Today, even as it announced second quarter earnings, Big Lots, Inc. revealed major executive changes and discussed operational test programs designed to improve financial results after the business began softening in the first quarter. The company posted income from continuing operations of $22.1 million, or 36 cents per diluted share, for the second quarter of fiscal 2012 ended July 28 versus $35.7 million, or 50 cents per diluted share, for the 2011 period.

Net sales were $1.22 billion versus $1.17 billion in last year’s second quarter.

Net sales for Big Lots operations in the United States increased 1.7% in the second quarter to $1.18 billion while comparable store sales decreased 1.9%. Second quarter net sales for Canadian operations totaled $35 million. The Canadian operation incurred a net loss of $3.3 million, or five cents per diluted share, non-GAAP. In last year’s second quarter, net sales were $3.9 million and net loss $1.2 million, or two cents per diluted share, non-GAAP. Big Lots acquired its Canadian operations on July 18, 2011. It noted that prior-year results included just 12 days of Big Lots ownership in the 2011 second quarter.

In terms of categories, comps gained in electronics and hardlines, and consumables came in flat. Comps in Furniture and Home were down low single digits, and seasonal was down mid single digits. As a result, Big Lots experienced growth in low-margin categories, executives revealed in a conference call, and worse performance in high-margin segments. Steve Fishman, chairman, president and CEO, said in the conference call that the company plans to begin testing full market remodels in the fall, in the most extensive Big Lots remodel effort ever initiated. The goal of the effort its to bring all stores up to the latest standard and to enhance the shopping experience as a means of driving change in sales and customer behavior. Fishman promised that executives would be selective as they supervise the test, monitoring financial returns closely.

In addition, Big Lots plans to add coolers as a test in five markets beginning in spring 2012. The company also will experiment with accepting SNAP payments, given that more consumers are involved in the Federal nutrition support program. The company also will try new loyalty programs in several markets as well, given that the current program hasn’t boosted transactions. The new loyalty programs will try different reward incentives to generate evidence about what benefits best drive additional transactions. Pulling more customers into Big Lots stores and boosting transactions is the overarching goal of all the tests, Fishman said.

In support of changes Big Lots is making to the operation, the company announced a shuffle in the executive suite. It announced that Doug Wurl, executive vp/merchandising, has left company. At the same time, Big Lots said John Martin has been promoted to evp/chief merchandising officer. He will assume responsibility for the company's merchandising, global sourcing and marketing departments. Martin joined Big Lots in 2003 as evp/merchandising. In April 2011, he shifted focus, taking on the role of evp/administration.

Big Lots additionally announced it has promoted Lisa Bachmann to evp, chief operating officer. She assumes responsibility for store operations while retaining responsibility for the merchandise planning and allocation, information technology, and distribution and transportation services departments. Bachmann will continue serving as the company's chief information officer.

Other promotions include: Charles Haubiel II, to evp, chief administrative officer. He assumes responsibility for the human resources and loss prevention departments while retaining responsibility for legal and real estate. He continues to serve as the company's general counsel and corporate secretary. Timothy Johnson was promoted to senior vp, CFO. He assumes responsibility for the treasury and risk management departments and also will oversee all corporate financial activities. And Michael Schlonsky was named svp/human resources. He will maintain responsibility for talent management and have primary oversight of the human resources department.