Big Lots (BIG)
Q3 2012 Earnings Call
December 04, 2012 8:00 am ET
Andrew D. Regrut - Director of Investor Relations
Steven S. Fishman - Chairman, Chief Executive Officer and President
Charles W. Haubiel - Chief Administrative Officer, Executive Vice President, General Counsel, Corporate Secretary and Member of Executive Committee
Joe R. Cooper - Principal Accounting Officer, Executive Vice President and President of Big Lots Canada
Timothy A. Johnson - Chief Financial Officer and Senior Vice President
Meredith Adler - Barclays Capital, Research Division
Joseph I. Feldman - Telsey Advisory Group LLC
Peter J. Keith - Piper Jaffray Companies, Research Division
David M. Mann - Johnson Rice & Company, L.L.C., Research Division
Jeffrey S. Stein - Northcoast Research
Matthew Siler - Deutsche Bank AG, Research Division
John Zolidis - The Buckingham Research Group Incorporated
Matthew R. Boss - JP Morgan Chase & Co, Research Division
Anthony C. Chukumba - BB&T Capital Markets, Research Division
Patrick McKeever - MKM Partners LLC, Research Division
Anthony C. Lebiedzinski - Sidoti & Company, LLC
Previous Statements by BIG
» Big Lots Management Discusses Q2 2012 Results - Earnings Call Transcript
» Big Lots Management Discusses Q1 2012 Results - Earnings Call Transcript
» Big Lots' CEO Discusses Q4 2011 Results - Earnings Call Transcript
Andrew D. Regrut
Thanks, Allan, and thank you, everyone, for joining us for our third quarter conference call. With me here today in Columbus are Steve Fishman, our Chairman, CEO and President; Chuck Haubiel, Executive Vice President and Chief Administrative Officer; Joe Cooper, Executive Vice President and President of Big Lots Canada; Tim Johnson, Senior Vice President and Chief Financial Officer.
Before we get started, I'd like to remind you that any forward-looking statements we make on today's call involve risk and uncertainties and are subject to our Safe Harbor provisions as stated in our press release and our SEC filings. And that actual results can differ materially from those described in our forward-looking statements. Our consolidated financials include results from our U.S. operations and from our Canadian business that was acquired on July 18, 2011. Our statements also include immaterial amounts of discontinued operations activity. All commentary today is focused on adjusted non-GAAP results from continuing operations. A reconciliation of GAAP to non-GAAP adjusted earnings and guidance is available in today's press release.
This morning, Steve will start the call with a few opening comments, Chuck will provide an update on real estate, Joe will discuss Canada, T.J. will comment on the financial results for the quarter and our guidance, and Steve will complete our prepared remarks before taking your questions.
So with that, I'll turn it over to Steve.
Steven S. Fishman
Thanks, Andy, and good morning, everyone. For those of you who have followed Big Lots for any length of time, you know the third quarter has been our most challenging part of the year. It's the lowest volume quarter, and quite frankly, we're in transition, meaning a significant amount of time and focus is centered on preparing for the upcoming holiday Q4 shopping season.
As we entered the third quarter this year, we knew that there would be some anxiety on part of the consumer, a national election, an uncertain economy and a persistently difficult job market. Then towards the end of Q3, significant and severe weather issues impacted the eastern regions of the company, where many retailers, including us, have a strong concentration of stores. The combination of these factors made it challenging across the retail sector. Yet despite all of this, we delivered the sales that were consistent with what we told you back in August, with some businesses performing better than others.
And while I'm far from satisfied, it's important to highlight the trends in a few key categories. Electronics comped up low single digits for the quarter against some lofty comps a year ago, proving to us this can be a year-round business. Consumables comped down low singles, with businesses being flattish until October. Furniture, down low single digits in the quarter. Upholstery and mattresses reached positive, with the decline coming in case goods and RTA. We believe we have a strong growth opportunity in case goods and fireplaces for Q4 holiday period.
I know we're well positioned from a quality and value standpoint. Our performance will now depend upon customer demand for the product and when and if cooler weather arrives this holiday season. Early sales of Christmas trim-a-tree were flattish in August and September but were softer in October. I do believe we have a strong assortment, and we're prepared to be aggressive in this key holiday season. As anticipated, the balance of our more discretionary businesses were challenged. T.J. will provide more color on Q3 results in a few minutes, and I'll be back to wrap up and offer some holiday thoughts.
But now I'm going to turn the Chuck -- the call over to Chuck for an update on real estate activity.
Charles W. Haubiel
Thanks, Steve. During the third quarter, we opened 27 new stores in the U.S. and closed 8, leaving us with 1,482 stores and total selling square footage of 32.2 million. In the first 3 quarters of this year, we opened 55 new stores and closed 23 locations. For fiscal 2012, we now believe we will open 87 new stores and close 42 stores, ending the year with 1,495 stores in the U.S. As we mentioned on our last call, we began testing full market remodels this fall. The program is designed to provide our customers with a like-new in-store experience. It represents our most extensive remodel effort to date, addresses all physical aspects of the store and presents a new merchandise layout or traffic pattern for our customers.