3-year comparable sales growth of 2% with
significant slowdown in April; Q1 EPS loss of $0.39
3-year comps for May to date running up
mid-teens as promotions drive compelling value proposition
Company remains confident in long-term value
creation opportunity as it helps customers live BIG and save
LOTS
For the Q1 Results Presentation, Please
Visit: https://www.biglots.com/corporate/investors
COLUMBUS, Ohio, May 27, 2022
/PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today reported a net
loss of $11.1 million, or
$0.39 per share, for the first
quarter of fiscal 2022 ended April 30,
2022, which compares to the company's guidance, as provided
on March 3, 2022, of $1.10 to $1.20 net
income per diluted share. Net income for the first quarter of
fiscal 2021 was $94.6 million, or
$2.62 per diluted share.
Net sales for the first quarter of fiscal 2022 totaled
$1.37 billion, a 15.4% decrease
compared to $1.63 billion for the
same period last year, and an increase of 6.1% compared to the
first quarter of 2019. The decline to last year was driven by a
comparable sales decrease of 17.0%, as the company lapped an 11.3%
comparable sales increase last year. Net new stores and relocations
contributed approximately 160 basis points of sales growth.
Commenting on today's results announcement, Bruce Thorn, President and CEO of Big Lots
stated, "Our business has grown significantly over the past two
years as we benefitted not only from home-related spending but from
the positive growth fueled by our Operation North Star initiatives.
We have greatly improved our customer shopping experience,
evidenced by an all-time high Net Promoter Score of 85% in Q1.
E-commerce remains a standout, and now accounts for over 7% of our
sales, with same-day deliveries growing 20% over last year. Our
Broyhill and Real Living private label brands reached close to 30%
of our sales, positioning us well to pursue consumer trade-down
opportunities ahead.
These accomplishments helped get 3-year comparable sales growth
off to a solid start in February and March, but trends materially
slowed in April, resulting in a need to increase markdowns. We
believe the slowdown was caused by the spending pressure our
consumers felt from higher gas prices and broader inflation, which
is affecting discretionary purchases across the retail industry. As
a result, we missed our sales plan by approximately $100 million, the vast majority in April, while
supply chain impacts across gross margin and SG&A continued to
be significant headwinds."
Mr. Thorn continued, "We have reacted quickly to the changes in
consumer demand by increasing value offerings to our customers,
resulting in a significant acceleration to three-year comparable
sales growth in the mid-teens in May. We expect the environment to
remain challenging and we remain highly focused on managing the
business prudently, which includes aggressively right-sizing our
inventories over the course of Q2. We are focused on opening price
points that drive traffic and improving gross margin rates through
capitalizing on significant close-out opportunities, more targeted
pricing and promotions, minimizing supply chain charges, and
reducing shrink. We are also accelerating SG&A cost
reductions to generate over $70
million in additional savings this year. Further, we are
strengthening our balance sheet by temporarily scaling back capital
expenditures associated with new store openings and remodels.
I am thankful to our talented team of 35,000 associates, who
remain committed to our noble purpose of helping our customers Live
BIG and Save LOTS, as they manage through increasingly tighter
budgets buffeted by inflation. Continuing to delight our customers,
regardless of economic conditions, is key to unlocking the full
potential of Operation North Star, which we continue to believe
will drive long-term sales potential of $8 to $10 Billion
with a 6% to 8% operating margin."
Inventory and Cash Management
Inventory ended the first quarter of fiscal 2022 at $1,338.7 million compared to $901.5 million for the same period last year,
with the 48.5% increase encompassing significantly higher unit
costs and a significant increase in in-transit inventory.
The company ended the first quarter of fiscal 2022 with
$61.7 million of Cash and Cash
Equivalents and $270.8 million of
Long-term Debt, compared to $613.3
million of Cash and Cash Equivalents and $32.1 million of Long-term Debt as of the end of
the first quarter of fiscal 2021. The company expects both
inventory levels and borrowings to reduce significantly during the
second quarter.
