Big Lots Earnings Call Nuggets: Black Friday Performance and Merchandising

Big Lots (NYSE:BIG) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.

Black Friday Performance

Meredith Adler – Barclays Capital: I have a couple of questions. The first would be about the performance for Black Friday or that of the – post Thanksgiving holiday weekend. And to the extent that it’s possible to look back through November and sort of adjust for Hurricane Sandy, would you have said that the month of November would have been disappointing or encouraging, if you could have adjusted for that.

Timothy A. Johnson – SVP, Finance: Meredith, this is TJ. I’ll start and maybe Steve can chime in on some of the categories as it relates to November. But Hurricane Sandy did have an impact in a region of the country where we’ve had some growth strategies in the Northeast up and down the coast to add stores. So that did have an impact on our results. We’re not quantifying at this time as to the specifics of comps would have been X versus Y. But certainly we saw an impact to our business during that timeframe. It’s difficult to really pull apart given the fact that there was a pretty significant event going on with the election during that timeframe. For the month of November though it is fair to say that as we worked through the month and got to really the last week of the month with a pretty robust Thanksgiving ad and a lot of plans and work that went into the Black Friday weekend that we did see our business trends improved. Again, I think that’s probably consistent with what you’ve heard from other retailers at least as we reviewed the November sales releases.

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Steven S. Fishman – Chairman, CEO and President: I’d only add that particularly the businesses that we really stressed and that we have aggressive plans from our Thanksgiving day perspective which was good and actually as the day went on we saw the day improved, our feelings were that probably a lot of people were trying to get out for those early openings to some of the other people and hopefully stop by our operation, but the whole day was good and Black Friday was acceptable so that those two days, particularly in the seasonal areas and we’ve kind of reiterated and talked about the case goods part of the business because of the Fireplace business. Electronics particularly in tablets and accessories all performed to expectations or better. So, I think, that’s why we are tempering our commitment to the quarter, but certainly we saw trend changes and things were better at the end of the month and they were in the beginning of the month and all along I will say frankly that we’ve anticipated this I’ve seen, particularly the major election years every four years particularly as you get into the middle to the end of October in the first week or two of November have always been a challenge and unfortunately this was no different than just compounding the Sandy issue didn’t help.

Merchandising

Joe Feldmen – Tesley Advisory Group: The question we had was on merchandising. Anything you can help us understand in terms of some of the organizational changes that you’ve made within the merchandising operation this year and how that’s maybe had an impact on the quarter or is that still more going to happen, the impact will really be next year, we’ll see?

Steven S. Fishman – Chairman, CEO and President: Well, I mean, I think we were pretty open and honest with what happened to us in the early and into middle part of the year and clearly, we made a change 90 days ago at the very top level in merchandising, but there has been stabilization since that period of time. I think we believe very strongly that merchandisers and great merchants who are stabilized in areas for extended period of time always perform a lot better in our business and understand it a lot better. John and I feel pretty good about where our organization is right this second compared to where it was even 90 days ago and our anticipation is, we will start to reap those benefits as we go into the first and second quarter of next year. So, stabilizing the merchants and not getting picked off by competitors, which is not been a history that we had been used to for a long periods of time, but hopefully people want great people from great organizations, but people want to be here, people want to do great jobs, they are incentivized the right way more than competitively and we’ve got a really great group of people today that I am very, very comfortable with and very proud of.

Joe Feldmen – Tesley Advisory Group: If I could just have a quick follow-up, the loyalty program, I know, any updated color, and things are testing and any early reads or…?

Steven S. Fishman – Chairman, CEO and President: I think it’s too early to talk about the tests since we really are just in the midst of them. The loyalty program has over 14 million loyalty members, which is just an amazing number to us and continues to grow, although not at the rate it was growing two or three years ago, but we continue to see people wanting to come online and we are looking at some creative and innovative things right now that hopefully we will be able to talk about a whole lot more on the next conference call.

A Closer Look: Big Lots Earnings Cheat Sheet>>