Big Lots Inc. (BIG, Financial) filed Quarterly Report for the period ended 2010-07-31.
Big Lots Inc. has a market cap of $2.65 billion; its shares were traded at around $32.68 with a P/E ratio of 11.9 and P/S ratio of 0.6. Big Lots Inc. had an annual average earning growth of 32.4% over the past 5 years.BIG is in the portfolios of Westport Asset Management, John Hussman of Hussman Economtrics Advisors, Inc., David Dreman of Dreman Value Management, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Gross margin dollars increased $28.0 million or 6.5% to $462.4 million for the second quarter of 2010, compared to $434.4 million for the second quarter of 2009. The increase in gross margin dollars was principally due to higher net sales of $55.7 million, which increased gross margin dollars by approximately $22.3 million, in addition to the higher gross margin rate, which increased gross margin dollars by approximately $5.7 million. Gross margin as a percentage of net sales increased 50 basis points to 40.5% in the second quarter of 2010 compared to 40.0% in the second quarter of 2009. The gross margin rate increase was principally due to both lower markdowns and shrink costs as a percent of sales combined with the favorable merchandise mix impact of strong sales of our higher margin Home and Seasonal categories. These favorable impacts were partially offset by higher freight costs, both domestic and import, in the second quarter of 2010.
Selling and administrative expenses were $380.4 million for the second quarter of 2010, compared to $367.8 million for the second quarter of 2009. The increase of $12.6 million or 3.4% was primarily due to higher sales and a net increase of 24 stores compared to the end of the second quarter of 2009. Compared to last year, the largest increases were in store payroll of $8.1 million, credit card/bank fees of $3.1 million, share-based compensation expense of $2.6 million, and store rents of $2.1 million. Partially offsetting these items was a decrease in advertising expenses of $2.2 million and a $1.9 million reduction in distribution and outbound transportation costs. The increase in store payroll was principally due to the increased number of stores and higher sales. Share-based compensation expense was higher principally due to fiscal 2010 restricted stock awards having a higher fair value than prior year awards, based on our higher stock price in March 2010 as compared to March 2008 and 2009. Store rents increased primarily due to the increased number of stores. Credit card/bank fees increased as a result of higher rates charged by debit card network providers and from the increased sales. Advertising expense decreased primarily due to the elimination of one advertising circular during the quarter, along with lower printing and distribution costs. The reduction in distribution and outbound transportation costs was primarily the result of the integration of our California furniture distribution operations into our regional distribution centers in July 2009 and the benefits from the renegotiation of our dedicated carrier contracts with more favorable rates in August 2009.
Depreciation expense decreased $0.1 million to $18.8 million in the second quarter of 2010 compared to $18.9 million for the second quarter of 2009. Depreciation expense as a percentage of sales leveraged, or decreased, by 10 basis points compared to the second quarter of 2009.
Net sales increased $149.2 million or 6.7% to $2,377.5 million in the year-to-date 2010, compared to $2,228.2 million in the year-to-date 2009. Comparable store sales for stores open at least two years at the beginning of 2010, increased 4.9%, which increased net sales by $104.1 million. In addition, net sales increased by $49.0 million through the net addition of 24 stores since the end of the second quarter of 2009. Furniture, Home, and Seasonal had the largest sales gains. Sales increased in all departments of the Furniture category driven by successful promotional events and sales of new styles introduced during the year. The Home category continued its trend of increasing sales across most of its departments with the largest gain in domestics, as we have improved the value of our branded offerings. The Seasonal category increase was due to higher sales of summer and lawn & garden items, as customers responded to the value in our higher priced items. The Hardlines category sales improvement was primarily driven by the electronics department through the sales of video games which we began selling in the third fiscal quarter of 2009. The decrease in the Other category was primarily driven by lower sales in the infant department.
