BJ’s Wholesale Club Financial Report Jessica Webb April 22, 2013 University of Central Florida Professional Writing – ENC 3250 BJ’s Wholesale Club Financial Report 2 ABSTRACT This report includes information on the financial aspects of the company BJ’s Wholesale Club. Along with this financial material, this report also includes the basic company information for BJ’s Wholesale Club, background information, and comparative figures with other companies. The general information explored here for BJ’s Wholesale Club is to establish BJ’s as a prime competitor with other wholesale clubs and as a quality retail store in the United States. The purpose of this report is to present the financial stability of BJ’s Wholesale Club and recommend to financial investment groups that this company holds strong investment potential. The financial information presented will allow investors to become knowledgeable about BJ’s recent fiscal and economic achievements, as well as how they fair in the public’s opinion as one of the leading retailers in the country. BJ’s Wholesale Club Financial Report 3 TABLE OF CONTENTS ABSTRACT ……………………………………………………………………………….. 2 EXECUTIVE SUMMARY ……………………………………………………………….. 5 INTRODUCTION ………………………………………………………………………... 6 BACKGROUND INFORMATION ……………………………………………................ 7 FINANCIAL FINDINGS ………………………………………………………………… 10 CONSUMER FINDINGS …………………………………………………………………. 14 CONCLUSION ……………………………………………………………………………... 17 RECOMMENDATION …………………………………………………………………… 18 WORKS CITED …………………………………………………………………………… 19 GRAPHICS WORKS CITED ……………………………………………………………... 20 GLOSSARY ……………………………………………………………………………….. 21 BJ’s Wholesale Club Financial Report 4 LIST OF FIGURES AND TABLES FIGURE 1 ………………………………………………………………………………. 7 FIGURE 2 ………………………………………………………………………………. 8 FIGURE 3 ………………………………………………………………………………. 9 FIGURE 4 ………………………………………………………………………………. 11 FIGURE 5 ………………………………………………………………………………. 12 FIGURE 6 ………………………………………………………………………………. 14 TABLE 1 ……………………………………………………………………………...... 10 TABLE 2 ……………………………………………………………………………….. 15 BJ’s Wholesale Club Financial Report 5 EXECUTIVE SUMMARY This report examines and analyzes BJ’s Wholesale Club as a company of potential interest for investment. The purpose of this report is to accurately present the information in a clear and concise manner. The author, who has experience working for this particular company for the past six years, is highly aware of any and all services that BJ’s offers its customers, as well as details about products and services, therefore providing within this report inside information that is very valuable. This report hopes to deliver accurate information about financial stability within the company and offer insight into the company’s standing in the opinions of its customers. BJ’s Wholesale Club is a warehouse style business which, for a yearly fee, offers its customers various products and services, as well as items packaged as “bulk.” BJ’s is known for its value on products and for its goal of providing outstanding customer service. Within the report that follows, the author will attempt to explain the company’s roots and current standing, its services and products, and why the yearly membership fee is worth the cost. Also, the author will provide graphics that illustrate how the company is doing in terms of financial success, as well as public opinion. In the conclusion of the report, the author will offer insight into future success of the company as well as any recommendations for KIG in proceeding with investment into BJ’s Wholesale Club. BJ’s Wholesale Club Financial Report 6 INTRODUCTION This report examines the company BJ’s Wholesale Club, with emphasis on its potential for long-term investment. This report also gives information on BJ’s Wholesale Club itself, which includes company background, services and product information, and financial information. The information is presented by the author who has current knowledge of BJ’s Wholesale Club from working experience and daily interactions with customers and material circulated within the company. Also included in this report is information about BJ’s standing in the public’s opinion. BJ’s Wholesale Club is one of the leading companies in wholesale retail in the United States (“Form 10-k,” 2011). BJ’s offers customers “bulk” items at competitive prices with regular retail stores. The report that follows will present more company information, as well as financial stability and investment potential. For this analysis, the author was able to find adequate information and supporting details provided from sources online, which included financial reports from BJ’s Wholesale itself, as well as stock information and comparative graphics. The author was also able to find information from a BJ’s location