Big Lots focused on furniture as sales dip
It looks like furniture is turning out to be a winning focus for Big Lots, which reported a big boost in profits during the fourth quarter.
Big Lots reported that net income for the period ended Feb. 3 increased 16.4% to $104.8 million from $90.1 million in the prior year. In Q4, same store sales at Big Lots decreased 0.1%, compared to guidance of flat to an increase of 2%.
In a call with investors, Chief Operating Officer Lisa Bachmann said the company is seeing sales increases in the furniture category, making it the best performing category in stores that have been remodeled to conform with its new "Store of the Future" format.
Last year Big Lots unveiled its “Store of the Future” format, which showcases furniture, as well as seasonal and consumables. The company has said the new format is part of an effort to rebrand itself as “a community retailer offering trustworthy value and friendly service.”
The company plans to remodel more than 200 more stores this year, Bachmann said.
In its first quarter, the company expects to see earnings of $1.15-1.22 per share, excluding non-recurring items, which fell short for expectations. This guidance assumes a comparable store sales increase in the range of flat to slightly negative.
For the full fiscal year 2019, the company expects to see earnings of $4.75-4.95. The company is also forecasting same store sales to increase in the low single digit range and forecasting cash flow of approximately $120-130 million.
On March 7, the company's Board of Directors approved a share repurchase program providing for the repurchase of up to $100 million of its common shares.
The company also noted that David Campisi, President and CEO, took a medical leave of absence in early December 2017 and remains on leave. During his medical leave, Campisi's executive responsibilities are continuing to be overseen by Lisa M. Bachmann, Executive Vice President, Chief Merchandising & Operating Officer, and Timothy A. Johnson, Executive Vice President, Chief Administrative Officer & Chief Financial Officer.
In addition, James R. Chambers, the company's non-executive chair of the Board, continues to be available to spend additional time in Columbus with the leadership team during the duration of the medical leave.
Big Lots employs over 35,000 associates across the U.S. and operates approximately 1,400 stores in 47 states.