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Big Lots Inc. has a market cap of $2.65 billion; its shares were traded at around $32.68 with a P/E ratio of 11.9 and P/S ratio of 0.6. Big Lots Inc. had an annual average earning growth of 32.4% over the past 5 years.BIG is in the portfolios of Westport Asset Management, John Hussman of Hussman Economtrics Advisors, Inc., David Dreman of Dreman Value Management, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Net sales increased $55.7 million or 5.1% to $1,142.3 million in the second quarter of 2010, compared to $1,086.6 million in the second quarter of 2009. The increase in net sales was principally due to a 3.8% increase in comparable store sales for stores open at least two years at the beginning of 2010, which increased net sales by $39.2 million. Also, net sales increased by $22.1 million through the net addition of 24 stores since the end of the second quarter of 2009. Furniture, Home, and Seasonal had the largest sales gains as customers increased their spending in these discretionary categories. The Furniture category experienced increased sales across all departments, in particular case goods and mattresses, as customers responded to both promotional events and new styles recently introduced. The Home category continued its trend of increasing sales across most of its departments with the largest gain in domestics, as we have improved the value of our branded offerings. The Seasonal category increase was due to higher sales of summer and lawn & garden items, as customers responded to the value of our higher priced merchandise. The Hardlines category sales improvement was primarily driven by the electronics department through the sales of video games which we began selling in the third fiscal quarter of 2009. The decrease in the Other category was primarily driven by the absence of certain drugstore closeout deals in 2010 that occurred in 2009 and the timing of closeout opportunities in the infant department.Gross margin dollars increased $28.0 million or 6.5% to $462.4 million for the second quarter of 2010, compared to $434.4 million for the second quarter of 2009. The increase in gross margin dollars was principally due to higher net sales of $55.7 million, which increased gross margin dollars by approximately $22.3 million, in addition to the higher gross margin rate, which increased gross margin dollars by approximately $5.7 million. Gross margin as a percentage of net sales increased 50 basis points to 40.5% in the second quarter of 2010 compared to 40.0% in the second quarter of 2009. The gross margin rate increase was principally due to both lower markdowns and shrink costs as a percent of sales combined with the favorable merchandise mix impact of strong sales of our higher margin Home and Seasonal categories. These favorable impacts were partially offset by higher freight costs, both domestic and import, in the second quarter of 2010.
Selling and administrative expenses were $380.4 million for the second quarter of 2010, compared to $367.8 million for the second quarter of 2009. The increase of $12.6 million or 3.4% was primarily due to higher sales and a net increase of 24 stores compared to the end of the second quarter of 2009. Compared to last year, the largest increases were in store payroll of $8.1 million, credit card/bank fees of $3.1 million, share-based compensation expense of $2.6 million, and store rents of $2.1 million. Partially offsetting these items was a decrease in advertising expenses of $2.2 million and a $1.9 million reduction in distribution and outbound transportation costs. The increase in store payroll was principally due to the increased number of stores and higher sales. Share-based compensation expense was higher principally due to fiscal 2010 restricted stock awards having a higher fair value than prior year awards, based on our higher stock price in March 2010 as compared to March 2008 and 2009. Store rents increased primarily due to the increased number of stores. Credit card/bank fees increased as a result of higher rates charged by debit card network providers and from the increased sales. Advertising expense decreased primarily due to the elimination of one advertising circular during the quarter, along with lower printing and distribution costs. The reduction in distribution and outbound transportation costs was primarily the result of the integration of our California furniture distribution operations into our regional distribution centers in July 2009 and the benefits from the renegotiation of our dedicated carrier contracts with more favorable rates in August 2009.
Depreciation expense decreased $0.1 million to $18.8 million in the second quarter of 2010 compared to $18.9 million for the second quarter of 2009. Depreciation expense as a percentage of sales leveraged, or decreased, by 10 basis points compared to the second quarter of 2009.
Net sales increased $149.2 million or 6.7% to $2,377.5 million in the year-to-date 2010, compared to $2,228.2 million in the year-to-date 2009. Comparable store sales for stores open at least two years at the beginning of 2010, increased 4.9%, which increased net sales by $104.1 million. In addition, net sales increased by $49.0 million through the net addition of 24 stores since the end of the second quarter of 2009. Furniture, Home, and Seasonal had the largest sales gains. Sales increased in all departments of the Furniture category driven by successful promotional events and sales of new styles introduced during the year. The Home category continued its trend of increasing sales across most of its departments with the largest gain in domestics, as we have improved the value of our branded offerings. The Seasonal category increase was due to higher sales of summer and lawn & garden items, as customers responded to the value in our higher priced items. The Hardlines category sales improvement was primarily driven by the electronics department through the sales of video games which we began selling in the third fiscal quarter of 2009. The decrease in the Other category was primarily driven by lower sales in the infant department.
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