Big Lots Inc. (NYSE:BIG) Q3 2017 Earnings Conference Call Transcript
Dec 01, 2017 • 08:00 am ET
Ladies and gentlemen, welcome to the Big Lots Q3 2017 Earnings Conference Call. This call is being recorded. During the session, all lines will be muted until the question-and-answer session of the call.
At this time, I'd like to introduce today's first speaker, Andy Regrut, VP of IR.
Thanks, Emma, and good morning, everyone. Thank you for joining us for our third quarter conference call. With me here today in Columbus are David Campisi, our CEO and President; and Tim Johnson, EVP, Chief Administrative Officer and CFO.
(Forward-Looking Cautionary Statements)
All commentary today is focused on adjusted non-GAAP results. For the third quarter of fiscal 2017, this excludes after-tax income of $1.9 million, or $0.04 per diluted share, associated with a gain from insurance recoveries on merchandise-related legal matters. Reconciliations of GAAP to non-GAAP adjusted earnings are available in today's press release.
This morning, David will start the call with a few opening comments. T.J. will review the financial highlights from the quarter and the outlook for fiscal 2017, and David will complete our prepared remarks before taking your questions.
With that, I'll now turn the call over to David.
Thanks, Andy, and good morning, everyone. I'm very pleased with our third quarter results, particularly given the constantly changing highly competitive retail environment. Historically, Q3 has been challenging for BIG as the business transitions out of summer months and prepares for the holiday shopping season. However, our Ownable and Winnable merchandise strategies continue to produce consistent results.
Q3 increased 1%, which is in line with our guidance, and adjusted EPS was slightly above the high-end of our guidance. From a merchandise category perspective, we experienced a healthier breadth of performance in Q3. Furniture was up low-single digits on top of a 5% increase last year. Good job to Robert and the furniture team for growing sales and gaining market share again this quarter despite some high industry-wide challenges over the Labor Day time period.
Mattresses performed best, benefiting from new product and quality upgrades to our popular Serta program. Upholstery also performed well during the quarter as the quality and styling gets better each season. And our financing options of Easy Leasing and Big Lots Credit Card continued to be important to our strategy and drive year-over-year growth. Jennifer loves the recent change to the Easy Leasing program with $49 out the door, is using it in a much bigger basket -- creating a bigger basket.
Consumables, is next, also increased -- you know what, I skipped over Soft Home. I'm going to back up just for one second. Soft Home was actually up mid-single digits, up 6%. My apologies to the team. Last year with strength in Bath, Decorative -- or this year increased with Bath, Decorative, Textiles, Flooring and Frames. Great job by Martha, Kevin and the entire team for comping the comp with well planned out coordinated strategies. A successful expansion of Bath, improved in space productivity in Window, and elevating the QBFV and Area Rugs,