Gas drives Costco, BJ's Wholesale February sales

CHICAGO (Reuters) - February sales at Costco Wholesale Corp and BJ's Wholesale Club Inc surpassed Wall Street's expectations, driven by higher gasoline prices and shoppers' focus on bargains.

Costco, BJ's and Wal-Mart Stores Inc's Sam's Club experience an increase in sales when the price of gasoline, which some stores sell on-site, rises.

Rising gasoline prices can also influence sales of other items as people pull in to buy discounted gasoline and stay to do the rest of their shopping as well.

BJ's has gas stations at 103 of its 190 or so locations and sales and memberships increase in tandem with the price per gallon.

"We see each week and each day, actually, as gas prices rise, more and more traffic to the clubs," Chief Executive Laura Sen said during a conference call. "We see this as one of our best marketing tools, especially in a rising price environment."

BJ's, which is considering selling the company, also reported a better-than-expected quarterly profit, while Costco's profit met Wall Street's expectations.

BJ's shares rose 1.2 percent to $48.88 in morning trading, while Costco's shares slipped 0.5 percent to $73.26.

Costco, the top U.S. warehouse club operator, said February sales at stores open at least a year rose 8 percent, while analysts were looking for a 7 percent increase, according to Thomson Reuters data.

Smaller competitor BJ's said its February same-store sales rose 5.5 percent. Analysts were expecting a 3.5 percent gain.

Costco's February same-store sales in the United States rose 6 percent including gas, or 4 percent excluding it. At BJ's, same-store sales rose 2.4 percent without gas.

Meanwhile, all eyes are on BJ's potential sale, which the company did not discuss on Wednesday.

The possible sale "sort of overrides the fundamentals at least for the near term," said Walter Stackow, a senior research analyst at Manning & Napier, which has held BJ's shares for nearly three years.

Stackow expects a buyer would be a private equity firm or consortium, not a grocer or other strategic player.

HIGHER FEE AT BJ'S

Costco and BJ's sell everything from televisions to bulk packages of avocados, juice and diapers, in warehouse-style stores at which members pay an annual fee to shop.

BJ's raised its annual membership fee $5 to $50 in January, matching Costco's lowest-price membership. Sam's Club's least expensive membership is $35 per year.

Costco earned $348 million, or 79 cents per share, in its fiscal second quarter that ended on February 13, up from $299 million, or 67 cents per share, a year earlier. The profit met analysts' expectations, according to Thomson Reuters I/B/E/S.

BJ's, which opened its doors in 1984, has most of its clubs in the Northeast and Mid-Atlantic regions of the United States -- areas battered by a series of snow storms during the quarter. Plowing that snow was a drag on BJ's expenses, which was offset by benefits in areas such as payroll.

Excluding items, BJ's earned 95 cents per share in the fiscal fourth quarter that ended on January 29, up from 94 cents a year earlier, topping analysts' forecast of 92 cents.

In February, BJ's best sellers included beauty products and food. Sales of cigarettes, computer equipment, televisions, baby food and diapers declined from a year earlier.

BJ's forecast first-quarter earnings of $29.5 million to $31.5 million, or 54 cents to 58 cents per share, and fiscal-year earnings of $144 million to $154 million, or $2.62 to $2.82 per share.

Costco said that it plans to open 15 or 16 new warehouses, including one relocation and one reopening, before its fiscal year ends on August 28. BJ's has plans to open six to eight clubs this year, including one relocation and four or five smaller clubs that are about 85,000 square feet.

Last week, Wal-Mart said fourth-quarter sales at Sam's Club rose 4.5 percent, or 2.7 percent excluding fuel. Sam's Club, the No. 2 warehouse behind Costco, expects same-store sales to rise 1 percent to 3 percent this quarter, excluding fuel.

(Additional reporting by Isheeta Sanghi in Bangalore; Editing by Dan Lalor and Maureen Bavdek)

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