Rising gasoline prices are sort of a fallback excuse for retailers, and have been for the past year. As such, I tend to roll my eyes and look for the real problem. But, as my colleague Bill Mann reminded me -- vis-à-vis Wal-Mart's
Still, it's interesting to see the variation in performance across retailers who serve, ostensibly, the same or very similar populations. I'm talking about Target
Today, BJ's Wholesale Club
Although BJ's seems to have dodged -- or at least managed -- the increased energy costs that weighed on Wal-Mart, that doesn't mean BJ's isn't feeling some gas pains of its own. Based on lower profitability for gasoline sales, the firm revised its full-year guidance to a range of $1.85 to $1.91 per share, down from previous guidance of $1.87 to $1.95 per share.
One of the reasons my colleague Nate Parmelee likes BJ's is cash flow. As opposed to some of the more aggressive growers in the space, BJ's used to produce a decent sum. But that's not quite so evident for the first half of this year. The $41 million I calculate is 55% less than last year's tally at the same point. With capital expenditures on par, the difference comes in two places. Last year, the firm had decreased inventories by $37 million, far ahead of this year's $13.5 million. That discrepancy doesn't worry me much. But there's another $19.8 million disappearing into a category called "other."
How can something that large be shunted aside as "other?" Good question. And one I didn't see answered in the conference call.
Related Foolishness:
- BJ's releases Q2 2005 earnings.
- Is BJ's growth still that impressive?
- Beyond the statistics at BJ's.
- Can BJ's boost its biz?
Seth Jayson wouldn't wish BJ's headline writing on his worst enemy. At the time of publication, he had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
