Big Lots ends Q1 on low note, Campisi takes helm with "sense of urgency"
Home Textiles Today Staff -- Home Textiles Today, 5/30/2013 2:25:23 PM
Columbus, Ohio - On the heels of Big Lots' challenged first quarter, the company's newly appointed ceo and president - David Campisi - during the chain's earnings call today shared his goals going forward to help improve the business.
"My top priority is to engage with our executive leadership team, merchants and our planning groups, our store operations team, as together we will travel to stores and our single focus will be to learn more about the business and our customers' wants and desires, and develop a vision on how best to move Big [Lots] forward," said Campisi, who assumed his post on May 6, upon the departure of his predecessor, Steve Fishman.
"Merchandising, marketing and execution all the way through to the stores are the engine, which needs to accelerate in this business at a much quicker pace and with a sense of urgency," continued Campisi, a 30-year veteran of the retail industry. "The team has already identified a handful of initiatives, which are already in test mode, and I believe some have potential -- coolers and freezers, store remodels, and the loyalty program, all of which you have heard on prior calls."
Current test program are showing positive results. Among them is a recently introduced cooler program testing in 75 stores located in five different markets across the country as part of a greater effort to draw in more traffic. With the coolers - which are stocked with an array of foods from milk and cheese through frozen dinners, pizza and ice cream - Big Lots is hoping to attract shoppers enrolled in the Federal government's "SNAP" - Supplemental Nutrition Assistance Program" -- into its stores.
So far, this test has shown "encouraging" results and "met expectations" and is could be expanded in the near future to other locations.
Also proving successful so far is Big Lots' store remodel program, which calls for upgrades to existing stores with new fixtures, new flooring, repaired ceilings, new doors, improved lighting, and new signage. The effort is being expanded to stores in four states over this summer.
U.S. operations results for the quarter included: Consolidated income from continuing operations of $32.3 million, or $0.56 per diluted share, which includes a non-recurring, after-tax charge of $3.2 million, or $0.06 per diluted share, associated with store-related legal activity; net sales of $1,274.7 million, up 1.0% from $1,262.2 million a year ago; and a 2.9% decline in comparable store sales.
Adjusted income from continuing U.S. operations totaled $40.0 million, or $0.69 per diluted share non-GAAP, compared to $50.3 million, or $0.77 per diluted share non-GAAP last year.
The home category posted comps that were down in the mid-single digits, and Big Lots expects these near-term trends to "remain difficult and promotional to make room for new product" come this fall.
First quarter results for Big Lots' Canadian operations included: A net loss of $4.4 million, or $0.08 per diluted share non-GAAP, versus a net loss of $6.1 million, or $0.09 per diluted share non-GAAP a year ago; a 13.5% increase in net sales to $36.6 million; and a 13.2% gain in comps.
Big Lots' outlook for its second quarters calls for consolidated income from continuing operations to be in the range of $0.17 to $0.27 per diluted share, compared to $0.36 per diluted share for the second quarter of fiscal 2012. This guidance is based on estimated consolidated net sales in the range of +1% to -1% for the second quarter of fiscal 2013 and consolidated comparable store sales in the range of -2% to -4%.
With regard to its Canadian operation, the company is estimating a loss in the range of $3 million to $6 million, or $0.05 to $0.10 per diluted share non-GAAP, compared to a loss of $3.3 million, or $0.05 per diluted share non-GAAP, for the second quarter of fiscal 2012. This guidance is based on estimated net sales of $37 to $41 million and a comparable store sales increase in the range of 4% to 14%.
Based on the actual results for the first quarter and the guidance provided for the second quarter, Big Lots' has updated its full year fiscal 2013 outlook. The company now estimates adjusted consolidated income from continuing operations will be in the range of $2.87 to $3.12 per diluted share non-GAAP compared to $2.99 per diluted share for fiscal 2012 non-GAAP. This outlook is based on an estimated consolidated net sales increase in the range of 1% to 2% for fiscal 2013 and consolidated comparable store sales in the range of 0% to -1%
The company added it is forecasting adjusted income from continuing U.S. operations to be in the range of $3.00 to $3.20 per diluted share versus $3.21 per diluted share. This outlook is based on an estimated net sales increase for U.S. operations in the range of 1% to 2% and comparable store sales for U.S. operations in the range of 0% to -1%.
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