorably by sales from Costco’s 50% owned Mexico joint venture, which accounted for approximately three percentage points of the increase for both the quarter and the year-to-date sales, Costco reported.

Costco’s U.S. comps were up 5% for the quarter, while total comps were up 7%. Excluding the impact of fuel, U.S. comps saw a 3% increase, while total comps rose 4%.

Costco’s net income for the quarter was $348 million, or 79 cents per diluted share -- in line with analysts’ consensus expectations, and just above Bernstein’s estimate of 78 cents, according to the firm. This compares with net income of $299 million, or 67 cents per diluted share, the company reported last year. Bernstein Research noted that a lower tax rate than it expected benefited EPS versus its estimate by nearly 2 cents.

BJ’s reported that net sales for its fourth quarter ended Jan. 29, were $2.9 billion, an increase of 7.4% over the prior-year period. Same-store sales increased by 3.8%. Excluding fuel, comps were up 1.7%.

The company reported fourth-quarter net income of $10.2 million, or 19 cents per diluted share. These results include post-tax expense of $41.1 million for club closures, restructuring activities and asset impairment charges, the company reported. Excluding the post-tax expense of $41.1 million, adjusted non-GAAP net income was $51.3 million, or 95 cents per diluted share.

BJ’s EPS results were above Citi Investment Research’s estimate of 92 cents, analyst Deborah Weinswig reported. According to Weinswig, the performance was driven by less SG&A expense deleverage than expected.

According to BJ’s, comparable-store sales were strongest in such categories as bakery, cheese, dairy, deli, frozen, health and wellness, meat, milk, prepared foods, produce, small appliances, summer seasonal, video games and winter supplies. Weakness was reported in such categories as apparel, baby food, books, cigarettes, diapers, plates and utensils, paper products, prerecorded video, televisions and water.

For fiscal 2011, BJ’s said it expects to report GAAP net income in the range of $144 million to $154 million, and earnings per diluted share in the range of $2.62 to $2.82. For the first quarter of fiscal 2011, the company said it expects to report GAAP net income in the range of $29.5 million to $31.5 million, and earnings per diluted share in the range of 54 cents to 58 cents.

Costco and BJ’s also reported results for the fiscal month of February. Costco’s net sales for the month were $6.38 billion, an increase of 14% from $5.61 billion in the same four-week period of the prior fiscal year. Costco’s comps for the month were up 6% in the United States and 8% overall. Excluding fuel, U.S. comps were up 4%, while total comps rose 5%.

BJ’s net sales for February increased by 9.3% to $814.1 million from $744.6 million in February 2010. Comparable-club sales increased by 5.5% for the month of February 2011, including a contribution from sales of gasoline of 3.1%. Excluding gasoline sales, merchandise comparable club sales increased by 2.4%. Severe winter storms had a negative impact on merchandise comparable clubs sales of 1% to 1.5%, according to the company.