Rain and snow dealt the club channel a blow during December, as Costco was impacted by heavy rain in California and BJ’s felt the sting of blizzards in the Northeast. Sam’s was impacted too, but Costco and BJ’s have a higher concentration of stores in those areas so it is likely the effect was less.
Costco said its worldwide sales increased 11% to $9.19 billion for the five-week period ended Jan. 2 and total company same-store sales increased 6%. Same-store sales at Costco’s U.S. clubs increased 4%, or 3% if the effect of higher year-over-year fuel prices is excluded. Internationally, same-store sales increased 12%, but that figure was aided by currency exchange rates. Excluding the impact of exchange rates, international same store sales increased 8%.
The total company comp was essentially inline with analysts’ consensus estimate of 6.1%, however, the 3% U.S. gain was lighter than the 3.9% consensus figure. The company’s results were thought to be negatively affected by wetter than normal weather in Southern California where Costco has a large concentration of clubs.Conversely, severe winter weather that hit the Northeast late in December negatively affected BJ’s sales, as it has a high concentration of clubs along the Atlantic seaboard. Same-store sales in December increased 3.8%, or 1.4% excluding the impact of escalating gas prices. The company said sales during the five week period were strong during the early part of the month, but negatively affected by an unspecified amount late in the month when severe winter weather hit the Northeastern U.S. Aside from that impact, BJ’s said traffic at its clubs increased modestly and average transaction sizes were flat.
BJ’s sales performance was largely overshadowed by several other moves at the company. The closure of five underperforming clubs was announced (three in Atlanta, one in Charlotte, NC and one in Sunrise, Fla.) and there were a couple of senior level personnel moves. CFO Frank Forward, who has been with the company since it was founded in 1984, will retire as part of planned succession strategy involving the appointment of SVP and director finance Robert Eddy being elevated to the role of CFO. In addition, SVP of field operations Cornel Catuna was named EVP club operations to fill the void created by the retirement of Thomas Gallagher whom the company said was leaving for health reasons. The changes come amid escalating speculation that BJ’s is a candidate for a private equity transaction.