BJ's Wholesale to Close 46 In-Store Pharmacies

BJ's Wholesale Club Inc., Natick, Mass., cut its profit forecast amid sluggish sales and said it plans to close 46 in-store pharmacies and two restaurant supply locations, according to the Associated Press. UBS analyst Neil Currie said that BJ's cost-cutting moves primarily seek to eliminate unprofitable parts of its business, but also could draw interest from prospective buyers, although the company has said it is not for sale. BJ's said the lower-than-expected sales will cause it to miss earnings targets, and the company now expects a profit range of 17 cents to 25 cents a share for the quarter ending Feb. 3, compared with its earlier forecast for earnings of 83 cents to 87 cents per share. The new forecast accounts for various charges, including 30 cents to 33 cents per share to create a reserve of at least $20 million tied to the closure of all 46 of BJ's in-store pharmacies as well as two ProFoods Restaurant Supply locations in the New York area. These moves are expected to eliminate about 275 jobs. BJ's said its December sales in the holiday shopping season rose 0.6 percent, below the consensus estimate of analysts surveyed by Thomson Financial, who expected a 1.3 percent rise. The company separately said it is replacing two executives, one in charge of merchandising and logistics, the other overseeing marketing and membership. Other management changes will retain Frank Forward, the company's executive vice president and CFO, for three more years. BJ's also plans to reduce the number of brands and sizes it carries for many products and to draw shoppers to items available temporarily at bargain prices, and to offer more competitive pricing, and refocus marketing and merchandise presentation.