BJ’s Follows ‘Weak’ Q3 TV Sales With Forecast of ‘Crazy’ Black Friday
Predicting “Black Friday is going to be crazy,” BJ’s Wholesale Club CEO Laura Sen said in the company’s Q3 2010 earnings webcast Wednesday the company will respond to competitors’ pricing strategies by continuing to “do what we do and do it well.” Sen said “we've already seen noise” from Target and Wal-Mart on toys and electronics. CFO Frank Forward said the company is reserving guidance estimates for end-of-year results based on uncertainty about holiday sales, adding concern about “the highly promotional holiday season.” The company is “cautious in general” about general merchandise sales for Q4, he said.
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Despite the discounting in Q4, Sen said, “being in the game for Black Friday is important because it can absorb the demand for high-ticket gift items ahead of schedule.” She said BJ’s has made a point of selling many different items, “not just gift items,” across the stores to offset promotional items. She said Black Friday “is not just a four-hour event for us,” but a four-day event.
BJ’s is coming off a profitable third quarter, led by perishable food sales but impacted by slow sales of TVs, Forward said. For Q3, BJ’s comparable store sales decreased for general merchandise by 3 percent, due to soft sales in apparel and “weak” TV sales, down 9 percent from the previous year, Forward said. He said the 9 percent decline in TV revenue was an improvement over the 25 percent slide in Q2.
Net sales at BJ’s were $2.57 billion for Q3, he said, compared with $2.45 billion in the prior year. Revenue grew to $23 million, up from $17.4 million in Q3 2009.