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BJ’s Wholesale Club, Inc. Supplemental Information as of May 1, 2010 | | Exhibit 99.2 |
The following supplemental information is provided by the Company with respect to the results reported for the first quarter ended May 1, 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.
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 May 1, 2010 | |
| | | Comparable
Club Sales | | | Impact of
Gasoline Sales | | | Merchandise
Comparable
Club Sales | |
New England | | 7.3 | % | | 3.5 | % | | 3.8 | % |
Upstate New York | | 9.9 | % | | 5.8 | % | | 4.1 | % |
Metro New York | | 4.1 | % | | 0.8 | % | | 3.3 | % |
Mid Atlantic | | 5.9 | % | | 3.2 | % | | 2.7 | % |
Southeast | | 12.7 | % | | 5.8 | % | | 6.9 | % |
| | | | | | | | | |
Total | | 7.8 | % | | 3.6 | % | | 4.2 | % |
| | | | | | | | | |
Selected Metrics
Excluding sales of gasoline, on a comparable club basis, customer count and average transaction amount increased from the prior year by approximately:
| | | | | | |
| | | Customer
Count | | | Average
Transaction
Amount | |
Thirteen Weeks Ended May 1, 2010 | | 4 | % | | 0 | % |
First Quarter Individual Department Performance
Stronger performing departments compared to last year’s first quarter included candy, cigarettes, dairy, frozen foods, health & wellness, housewares, juices, meat, milk, produce, seasonal, small appliances and salty snacks. Weaker performing departments compared to last year’s first quarter included household chemicals, major appliances, pre-recorded video, televisions, and trash bags & foils.
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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 weeks ending July 31, 2010 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
July 31,
2010 | | Ended
August 1,
2009 | | Ending
January 29,
2011 | | Ended
January 30,
2010 | |
GAAP net income | | $ | 38,500 - $40,500 | | $ | 35,065 | | $ | 136,900 - $141,900 | | $ | 132,136 | |
Charge for wage and hour litigation settlement | | | — | | | — | | | — | | | 6,938 | |
MasterCard® and VISA® class action settlement | | | — | | | — | | | — | | | (1,789 | ) |
Income related to reserve for credit card claims | | | — | | | — | | | — | | | (1,724 | ) |
| | | | | | | | | | | | | |
Adjusted non-GAAP earnings | | $ | 38,500 - $40,500 | | $ | 35,065 | | $ | 136,900 - $141,900 | | $ | 135,561 | |
| | | | | | | | | | | | | |
| | |
| | | Thirteen Weeks | | Fifty-Two Weeks | |
| | | Ending
July 31,
2010 | | Ended
August 1,
2009 | | Ending
January 29,
2011 | | Ended
January 30,
2010 | |
GAAP diluted earnings per common share | | $ | 0.72 - $0.76 | | $ | 0.64 | | $ | 2.58 - $2.68 | | $ | 2.42 | |
Charge for wage and hour litigation settlement | | | — | | | — | | | — | | | 0.13 | |
MasterCard® and VISA® class action settlement | | | — | | | — | | | — | | | (0.03 | ) |
Income related to reserve for credit card claims | | | — | | | — | | | — | | | (0.03 | ) |
| | | | | | | | | | | | | |
Adjusted non-GAAP earnings per common share | | $ | 0.72 - $0.76 | | $ | 0.64 | | $ | 2.58 - $2.68 | | $ | 2.48 | |
| | | | | | | | | | | | | |
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 | | $ | 233,500 - $241,500 | | $ | 223,787 | |
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 | | $ | 233,500 - $241,500 | | $ | 229,574 | |
Depreciation expense | | $ | 130,000 - $136,000 | | | 112,777 | |
Stock incentive expense | | $ | 19,700 - $21,700 | | | 22,011 | |
| | | | | | | |
Non-GAAP normalized operating income plus depreciation expense plus stock incentive expense | | $ | 383,200 - $399,200 | | $ | 364,362 | |
| | | | | | | |
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Earnings Guidance
The following chart presents the detailed elements of our sales and earnings guidance for the thirteen weeks ending July 31, 2010 and the fifty-two weeks ending January 29, 2011:
| | | | |
| | | 2nd Quarter | | Full Year |
Net sales increase | | 9.7% to 11.7% | | 9.2% to 11.2% |
Comparable club sales increase | | 5.5% to 7.5% | | 4.0% to 6.0% |
Impact of gasoline sales on comparable club sales | | 0.5% to 2.5% | | 0.5% to 2.5% |
Merchandise comparable club sales increase | | 4.0% to 6.0% | | 2.7% to 4.7% |
Membership fee growth | | 5.5% to 6.5% | | 5.5% to 6.5% |
Other revenues growth | | 8.0% to 10.0% | | 10.0% to 12.0% |
Cost of sales as a percent of net sales increase (decrease) | | (0.05)% to 0.05% | | (0.01)% to 0.09% |
Merchandise margin rate increase | | 0.20% to 0.30% | | 0.17% to 0.27% |
SG&A expense as a percent of net sales increase (decrease) | | (0.10)% to 0.00% | | (0.07)% to 0.03% |
SG&A expense growth | | 9.0% to 11.0% | | 5.0% to 15.0% |
Preopening expense (in millions) | | $1.6 to $2.2 | | $7.0 to $9.0 |
Interest expense (in millions) | | $0.1 to $0.7 | | $1.5 to $2.5 |
Income Tax Rate | | 40.7% | | 40.7% |
Depreciation expense (in millions) | | $31.0 to $33.0 | | $130.0 to $136.0 |
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 today 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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