Big Lots posts mixed Q4; CEO still on medical leave
Big Lots beat profit expectations for the fourth quarter but reported an unexpected decline in same-store sales amid slow growth in its furniture category.
The discounter also noted that president and CEO David Campisi remains on medical leave. It did not provide any insight as to when he would return.
On Big Lot’s quarterly conference call, executives said that the chain plans to convert about 180 stores into its updated store model, or store of the future format, this year. The concept has a softer, less promotional feel and highlights furniture, seasonal, and soft home and with prominent positioning up front.
Big Lots reported income of $104.8 million, or $2.46 per diluted share, for the quarter ended February 3, from $90.1 million, or $1.99 a share, in the year-ago period. Excluding such non-recurring items as a provisional tax expense, adjusted income totaled $109.3 million, or $2.57 per diluted share, above analysts’ estimates for $2.44 per share. (The fourth quarter of fiscal 2017 included an extra week of operations.)
Comparable store sales decreased 0.1% for the fourth quarter of fiscal 2017, compared to our guidance of flat to an increase of 2%.
Net sales increased to a lower-than-expected $1.62 billion from $1.58. billion last year, with the increase resulting from the extra week, partially offset by a lower store count year-over-year. Same-store sales fell 0.1%, missing Street forecasts of a 1.3% increase.
As previously announced, Big Lots president and CEO David Campisi took a medical leave of absence in early December 2017 and remains on leave. His executive responsibilities are being overseen by Lisa M. Bachmann, executive VP, chief merchandising & operating officer, and Timothy A. Johnson, executive VP and CFO.
In addition, James R. Chambers, Big Lots’ non-executive chair of the board, continues to be available to spend additional time with the leadership team during the duration of Campisi’s medical leave.
The company also announced a new stock repurchase program of up to $100 million in shares, and increased its quarterly dividend by about 20% to 30 cents per share, payable April 6, to shareholders of record March 23.
For the full year, Big Lots posted net income of $189.8 million, or $4.38 per share, up from $152.8 million, or $3.32 per share, a year ago. Net sales increases 1.4% to $5.27 billion and same-store sales increased 0.4%.
Big Lots operates 1,416 stores in 47 states.
GNC plans big expansion in India
General Nutrition Corporation is ramping up its business in India, where the company has had a presence since 2004.
As part of its larger international growth strategy, GNC is working with master franchise partner, Guardian Healthcare Services Pvt. Ltd. to aggressively expand in India. The move comes on the heels of the U.S. retailer entering into a strategic partnership and joint venture with a leading pharmaceutical company in China for the manufacturing, marketing, sale and distribution of GNC-branded products in China.
In India, GNC said it plans to grow from its current position of approximately 50 retail locations, primarily in Guardian pharmacies, to multiple channels, encompassing retail, e-commerce and distribution, among others.
As part of the new strategy, Guardian intends to make GNC products available in approximately 4,000 new retail outlets across Indiaby 2020. The company expects 1,000 retail outlets to add GNC products to their offering this year. GNC India will also market and sell its full product line through the company’s website and via other e-commerce players.
“We are very excited about our expansion plans in India, where there is significant opportunity for growth,” said Ken Martindale, CEO of GNC. “Guardian Healthcare Services is an established player in India’s health and wellness industry and we believe the strength of our two company’s will position us as one of the leaders in this attractive and fast growing market.”
Report: Boxed rejects Kroger Co.’s purchase offer
Boxed is staying private — for now, anyway.
The retailer that sells bulk groceries, household products and other items online rejected a $400 million acquisition offer from Kroger. As a result, the online retailer is pursuing a new funding round to remain private, according to Bloomberg.
A source told Bloomberg that Boxed’s board voted last week to reject the offer from the supermarket chain. While the company also has interest from Amazon, Target, and Costco Wholesale, Kroger was the only company to make a bid.
Boxed has a $470 million valuation.
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