Big Lots Preps for Growth
March 10, 2008-- Home Textiles Today,
At closeout retailer Big Lots, the home business, considered one of its higher-margin categories, suffered lower sales and an unexpected increase in promotional markdowns, the 1,353-unit said during its fourth-quarter and yearend earnings call.
Chairman and ceo Steve Fishman asserted that Big Lots is on the road to repairing this segment of the business, but offered few details.
"Our home business remained soft," Fishman said. "We're working hard to correct the situation, and make changes in both product and people to try to get this category back into positive territory."
For the year ended Feb. 2, Big Lots recorded net profit of $158.5 million, up 27.8% from 2006. Sales in 2007 were down 1.8% to $4.7 billion. Comp sales grew 2.0%, the company said.
Highlights for the year and quarter included consumables and seasonal – both departments posted comp-store sales in mid-single digits or better.
Taking a detour downward during the fourth quarter — when it "slowed a bit" — was the furniture category, which has enjoyed nearly three-and-a-half years of consecutive mid-single and low-double digit comp store sales.
But already in February and this month furniture sales have "rebounded strongly," giving hope that category's soft performance in the fourth quarter "will prove to be an isolated event," Fishman said.
Big Lots, Inc. and Subsidiaries
|Qtr. 2/2 (millions)||2007||2006||% change|
a. 13-week fourth quarter in fiscal 2007 compared to 14-week fourth quarter in fiscal 2006.
b. 52-week fiscal 2007 compared to 53-week fiscal 2006.
NOTE: Results do not include fiscal 2007 KB Toys bankruptcy proceeds.
|Oper. Income (EBIT)||132.7||137.0||(3.1)|
|Per share (diluted)||1.00||0.94||6.4|
|Average gross margin||39.7%||40.5%||--|
|Oper. Income (EBIT)||226.4||167.8||34.9|
|Per share (diluted)||1.49||1.11||34.2|
|Average gross margin||39.5%||39.9%||--|