Big Lots sees sales lift in Q4
Home & Textiles Today Staff -- Home Textiles Today, March 6, 2013
Columbus, Ohio - A "decent" sales performance from domestics was not enough to help Big Lots' lagging home business in an otherwise strong fourth quarter.
Repairs to faulty segments in home - particularly home décor items - are underway and expectations are high that home will at some point this year become one of Big Lots' best performing divisions, noted Steve Fishman, chairman, ceo and president.
"My call is that home will be [one of our] leading businesses this year," he said during Big Lots' earnings call this morning.
The mending of home includes improvements in quality and value in decorative home merchandise, like candles and other accessories.
"We have some exciting programs in there and you will see us take some bold steps in the balance of Q2 to alleviate the inventory that has to go away," Fishman added.
He said the domestics part of home "has been pretty decent, and we have a very strong focus there and a senior merchant who really understands that business." Tabletop - cutlery, dishes, etc. - "is also a place where we have a very senior merchant who has many, many years of experience. We need to increase some quality and value there [in the product mix]."
The company reported strong results for the quarter, including a better-than-expected income from continuing operations of $120.3 million, or $2.09 per share, a 19% increase from the year-ago quarter.
Sales for U.S. operations grew 4.4% to $1.7 billion, although comparable store sales for U.S. stores open at least 15 months decreased 3.5%.
From a merchandise perspective, the strongest category was seasonal, up in the mid-single digits and aided by the company's Trim-A-Tree program. Also strong were jewelry and apparel, driven by special closeout opportunities. But food and consumables were down in the low single digits, and furniture was off in the mid-single digits. Even so, mattresses were "strong" and case goods especially fireplaces, were positive.
Toys continued to downtrend, and "the home business remained below last year," Fishman said, blaming the assortment for not being what customers were looking for in the period.
Big Lots' Canadian operation posted its first profitable quarter since its acquisition in July 2011. Sales totaled $48.6 million and net income was $200,000, or $0.00 per diluted share (non-GAAP), compared to net sales of $36.6 million and a net loss of $5.1 million, or $0.08 per share (non-GAAP) a year ago.
For the full fiscal year 2012, results included: income from continuing operations of $177.2 million, or $2.93 per diluted share; adjusted EPS from continuing operations of $2.99 per diluted share (non-GAAP); and a 3.8% increase in total sales to $5.4 billion.
For 2013, Big Lots has a slew of plans being put in place, including new test stores, executive shifts, merchandise mix changes, and other efforts.
One example is the recent appointment of a new divisional merchandise manager to the home area. Fishman did not offer his or her name.
Also in the works now and into 2014 is the continued rollout of coolers as an enhancement not just to the consumables offering but to the total store mix, he said.
The search for Fishman's replacement remains ongoing, he said. In early December he shared his plans to retire in 2013, but offered to stay on until a new ceo is found.
"We have no announcement today nor any indication one is imminent," he said.
Mednick Talks to HTT about Online Trends for Textiles