that was useful in providing data. What this report hopes to achieve is to create awareness of BJ’s Wholesale Club as a proper leader in retail, as well as a contributing force to the American business. The purpose of this report is to determine whether BJ’s Wholesale is a suitable candidate for Knights Investment Group. BJ’s Wholesale Club Financial Report 7 BACKGROUND INFORMATION BJ’s Wholesale Club “is a leading operator of membership warehouse clubs in the Eastern United States” (“Company background,” 2013). BJ’s “introduced the warehouse club concept to New England in 1984 and has since expanded to become a leading warehouse club operator in the eastern United States” (“Form 10-k,” 2011). The current company headquarters is located in Westborough, Massachusetts. The name “BJ’s” comes from the name of the first company president’s daughter, Beverly Jean (“Team member guide,” 2010, p. 6). Figure 1 (“Bj’s,” 2013) BJ’s is a wholesale club, specializing in products sold in “bulk,” or products sold in larger quantities. This approach, which offers more product at lower prices, is geared towards large families or people interested in saving more while getting more. The wholesale club is different from other grocery or retail stores because it charges its members a yearly fee, currently $50, to shop. BJ’s is committed to customer service, especially when charging this yearly fee for “members” to shop. Only members can shop at BJ’s, so it is extremely important to keep BJ’s Wholesale Club Financial Report 8 members satisfied with their shopping experience, as well as ensuring that they will continue to come back year after year. Figure 2 (“Bj,” 2013) As shown in Figure 2, there are currently 190 BJ’s clubs operating in fifteen states, including mostly states along the East Coast of the U.S. (“Company background,” 2013) BJ’s carries a unique brand of products made by Berkley & Jensen, or B&J for short, and Wellsley Farms. Much like stores such as Wal-Mart and Target, BJ’s has these exclusive brands of products for consumers looking to purchase items of good quality but at lower prices than the “big brand” products. BJ’s offers shoppers a variety of products, such as foods, clothing, health and beauty products, cleaning supplies, household necessities, and “seasonal” and recreational products. They also sell gas, tires, propane, liquor, bakery items, optical products, and deli meats. Furthermore, they have special savings on items “outside” of the club, such as car rentals, vacations, and home improvement (“Company background,” 2013). According to BJ’s official website, they offer “savings of more than 30% off supermarket prices” (“Company background,” 2013) and “convenient one-stop shopping” (“Company background,” 2013). BJ’s also accepts all major credit cards, debit cards, and even EBT/food stamp cards as payment options. They accept BJ’s Wholesale Club Financial Report 9 manufacturer coupons and even have their own BJ’s coupons, allowing customers to use both on a single product (“Company background,” 2013). As BJ’s is very member friendly, this is an extremely important feature for the company. Another major feature that BJ’s offers is towards businesses who need to buy product in bulk. Businesses can sign up for a membership and receive products that are tax free because they are for resale purposes. This is a great benefit for smaller businesses who would like to save on the products they sell. Figure 3 (Hammond) BJ’s biggest competitors are Costco and Sam’s Club, both of which are also wholesale clubs (“Yahoo,” 2013). Unlike other wholesale clubs, BJ’s prides itself on taking all manufacturer coupons as well as BJ’s coupons, and offering lower prices on gasoline than local gas stations. Although it does rank #3 in the country when it comes to wholesale clubs, following Costco and Sam’s, it is ranked #1 in New England, where it originated (“Yahoo,” 2013). BJ’s Wholesale Club Financial Report 10 FINANCIAL FINDINGS BJ’s Wholesale Club would be a great investment because, according to TheStreet.com, BJ’s year-to-date performance was up 6.97% on the New York Stock Exchange in 2011 (“Bj: stock quote,” 2011). This upward trend in stock for the year is a promising outlook for the future. An investment in this company at this time would most likely turn some kind of profit. In 2010, BJ’s made Fortune 500’s annual list of the top companies in America. It ranked 232 (“Fortune 500 2010,” 2010). According to this information, BJ’s financial success is proof that it contains highly valuable assets when it comes to investment. Fiscal Year Ended January 29, 2011 January 30, 2010 January 31, 2009 % of % of % of $ Sales $ Sales $ Sales (Dollars in Millions except Per Share Amounts) Net sales $ 10,633 100.0 % $ 9,821 100.0% $