Big Lots’ home a Q1 “key driver”
May 27, 2010,
Columbus, Ohio – For the third consecutive quarter, home was a leading performing category at Big Lots in the first quarter period, the closeout retailer reported today during its earnings call.
“We continue to deliver newness and better quality goods in home,” he explained, noting that the retailer’s Echo Point Home decorative furnishings and Port 7 bedding and decorative home furnishings collections “generated very good results.”
Net sales for the first quarter, ended May 1, increased 8.2% to $1,235.2 million, compared to $1,141.7 million for the same period last year. Comparable store sales for stores open at least two years at the beginning of the fiscal year increased 6.0% for the quarter.
The quarter’s net income came in at $55.9 million, or 68 cents per diluted share compared to $36.2 million, or 44 cents per diluted share, for the first quarter of fiscal 2009. These results include both continuing operations and discontinued operations. The company said discontinued operations activity was minimal in the first quarter of both fiscal 2010 and fiscal 2009.
Big Lots also noted in gross margin, home also played a role. “Dollars grew faster than sales” in the quarter, representing a 10-basis-point-increase over last year’s gross margin rate. This is attributable to “sales of higher-margin home products, which became a larger percentage of our total sales,” as well as to lower markdowns as a percent of sales due to record inventory turnover, partially offset by higher freight costs.
The 1,367-unit closeout chain in 47 states also offered an update on the progress of its “A” locations, which include eight test stores in areas with higher-income shoppers than Big Lots’ average customer.
These “A” locations continue to be “a major step forward for our company” with encouraging results so far, the retailer said, as early indications suggest Big Lots is attracting a new customer here who considers home, furniture and seasonal purchases more important than consumables.
Looking ahead, for the second quarter of fiscal 2010 Big Lots anticipates comparable store sales will increase in the range of 4% to 5% and income from continuing operations is estimated to be in the range of 44 cents to 49 cents per diluted share, compared to income from continuing operations for the second quarter of fiscal 2009 of 35 cents per diluted share.