EX-99.2 3 dex992.htm SUPPLEMENTAL INFORMATION Supplemental Information

 

Exhibit 99.2

BJ’s Wholesale Club, Inc.

Supplemental Information as of October 30, 2010

The following supplemental information is provided by the Company with respect to the results reported for the thirteen weeks and thirty-nine weeks ended October 30, 2010, as well as earnings guidance for the year ending January 29, 2011 (“fiscal 2010”).

Some of the information below refers to Non-GAAP financial measures, which are measures not prepared in accordance with generally accepted accounting principles (“GAAP”). We believe our Non-GAAP presentation provides a meaningful comparison of operating results and have included reconciliations to the most directly comparable GAAP measure. Our Non-GAAP financial measures should be viewed as a supplement to and not as a substitute for our results prepared in accordance with GAAP.

Comparative Club Sales by Major Market

Comparative club sales by major market, including the impact from sales of gasoline were as follows:

 

     Thirteen Weeks Ended October 30, 2010     Thirty-Nine Weeks Ended October 30, 2010  
     Comparable
Club Sales
    Impact of
Gasoline Sales
    Merchandise
Comparable
Club Sales
    Comparable
Club Sales
    Impact of
Gasoline Sales
    Merchandise
Comparable
Club Sales
 

New England

     1.2     1.2     0.0     4.0     2.2     1.8

Upstate New York

     1.8     0.3     1.5     5.4     2.5     2.9

Metro New York

     (0.2 )%      0.1     (0.3 )%      2.0     0.4     1.6

Mid Atlantic

     1.7     1.0     0.7     3.4     1.9     1.5

Southeast

     7.1     1.2     5.9     9.8     3.0     6.8
                                                

Total

     2.5     1.0     1.5     4.8     2.0     2.8
                                                

Selected Metrics

Excluding sales of gasoline, on a comparable club basis, customer count and average transaction amount increased (decreased) from the prior year by approximately:

 

     Customer
Count
    Average
Transaction
Amount
 

Thirteen Weeks Ended October 30, 2010

     2     (1 )% 

Thirty-Nine Weeks Ended October 30, 2010

     4     (1 )% 

Third Quarter Individual Department Performance

Stronger performing departments compared to last year’s third quarter included dairy, juices, produce, meat, milk, frozen, snacks, small appliances, deli, prepared foods and soda. Weaker performing departments compared to last year’s third quarter included health and beauty aids, televisions, household chemicals, books, major appliances, prerecorded video and apparel.

 

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GAAP to Non-GAAP Reconciliation

The following is a reconciliation of net income and diluted earnings per share, as reported on a GAAP basis, to the adjusted non-GAAP net income and diluted earnings per share referenced in our earnings call, for the thirteen weeks and thirty-nine weeks ended October 30, 2010 and October 31, 2009:

 

     Thirteen Weeks Ended      Thirty-Nine Weeks Ended  
(Dollars in Thousands)    October 30,
2010
     October 31,
2009
     October 30,
2010
     October 31,
2009
 

GAAP net income

   $ 22,964       $ 17,368       $ 84,833       $ 76,739   

Charge for wage and hour litigation settlement

     —           6,938         —           6,938   
                                   

Adjusted non-GAAP net income

   $ 22,964       $ 24,306       $ 84,833       $ 83,677   
                                   

 

     Thirteen Weeks Ended      Thirty-Nine Weeks Ended  
     October 30,
2010
     October 31,
2009
     October 30,
2010
     October 31,
2009
 

GAAP diluted earnings per common share

   $ 0.43       $ 0.32       $ 1.58       $ 1.40   

Charge for wage and hour litigation settlement

     —           0.13         —           0.13   
                                   

Adjusted non-GAAP earnings per common share

   $ 0.43       $ 0.44       $ 1.58       $ 1.53   
                                   

GAAP to Non-GAAP Earnings Guidance Reconciliation

The following is a reconciliation of net income and diluted earnings per share guidance, as reported on a GAAP basis, to the adjusted non-GAAP net income and diluted earnings per share guidance referenced in our earnings call, for the thirteen and fifty-two weeks ending January 29, 2011, as well as actual results for last year’s comparable periods:

 

    Thirteen Weeks     Fifty-Two Weeks  
(Dollars in Thousands)   Ending
January  29,
2011
     Ended
January 30,
2010
    Ending
January 29,
2011
     Ended
January 30,
2010
 

