Closeout retailer Big Lots
You might think a difficult retail environment would benefit a store like Big Lots, and generally it has. Sales, powered in good part by expansion, have risen for several years running. But investors have had a bumpy ride these last few years, as the company's shares have jumped around like a woven wooden deer brought clumsily to life.
Results for the company's fiscal third quarter (ended Nov. 1) illustrate why: Despite sales growth, the company is losing money. For the first nine months of the year, sales and same-store sales were up on increased transactions and value per sale, but decreased gross margins and a rise in selling, general, and administrative (SG&A) expenses -- as well as significant interest expense -- caused the company to lose more than $4 million on some $2.85 billion in revenue.
But there's some good news in Big Lots' quarterly results, too. Among the highlights were a quarterly same-store sales increase of 4.3% (the company measures this using stores open for at least two years, rather than the more usual one year), news of improved November sales, reduced debt, and controlled inventory growth.
All in all, though, Big Lots has much to prove. In a difficult competitive environment -- included among its competitors are discount retailers Wal-Mart
Dave Marino-Nachison can be reached at email@example.com.