On Aug. 15, BJ's Wholesale Club (NYSE:BJ) released second-quarter earnings for the period ended July 29.

  • Sales were slightly below expectations, but earnings per share were better by a penny.
  • BJ's lowered earnings guidance for the fiscal year to $1.69 to $1.77 per share.
  • Through the first six months of the year, below-average performance in working capital and increased capital expenditures have caused the company to go from positive free cash flow of $31.5 million to $20.8 million in negative free cash flow.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2007

Q2 2006

Change

Sales

$2,150,000

$2,136,905

$2,022,538

5.7%

Net Profit

--

$26,401

$30,453

(13.3%)

EPS

$0.38

$0.39

$0.44

(11.4%)

Diluted Shares

66,952

69,141

(3.2%)



Get back to basics with a look at the income statement.

Margin Checkup

Q2 2007

Q2 2006

Change*

Gross Margin

9.83%

10.19%

(0.36)

Operating Margin

1.99%

2.46%

(0.47)

Net Margin

1.24%

1.51%

(0.27)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2007

Q2 2006

Change

Cash + ST Invest.

$76,164

$150,776

(49.5%)

Accounts Rec.

$90,694

$81,803

10.9%

Inventory

$802,694

$766,719

4.7%



Liabilities

Q2 2007

Q2 2006

Change

Accounts Payable

$525,296

$548,142

(4.2%)

Long-Term Debt

$2,494

$2,970

(16%)



Learn the ways of the balance sheet.

Cash Flow Highlights

Q2 2007

Q2 2006

Change

Cash From Ops.

$72,596

$83,004

(12.5%)

Capital Expenditures

$93,388

$51,847

80.1%

Free Cash Flow

($20,792)

$31,157

N/A



Find out why Fools always follow the money.

Related Companies:

  • Costco (NASDAQ:COST)
  • Wal-Mart (NYSE:WMT)
  • Target (NYSE:TGT)
  • Dollar General (NYSE:DG)
  • Family Dollar Stores (NYSE:FDO)

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Wal-Mart is a Motley Fool Inside Value selection. Costco and Family Dollar are Motley Fool Stock Advisor selections. Take the newsletter of your choice for a 30-day trial.

At the time of publication,Nathan Parmelee held shares of Costco but had no positions in any of the other companies mentioned. Fool rules are here.