Big Lots big disappointment
The nation’s leading closeout retailer offered a bleak outlook for the remainder of the year following worse than expected second quarter results and announced the departure of its top merchant.
Big Lots on Thursday morning said EVP merchandising Doug Wurl had resigned from the company and John Martin had been promoted to the EVP and chief merchandising officer role. Martin had previously served as EVP merchandising after joining the company in 2003, but last April the company moved him into an EVP administration role when Wurl joined the company from Sears Holdings where he served as a VP and general merchandise manager.
Filling Martin’s administration role is Charles W. Haubiel II. He will continue to serve as general counsel and corporate secretary with responsibility for legal and real estate while adding responsibility for human resources and loss prevention. He joined Big Lots in 1997.
In other moves, Lisa Bachmann was elevated to the role of EVP and COO after previously serving as chief information officer. She will retain her CIO responsibilities and add stores operations to her duties. Bachmann has been with Big Lots since 2002 when she joined the company as SVP merchandise planning and allocation. She became CIO in 2005.
The company also named Timothy Johnson CFO. Johnson joined Big Lots in 2000 and previously served as SVP finance.
The personnel moves were announced in advance of the release of disappointing second quarter financial results that saw the company reduce its outlook for the full year. During the second quarter ended July 28, Big Lots said profits from continuing operations declined to $22.1 million, or 36 cents a share, from $35.7 million, or 50 cents as share, the prior year. Sales for the period increased to nearly $1.218 billion from $1.167 billion the prior year as the opening of 18 new stores added sales volume that was offset by a 1.9% U.S. same-store sales decline.
Net sales for U.S. operations for the second quarter increased 7% to $1,183 billion, compared to $1,163 billion while income from continuing U.S. operations totaled 42 cents a share compared to 52 cents.
The performance of company’s recently acquired operations in Canada was more difficult to gauge.
“As a reminder, we acquired our Canadian operations on July 18, 2011, therefore, prior year results include only our 12 days of ownership in the second quarter of fiscal 2011,” the company said in a statement. “Based on materiality to our total operations, we are not required to and have not provided pro-forma information for Canadian operations.
The company did say sales from Canadian operations totaled $35 million and incurred a net loss of $3.3 million that added five cents a share to the total profit decline, compared to the prior year’s sales from the 12 day period of $3.9 million and net loss of $1.2 million or two cents a share.
Based on the company’s performance during the first half of the year, Big Lots reduced its full year profit forecast to a range of $2.80 to $2.95 from earlier guidance that envisioned profits between $3.25 and $3.40 as a worse than expected U.S. performance is partially offset by a better than expected showing in Canada.
Looking at the U.S. business, the company said it expects same-store sales to decline in the low single digit range and profits from continuing operations to range from $3.05 to $3.15 compared to prior guidance of $3.50 to $3.60. Conversely, sales in Canada are expected to range between $152 million and $158 million, compared with prior expectations of sales between $142 million and $152 million. As a result, the operating loss is expected to range from $13 to $15 million, or 22 cents to 26 cents a share, figures that are slightly less worse than earlier expectations for an operating loss in the range of $14 to $16 million, or 23 cents to 26 cents a share.
Big Lot’s is the largest operator of closeout stores in North America with 1,463 Big Lots stores in 48 states and 81 Liquidation World and LW stores in Canada.