GAAP net income

  $ 48,800 - $50,800       $ 54,532      $ 133,600 - $135,600       $ 131,271   

Charge for wage and hour litigation settlement

    —           —          —           6,938   

MasterCard® and VISA® class action settlement

    —           (1,789     —           (1,789

Income related to reserve for credit card claims

    —           (1,724     —           (1,724
                                 

Adjusted non-GAAP earnings

  $ 48,800 - $50,800       $ 51,019      $ 133,600 - $135,600       $ 134,696   
                                 

 

     Thirteen Weeks     Fifty-Two Weeks  
     Ending
January 29,
2011
     Ended
January 30,
2010
    Ending
January 29,
2011
     Ended
January 30,
2010
 

GAAP diluted earnings per common share

   $ 0.90 - $0.94       $ 1.00      $ 2.48 - $2.52       $ 2.40   

Charge for wage and hour litigation settlement

     —           —          —           0.13   

MasterCard® and VISA® class action settlement

     —           (0.03     —           (0.03

Income related to reserve for credit card claims

     —           (0.03     —           (0.03
                                  

Adjusted non-GAAP earnings per common share

   $ 0.90 - $0.94       $ 0.94      $ 2.48 - $2.52       $ 2.46   
                                  

Operating Income to Non-GAAP Normalized Operating Income plus Depreciation Expense plus Stock Incentive Expense Reconciliation

The following is a reconciliation of operating income, as reported on a GAAP basis, to non-GAAP normalized operating income plus depreciation expense plus stock incentive expense referenced in our earnings call, for the fifty-two weeks ended January 30, 2010, as well as guidance on the same basis for the fifty-two weeks ending January 29, 2011:

 

     Fifty-Two Weeks  
(Dollars in Thousands)    Ending
January 29,
2011
     Ended
January  30,

2010
 

GAAP operating income

   $ 226,700 - $230,000       $ 222,346   

Charge for wage and hour litigation settlement

     —           11,700   

MasterCard® and VISA® class action settlement

     —           (3,011

Income related to reserve for credit card claims

     —           (2,902
                 

Non-GAAP normalized operating income

   $ 226,700 - $230,000       $ 228,133   

Depreciation expense

   $ 126,000 - $128,000         112,777   

Stock incentive expense

   $ 19,500 - $20,500         22,011   
                 

Non-GAAP normalized operating income plus depreciation expense plus stock incentive expense

   $ 373,700 - $377,000       $ 362,921   
                 

 

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Earnings Guidance

The following chart presents the detailed elements of our sales and earnings guidance for the thirteen and fifty-two weeks ending January 29, 2011:

 

     4th Quarter   Full Year

Net sales increase

   6.7% to 8.7%   8.2% to 8.7%

Comparable club sales increase

   2.5% to 4.5%   4.1% to 4.7%

Impact of gasoline sales on comparable club sales

   0.0% to 1.0%   1.4% to 1.6%

Merchandise comparable club sales increase

   2.0% to 4.0%   2.7% to 3.3%

Membership fee income growth

   7.0% to 7.5%   6.3% to 6.5%

Other revenues growth

   10.3% to 12.3%   9.0% to 9.6%

Cost of sales as a percent of net sales increase (decrease)

   (0.03)% to 0.17%   0.01% to 0.08%

Merchandise margin rate increase

   0.13% to 0.23%   0.11% to 0.17%

SG&A expense growth

   10.5% to 14.5%   8.0% to 9.0%

Preopening expense (in millions)

   $2.0 to $4.0   $11.6 to $13.6

Interest expense (in millions)

   $0.1 to $0.3   $1.1 to $1.3

Income Tax Rate

   40.7%   40.6%

Depreciation expense (in millions)

   $33.0 to $35.0   $126.0 to $128.0

Forward-Looking Statements

This exhibit contains forward-looking statements as defined by The Private Securities Litigation Reform Act of 1995, including earnings guidance. 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, the rate of inflation or deflation, federal, state and local regulation in the Company’s markets, federal budgetary and tax policy, litigation, competitive conditions, progress associated with the implementation of technology initiatives and other factors discussed in the Company’s Annual Report on SEC Form 10-K for the fiscal year ended January 30, 2010. Any forward-looking statements represent our estimates only as of November 17, 2010 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.

 

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