Soft home strong at Big Lots
November 30, 2007-- Home Textiles Today,
Columbus, Ohio – While home was one of the higher-ticket areas that proved “tougher” in sales performance during the third quarter, closeout retailer Big Lots said the textiles segment has fared much better.
“The domestics part of the business has actually been stronger than the rest of the parts,” said Steve Fishman, chairman and ceo to analysts on the 1,368-unit chain’s earnings call this morning. “And although it’s not as strong as I’d like it to be, it continues to lead the way. The difficulties have really been in the housewares area and the decorative accessories and the picture frame area.”
Big Lots reported quarterly net income of $14.3 million, more than seven times its $1.7 million earnings in the year-ago quarter – which had been affected by an after-tax charge of $6.1 million.
Sales were off 1.8% to $1.03 billion, as comps edged down 0.5%.
Operating profit of $22.7 million dwarfed the year-ago period’s $2.3 million, in part due to a 160 basis point improvement in expenses.
Furniture benefited in part from Big Lots’ completion of its retrofit program during the quarter. This initiative, centered on 70 stores mainly in California, was to “get more merchandise out on the selling floor and better allocate square footage to key categories,” Fishman said.
He continued, “In approximately half of these stores we created enough space to move to a full-size furniture department. We learned a lot about how to best execute the retrofit, and any future activity will hinge on our ability to ensure there’s enough space to expand furniture.”
Big Lots will continue to evaluate the sales and profitability of this initiative through the holiday period before making a chainwide decision for next year.
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