Bookkeeping: Beginning BJ's Wholesale Club (BJ) Position

One of our long running themes has been the "Pooring of America" as costs of life overcome wage increases in the country for the lower and middle classes - it has been happening slowly but surely over the past decade - median wages have not kept up with inflation even if you use the government's faulty understated inflation figures. [Do The Bottom 80% of Americans Stand a Chance] Using reality the unwashed masses are falling even further behind, and without lines of credit available in great quantity as they once were (including house ATM) this problem will now be exposed (and has been the past year) as the tide washes out.

To that end, I've been pointing to to the Walmarts (WMT) and McDonalds (MCD) over the past year as good investments - but we have not bit ourself. Today we have an opportunity in BJ's Wholesale Club to get a poor man's Costco (COST). The stock is down 7% on what I consider a good earnings report. Full report here.

• BJ's Wholesale Club Inc (NYSE:BJ - News) said on Wednesday quarterly profit rose as shoppers headed to its stores in search of low prices on food and fuel, and the No. 3 U.S. warehouse club operator raised its full-year profit forecast.
• Profit for the second quarter ended August 2 was $36.5 million, or 61 cents per share, up from $36.3 million, or 55 cents per share, a year earlier. Excluding a benefit of 3 cents per share for state income tax audit settlements, BJ's earned 58 cents per share in the latest quarter. Analysts, on average, had been expecting it to earn 57 cents per share, according to Reuters Estimates.
• BJ's quarterly net sales, which exclude membership fee revenue, rose 17.9 percent to $2.65 billion from $2.25 billion. Sales at clubs open at least a year, a key retail gauge known as same-store sales, jumped 15.5 percent, including an 8.1 percent contribution from sales of gasoline.
• The company said traffic increased by 5 percent for the quarter, excluding the sales of gasoline, its strongest growth since 2004. (people flooding into discount warehouses sounds like a "recovering economy to me!)
  

• BJ's raised its full-year profit forecast, the second upgrade in a matter of months. The company now expects earnings for the year of $2.10 to $2.20 per share, up from its May guidance of $2.04 to $2.14 per share. The May forecast was 6 cents per share above the company's previous expectations offered in March.

• The company also announced that its board has authorized an additional $200 million for share repurchases. During the second quarter, BJ's purchased about 1.4 million shares of its own common stock at an average cost of $37.45 each, or approximately $54 million total.
• During the half-year ended Aug. 2, BJ's purchased about 2.4 million shares of its own common stock at an average cost of $35.30 each, or about $83 million. Including the $200 million authorization announced Wednesday, the company has about $291 million available for share repurchase.