Broyhill brand helps fuel record-breaking quarter at Big Lots
It was a good quarter at Big Lots, and it's due in part to one of the company's well-known brands. Bruce Thorn, president and CEO of Big Lots, said the retailer saw “unprecedented” and “record-breaking” results in its second quarter ended Aug. 1, demonstrating an increase in same-store sales by 31.3% — the best in its history — and earnings five times larger than a year ago.
Net sales for the quarter totaled $1.64 billion for the Columbus, Ohio-based retailer with more than 1,400 stores. Thorn said all seven categories in the store performed at double-digit increases in sales, notably the outdoor furniture, indoor furniture and soft home goods categories.
Big Lots acquired the Broyhill brand last year, including the intellectual property and designs, rolling it out in the first quarter, and Thorn said the brand had a big Q2. It is on pace to exceed $250 million in sales this year and has the potential to be a $1 billion brand in the future.
He added that the numbers are encouraging since a brand marketing push for Broyhill was delayed due to COVID-19 but customers are recognizing the quality and the brand is expected to expand into housewares and kitchen textiles in 2021.
“I am delighted with our record-breaking results in Q2. Our comp increase was the best in the company's history, and adjusted EPS was the most we've reported in a second quarter, and more than five times what we reported a year ago," Thorn said. "Comp sales were driven by strong results both in-store, where traffic and basket were each up double digits, and online, which drove almost five comp points, and where we acquired more new customers than in any prior quarter."
Other highlights named during the earnings call included a consumables business seeing an increase in sales of 15% year over year, and food up 10% in the quarter.
Thorn said the company also is undergoing a pantry optimization program next week that will be completed in all stores by end of September. The strategy is highlighted by adding a 20-foot section for chemicals and health and beauty that will include store brands and national brands.
Big Lots reported its highest level of volume in e-commerce since the capability launched April 2016, accelerating four times, year over year, and the Instacart same-day delivery partnership saw good results in the quarter.
Thorn made special mention of the new hiring of Big Lots chief merchandising officer Jack Pestello, remarking on his strong experience driving private brands. Pestello drove private brands at Walmart and worked at Daymon.
Moving forward in the new normal of pandemic shopping, Big Lots is poised for more growth, the CEO believed. “Our assortment of everyday essentials and stay-at-home products is exactly what customers want and need in this new way of living, and our balanced offering of thoughtfully curated merchandise differentiates us from competition,” he said.
“With our assortment of everyday essentials and stay-at-home products, we are well positioned for what appears to be a new normal," Thorn said. "Our balanced offering of thoughtfully curated merchandise, neverouts, and closeouts, differentiates us from the competition and continues to surprise and delight our customers with tremendous value.”