Comparable store sales for Big Lots in its fourth fiscal quarter of 2004 (ended Jan. 29) declined 1.3% compared with Q4 2003, which the company attributed to a blend of a 1.6% increase in the value of average transactions and a 2.9% decrease in the number of transactions. Comp-store sales were flat for the entire year of 2004 when compared with 2003; the value of the average transaction increased 2%, but the number of transactions decreased 2%.
Net sales for the fourth quarter of '04 were about $1.38 billion, compared to net sales of about $1.32 billion for the same period of fiscal 2003. Net sales for the fiscal 2004 were $4.375 billion, compared to $4.174 billion in fiscal 2003.
According to the company, the growth in transaction size resulted from strong sales of its hardlines and home decorative merchandise, but this was partially offset by poorer results in holiday decorative, toys, and other gift categories. Soft sales in these seasonally sensitive categories led Big Lots to be more promotional with pricing in December and January than the company has originally planned.
"We entered 2004 with confidence that we could grow our earnings," Potter said. "Instead, our core customers were faced with uncertainties in employment, higher gas prices, and other economic and international events. We've seen these pressures before, but in all my time at Big Lots, I don't think I've seen a year in which these factors remained for such an extended period."
Potter noted that these things were beyond the company's control. "But it's also important to evaluate our performance in areas in which we do have control, especially merchandising," he said. "The single biggest learning from 2004 is that we must resist becoming too predictable or rigid in our merchandise assortment."
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