Columbus, Ohio The worst of economic times can yield the best of times for value-priced retailers, especially when the retailer has also improved operational efficiencies.
On Tuesday, Big Lots reported increases in net sales, same-store sales and income. In the second quarter, the close-out retailer’s net sales were up 1.9% to $1.105 billion compared to $1.084 billion for the year-ago period. Same-store sales increased 2.8%, which was on top of an impressive 5.2% increase in same-store sales for the same quarter in fiscal 2007. Net income for the most recent quarter was $26 million vs. $23.4 million last year, and year-to-date net income topped $60 million vs. $52 million in the previous year.
Additionally, Big Lots realized a 30% improvement in operating profit for the second quarter: $43.5 million, or 3.9% of sales, vs. $33.4 million, or 3.1% of sales for the year-ago period.
Big Lots attributed the gains to the 2.8% increase in same-store sales, improved margins and expense control resulting primarily from efficiencies in operations at its stores and distribution center.
The company reported significant improvements in inventory management as well, ending the second quarter with a 2% reduction in inventory, $698 million vs. $714 million last year, which resulted largely from a 1% reduction in average store inventory and a 1% reduction in store count.
At the end of the second quarter, Big Lots had 1,355 stores in 47 states, down from 1,375 stores at the close of fiscal 2006. The company’s total revenues in fiscal 2007 were $4.656 billion.