Big Lots 2009 Annual Report Download - page 141

25
2009 Compared to 2008
Net Sales
As previously discussed, we manage our business on the basis of one segment: broadline closeout retailing. We
report net sales information for six merchandise categories. Net sales by merchandise category, as a percentage
of total net sales, and net sales change in dollars and percentage in 2009 compared to 2008 were as follows:
2009 2008 Change
($ in thousands)
Consumables ................... $1,456,370 30.8% $1,410,383 30.4% $ 45,987 3.3%
Home ......................... 717,744 15.2 713,103 15.4 4,641 0.7
Furniture ...................... 716,785 15.2 698,276 15.0 18,509 2.7
Hardlines ...................... 677,790 14.3 646,563 13.9 31,227 4.8
Seasonal . . . . . . . . . . . . . . . . . . . . . . 591,321 12.5 585,025 12.6 6,296 1.1
Other ......................... 566,762 12.0 591,933 12.7 (25,171) (4.3)
Net sales . . . . . . . . . . . . . . . . . . . $ 4,726,772 100.0% $4,645,283 100.0% $ 81,489 1.8%
Net sales increased $81.5 million, or 1.8%, to $4,726.8 million in 2009 compared to $4,645.3 million in 2008.
The increase in net sales was principally due to our comparable store sales increase of 0.7%, or approximately
$32 million, and non-comparable store sales, which increased by approximately $37 million. Our comparable
store sales are calculated by using all stores that were open for at least two fiscal years as of the beginning of
the current fiscal year. This calculation may not be comparable to other retailers who calculate comparable store
sales based on other methods or criteria. The average number of stores in operation throughout 2009 and 2008
was approximately 1,354 stores and 1,356 stores, respectively. Following a comparable store sales decrease of
1.5% through the first half of 2009, sales trends improved resulting in a comparable store sales increase of 2.8%
in the second half of 2009 thereby producing an annual comparable store sales increase of 0.7%. Comparable
store sales increased in the low to mid-single digits from September through January due to improvements
in our merchandise offering, and improved discretionary spending trends as we met the first anniversary of
the significant economic turmoil that began to impact us in our fourth fiscal quarter of 2008. Specifically,
comparable store sales increased 5.1% in the fourth fiscal quarter of 2009. Based on these trends and sales
results of February 2010, we estimate 2010 comparable store sales will increase in the range of 3% to 4%.
From a merchandise perspective, sales in most major merchandise categories increased in 2009 compared to
2008. Consumables continued its consistent sales growth throughout the year. Consumers continued to seek
out value when shopping for the everyday household use items that we offer in our Consumables business.
We believe our strategy of offering name brands at competitive prices led to this consistently positive net
sales performance in the Consumables category. The Home category net sales consistently underperformed
through the second fiscal quarter. However, accelerating sales trends in the second half of 2009 due to certain
merchandise assortment changes and the improvement experienced in consumer discretionary spending trends
led to a total sales increase for fiscal 2009. The Furniture category also underperformed through the third fiscal
quarter principally due to lower sales in our mattress department. However, new key items in upholstery and
case goods along with a sales rebound in our mattress department led to a fourth fiscal quarter comparable store
sales increase in the high single digits leading to our overall sales increase of 2.7% for 2009. The Hardlines
category continued its increase in net sales driven by sales of electronics, particularly DVDs, cameras and
televisions. The Seasonal category net sales produced positive results in the second half of the year due to
a comparable sales increase of our Christmas merchandise in the fourth fiscal quarter. The Other category
sales decline is primarily due to three large closeout deals (drugstore merchandise, furniture, and apparel) that
occurred in 2008; fewer closeout deals were sold in the Other category in 2009. Partly offsetting the closeout
deals decline was an increase in toy department sales.