In light of its record performance, during a conference call, management raised its guidance to call for comp-store sales increases of between 1% and 3% for each of the coming quarters of this year. It now anticipates an increase of from 42% and 47% in full-year 2007 income, compared with 2006.
Seasonal merchandise, furniture, electronics and consumables led sales during the quarter, said Steve Fishman, chairman, president and CEO, during a conference call. He cited consumer electronics in general and TVs in particular as "big deals" that would be available for the locally based retailer in coming months.
"There's a lot of chaos going on that that market now," he said. "Within the past seven to 10 days, a lot of deals have been popping up. We anticipate (obtaining) some great value and brand names," he added, but declined to disclose where these deals would be coming from. The closeout specialist relies on obtaining surplus product from other retailers as well as from suppliers.
Fishman also said he expected some "fabulous branded deals" in furniture in the third quarter. "We're getting a lot more, higher-price deals in furniture," he said. Furniture now represents about 15% of the company's annual business, as does seasonal merchandise. Consumables, which include food and health and beauty aids, account for 30% of total annual business.
The comp-store increases were achieved despite a decrease in ad expenditures, Fishman reported. The company has begun a shift in media, diverting significant dollars from print circulars into TV, particularly for this year's fourth quarter. Fishman said the commercials are "really different," and will "drive home the great brands we offer."
Approximately 70 stores were earlier targeted for a retrofit. Of those, about half already have full-size furniture departments. A new point-of-sale system is up and running in 435 stores and will be in 700 units by the end of third quarter with the remainder completed in 2008.
Big Lots operates 1,369 units in 47 states and also sells online. BIG common stock closed at $28.91 a share on the NYSE on Aug. 29, up nearly 10% for the day. This compares with a 52-week high of $36.15 a share on this May 31 and a 52-week low of $18.12 a share on Sept. 7, 2006.
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