Dividend and Share Repurchases
As also announced in a separate press release, on May 24, 2022, the Board of Directors declared a
quarterly cash dividend of $0.30 per
common share. This dividend payment of approximately $8.7 million will be payable on June 24, 2022, to shareholders of record as of
the close of business on June 10,
2022. The company did not execute any share repurchases
during the quarter. The company has $159
million remaining under its December
2021 $250 million
authorization.
Company Outlook
For the second quarter, the company expects three-year comps to
accelerate to positive mid to high-single digits, equating to
mid-to-high single digit negative comps versus 2021. Net new stores
will add about 150 bps of growth versus 2021. The company
expects that promotional activity will drive its second
quarter gross margin rate into the low-30's and that SG&A
dollars will be slightly up to 2021. Given an atypically wide range
of outcomes, the company is not providing EPS guidance at this
point. The company expects a share count of approximately 28.6
million for Q2. The company is taking aggressive actions to improve
gross margin rate in the back half of the year, and expects to
achieve significant sequential improvement in Q3, with a Q4 that is
approximately in-line with the prior year quarter. In addition, the
company will continue to take actions to reduce expenses.
Conference Call/Webcast
The company will host a conference call today at 8:00 a.m. ET to discuss the financial results for
the first quarter of fiscal 2022. A webcast of the conference call
is available through the Investor Relations section of the
company's website http://www.biglots.com. An archive of the call
will be available through the Investor Relations section of the
company's website http://www.biglots.com/ after 12:00 p.m. ET today and will remain available
through midnight ET on Friday, June 10,
2022. A replay of this call will also be available beginning
today at 12:00 p.m. ET through
June 10 by dialing 877.660.6853 (Toll
Free) or 201.612.7415 (Toll) and entering Replay Conference ID
13729931.
About Big Lots, Inc.
Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is
a leading home discount retailer and a Fortune 500 company,
operating 1,438 stores in 47 states, as well as a best-in-class
ecommerce platform with expanded capabilities via BOPIS, curbside
pickup, Instacart and same day delivery across thousands of items.
The company's product assortment is focused on home essentials:
Furniture, Seasonal, Soft Home, Food, Consumables and Hard Home.
Ranked one of the fastest-growing eCommerce businesses by Digital
Commerce 360 and the recipient of Home Textiles Today's 2021 Retail
Titan Award, Big Lots' mission is to help people Live BIG and Save
Lots. The company strives to be the BIG difference for a better
life by delivering exceptional value to customers through the
ultimate treasure hunt shopping experience, building a "best places
to grow" culture, rewarding shareholders with consistent growth and
top-tier returns and doing good in local communities. For more
information about the company, visit biglots.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and such statements
are intended to qualify for the protection of the safe harbor
provided by the Act. The words "anticipate," "estimate,"
"approximate," "expect," "objective," "goal," "project," "intend,"
"plan," "believe," "will," "should," "may," "target," "forecast,"
"guidance," "outlook" and similar expressions generally identify
forward-looking statements. Similarly, descriptions of objectives,
strategies, plans, goals or targets are also forward-looking
statements. Forward-looking statements relate to the expectations
of management as to future occurrences and trends, including
statements expressing optimism or pessimism about future operating
results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance and are applicable only as of the dates of such
statements. Although the company believes the expectations
expressed in forward-looking statements are based on reasonable
assumptions within the bounds of knowledge, forward-looking
statements, by their nature, involve risks, uncertainties and other
factors, any one or a combination of which could materially affect
business, financial condition, results of operations or
liquidity.
Forward-looking statements that the company makes herein and in
other reports and releases are not guarantees of future performance
and actual results may differ materially from those discussed in
such forward-looking statements as a result of various factors,
including, but not limited to, developments related to the COVID-19
coronavirus pandemic, current economic and credit conditions, the
cost of goods, the inability to successfully execute strategic
initiatives, competitive pressures, economic pressures on customers
and the company, the availability of brand name closeout
merchandise, trade restrictions, freight costs, the risks discussed
in the Risk Factors section of the company's most recent Annual
Report on Form 10-K, and other factors discussed from time to time
in other filings with the SEC, including Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. This release should be read
in conjunction with such filings, and you should consider all of
these risks, uncertainties and other factors carefully in
evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. The company
undertakes no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised, however, to consult any further
disclosures the company makes on related subjects in public
announcements and SEC filings.
