Big Lots Goes from Profit to Loss in Q3; Fishman to Retire
COLUMBUS, Ohio-A heavy expense load and lagging sales pushed Big Lot's third-quarter bottom line into the red, with a net loss of $6 million compared to net income of $4.2 million in the third quarter of last year.
The discount retailer also announced this morning that Steve Fishman, chairman, president and CEO, plans to retire from his roles. Fishman has told the company that he will continue in his posts until a successor is appointed.
Net sales in the quarter, which ended on Oct. 27, were essentially flat compared to last year at $1.1 billion. In its U.S. stores, Big Lots' same-store sales for stores open at least 15 months fell 4.6 percent.
The company's U.S. stores also incurred a loss from continuing operations of $1.7 million, compared to income from continuing operations of $11.4 million last year. Its Canadian operations incurred a net loss of $4.3 million, compared to a net loss of $7.1 million in last year's third quarter.
Gross margin dropped 90 basis points to 38.1 percent. Selling, general and administrative expenses, while flat versus last year in dollars, gained 20 basis points as a percentage of sales to 36.4 percent. In addition, Big Lots reported a 16.3 percent increase in depreciation expense in the quarter.
Big Lots said it expects the fourth quarter to produce a net sales gain of from 3 to 7 percent, with a same-store sales decline in the low to mid-single digits.
Fishman joined Big Lots in 2005. A company statement credited him with increasing the retailer's sales and productivity per selling square foot, growing operating profit and income from continuing operations, improving inventory turnover and spearheading Big Lots' expansion into Canada.