Home still a leader at Big Lots
August 24, 2010,
Columbus, Ohio - Although many retailers say business in discretionary categories remains wobbly, such was not the case at Big Lots during the second quarter.
"Across retail, it appeared consumers where more cautious during the June/July time frame. However, it was very interesting to see that the discretionary categories and the higher ticket goods seemed to be the most appealing areas of our stores in the second quarter," said Steve Fishman, chairman, ceo and president of the 1,370-store off-pricer.
Furniture, home and seasonal led the way, he added.
Big Lots plans to extend its Think Extreme Value campaign into the holiday season, with television commercials set to start running in November. Christmas will be built around key items, with home and seasonal expected to be strong performers, said Fishman.
The company also has ample open-to-buy set aside for the third and fourth quarters for close-outs, he said.
"I believe we're better positioned for fall and Christmas than at any other time in the five years since I've been running this business," he added.
Net income for the quarter ended July 31 rose 36.7% to $38.9 million, or 49 cents per share. Gross margin grew by 50 basis points to 40.5%. The company took fewer markdowns in home and had bigger margins in home and seasonal. Those were offset by higher freight costs.
Sales for the quarter increased 5.1% to $1.14 billion, with comps up 3.8%.
Big Lots also boosted its guidance for the fiscal year, with earnings from continuing operations expected to range from $2.82 to $2.90. Prior guidance was $2.75 to $2.85. Comps are expected to rise 3.5% to 4.5%.
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