Big Lots 2013 Annual Report Download - page 169

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2013 COMPARED TO 2012
U.S. Segment
Net Sales
Net sales by merchandise category (in dollars and as a percentage of total net sales), net sales change (in dollars and
percentage), and comparable store sales (“comp” or “comps”) in 2013 compared to 2012 were as follows:
(In thousands) 2013 2012 Change Comps
Furniture & Home Déco
r
$ 1,072,410 20.9% $ 1,060,993 20.4% $ 11,417 1.1 % (0.5 )%
Seasonal 958,681 18.7 971,003 18.6 (12,322) (1.3) (2.9)
Consumables 918,124 17.9 905,444 17.4 12,680 1.4 1.0
Food 747,840 14.6 742,267 14.2 5,573 0.8 0.0
Hard Home 514,232 10.0 543,954 10.4 (29,722)(5.5) (6.1)
Electronics & Accessories 486,331 9.5 556,658 10.7 (70,327) (12.6) (13.1)
Soft Home 427,137 8.4 431,999 8.3 (4,862)(1.1) (2.1)
N
et sales $ 5,124,755 100.0% $ 5,212,318 100.0% $ (87,563) (1.7 )%
(2.7
)%
In the fourth quarter of 2013, we realigned select merchandise categories to be consistent with the realignment of our
merchandising team and changes to our management reporting. Our U.S. segment now uses the following merchandise
categories, which match our internal management and reporting of merchandise net sales: Food, Consumables, Soft Home,
Hard Home, Furniture & Home Décor, Seasonal, and Electronics & Accessories. The Food category includes our beverage &
grocery, candy & snacks, and specialty foods departments. The Consumables category includes our health and beauty, plastics,
paper, chemical, and pet departments. The Soft Home category includes the fashion bedding, utility bedding, bath, window,
decorative textile, and flooring departments. The Hard Home category includes our small appliances, table top, food
preparation, stationary, greeting card, tools, paint, and home maintenance departments. The Furniture & Home Décor category
includes our upholstery, mattress, ready-to-assemble, case goods, home décor, and frames departments. The Seasonal category
includes our lawn & garden, summer, Christmas, toys, books, sporting goods, and other holiday departments. The Electronics
& Accessories category includes the electronics, jewelry, apparel, hosiery, and infant accessories departments. Fiscal 2013 and
2012 sales results have been reclassified to reflect this realignment.
Net sales decreased $87.6 million or 1.7% to $5,124.8 million in 2013, compared to $5,212.3 million in 2012. The decrease in
net sales was primarily driven by a 2.7% decrease in comparable store sales, which reduced net sales by $131.5 million, and the
reduction of one week of sales in 2013 compared to 2012, as 2012 was a 53-week retail calendar year. Our comps are
calculated by using all stores that were open for at least fifteen months. This decline was partially offset by an increase of
$43.9 million, principally due to operating a higher average number of open stores during 2013 than 2012. Consumables
experienced a comp increase, which was principally driven by growth in our pet department, which benefited from a product
and space expansion during the first half of 2013. Food generated a flat comp, which was comprised of negative comps in the
first half of 2013 and positive comps during the second half of 2013, as customers responded to improved consistency of
quality, branded product assortments and closeouts in most major departments. The slight comp decrease in Furniture & Home
Décor was driven by comp decreases in our home décor offerings, partially offset by a comp increase in our traditional
furniture business (e.g. upholstery, mattresses, case goods, and ready-to-assemble departments). By re-aligning, our home
décor and frames departments with our upholstery and case goods, we anticipate that we will be able to better coordinate our
merchandise offerings and presentation, which should improve their comp performance. The decrease in Soft Home comps
occurred in most departments, which was a significant contributing factor to the re-alignment of the former Home category.
We believe separating Soft Home and Hard Home merchandise and aligning our merchants in those areas will narrow their
focus and allow us to provide an assortment that is consistent with our core customer’s needs. The decrease in our Seasonal
category’s comp was driven by an underperformance during our holiday selling season, particularly in our toys and Christmas
trim departments, which was negatively impacted by the snow and cold weather which occurred early in the holiday selling
season. The Seasonal category decrease was partially offset by a positive performance in our lawn & garden department driven
by a better merchandise assortment in our patio offerings and a favorable summer weather pattern in 2013 compared to 2012.
The decrease in Hard Home comps occurred in most departments and was driven by our home maintenance, auto, tools, and
paint departments, which was a primary consideration when determining to exit these classifications after continued
underperformance. The decrease in comps in Electronics & Accessories was primarily driven by lower electronics sales,
particularly in tablet, digital camera, gaming and DVD products, as customers have not responded to our assortment of product