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
APRIL
30
|
|
MAY 1
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$61,707
|
|
$613,329
|
|
|
|
Inventories
|
|
1,338,737
|
|
901,482
|
|
|
|
Other current
assets
|
|
125,362
|
|
114,001
|
|
|
|
Total
current assets
|
|
1,525,806
|
|
1,628,812
|
|
|
|
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
1,729,053
|
|
1,631,817
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
|
749,416
|
|
723,158
|
|
|
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
10,199
|
|
17,741
|
|
|
Other
assets
|
|
37,283
|
|
36,008
|
|
|
|
|
|
$4,051,757
|
|
$4,037,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$488,524
|
|
$380,942
|
|
|
|
Current operating
lease liabilities
|
|
233,683
|
|
219,367
|
|
|
|
Property, payroll
and other taxes
|
|
95,920
|
|
112,532
|
|
|
|
Accrued operating
expenses
|
|
121,977
|
|
158,136
|
|
|
|
Insurance
reserves
|
|
36,227
|
|
34,803
|
|
|
|
Accrued salaries and
wages
|
|
24,745
|
|
73,799
|
|
|
|
Income taxes
payable
|
|
1,325
|
|
70,340
|
|
|
|
Total
current liabilities
|
|
1,002,401
|
|
1,049,919
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
270,800
|
|
32,063
|
|
|
|
|
|
|
|
|
|
|
Noncurrent operating
lease liabilities
|
|
1,577,932
|
|
1,466,090
|
|
|
Deferred income
taxes
|
|
22,854
|
|
3,805
|
|
|
Insurance
reserves
|
|
59,847
|
|
59,379
|
|
|
Unrecognized tax
benefits
|
|
10,623
|
|
10,601
|
|
|
Other
liabilities
|
|
126,972
|
|
147,177
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
980,328
|
|
1,268,502
|
|
|
|
|
|
$4,051,757
|
|
$4,037,536
|
|
|
|
|
|
|
|
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
APRIL 30,
2022
|
|
MAY 1,
2021
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$1,374,714
|
100.0
|
|
$1,625,552
|
100.0
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
504,594
|
36.7
|
|
653,947
|
40.2
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
|
480,779
|
35.0
|
|
497,418
|
30.6
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
37,356
|
2.7
|
|
33,977
|
2.1
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
|
(13,541)
|
(1.0)
|
|
122,552
|
7.5
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(2,750)
|
(0.2)
|
|
(2,568)
|
(0.2)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
1,040
|
0.1
|
|
960
|
0.1
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(15,251)
|
(1.1)
|
|
120,944
|
7.4
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
(4,169)
|
(0.3)
|
|
26,381
|
1.6
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
($11,082)
|
(0.8)
|
|
$94,563
|
5.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
($0.39)
|
|
|
$2.68
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
($0.39)
|
|
|
$2.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,621
|
|
|
35,349
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of
share-based awards
|
|
-
|
|
|
693
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
28,621
|
|
|
36,042
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
|
$0.30
|
|
|
$0.30
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
|
|
APRIL 30,
2022
|
|
MAY 1,
2021
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash
(used in) provided by operating activities
|
|
($196,233)
|
|
$204,293
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used
in investing activities
|
|
(41,241)
|
|
(32,170)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities
|
|
245,459
|
|
(118,350)
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and
cash equivalents
|
|
7,985
|
|
53,773
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Beginning of
period
|
|
53,722
|
|
559,556
|
|
|
|
End of
period
|
|
$61,707
|
|
$613,329
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/big-lots-reports-q1-results-301556383.html
SOURCE Big Lots, Inc.