Comparable sales and gross margins in line
with guidance; expenses, excluding impairments, better than
expected
Q3 GAAP EPS loss of $3.56; adjusted EPS loss of $2.99
Inventory reduction efforts on track
For the Q3 Results Presentation, Please
Visit:
https://www.biglots.com/corporate/investors
COLUMBUS, Ohio, Dec. 1, 2022
/PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today reported a net
loss of $103.0 million, or
$3.56 per share, for the third
quarter of fiscal 2022 ended October 29,
2022. This result includes an after-tax charge of
$16.3 million, or $0.56 per share, associated with store asset
impairment charges. Excluding this charge, the adjusted net loss
was $86.7 million, or $2.99 per share (see non-GAAP table included
later in this release). The net loss for the third quarter of
fiscal 2021 was $4.3 million, or
$0.14 per diluted share.
Net sales for the third quarter of fiscal 2022 totaled
$1.204 billion, a 9.8% decrease
compared to $1.336 billion for the
same period last year. The decline to last year was driven by a
comparable sales decrease of 11.7%. Net new stores and relocations
contributed approximately 190 basis points of sales growth compared
to the third quarter of 2021.
Commenting on today's results announcement, Bruce Thorn, President and CEO of Big Lots
stated, "The third quarter marks another quarter in which we met
the challenges of a tough environment head on and did what we said
we would do. Our sales and gross margin were in line with guidance
and, importantly, year-over-year inventories continued to come down
materially. We saw favorability in SG&A, as we tightly managed
costs, and have strengthened our balance sheet and liquidity
position. I'd like to thank our team for their hard work through
this difficult retail environment."
"Going forward, we will build on the significant progress we
have achieved in strengthening our business model. These efforts
will enable us to better adapt to continuously evolving customer
needs, build upon our core competencies, and deliver incredible
value."
"Although we are operating in a challenging macroeconomic
environment, we remain enthusiastic about our tremendous
opportunity to provide even more value for our customers. We will
continue to transform our business by offering customers amazing
deals and more exciting assortments, which are easier to find and
more convenient to shop. We will find more ways to be efficient
with a continued focus on growing margin, reducing expenses, and
making highly disciplined investment decisions."
A summary of adjustments to loss per diluted share is included
in the table below.
|
|
|
|
Q3 2022
|
|
Earnings (loss) per
diluted share - as reported
|
($3.56)
|
|
Adjustment to exclude
store asset impairment charges(1)
|
$0.56
|
|
Earnings (loss) per
diluted share – adjusted basis
|
($2.99)
|
|
|
|
|
(1) Non-GAAP
detailed reconciliation provided in statement below
|
|
Inventory and Cash Management
Inventory ended the third quarter of fiscal 2022 at $1,345 million compared to $1,277 million for the same period last year,
with the 5.3% increase driven by higher average unit costs.
The company ended the third quarter of fiscal 2022 with
$62.1 million of Cash and Cash
Equivalents and $459.9 million of
Long-term Debt, compared to $70.6
million of Cash and Cash Equivalents and no Long-term Debt
as of the end of the third quarter of fiscal 2021. On September 21, 2022 the company successfully
completed the refinancing and replacement of its existing
$600 million senior unsecured credit
facility with a new $900 million
five-year revolving asset-based loan (ABL) facility. The ABL is
secured by the company's working capital, with the borrowing
base comprised of eligible credit card receivables and the
company's eligible inventory, less applicable reserves, that
fluctuates each month. The new facility strengthens the company's
liquidity position and increases its financial flexibility. The new
facility strengthens the company's liquidity position and increases
its financial flexibility.
Dividend and Share Repurchases
As announced in a prior release, on December
1, 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 December
28, 2022, to shareholders of record as of the close of
business on December 14, 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 fourth quarter, the company expects comps to be down in the
low-double-digit range. Net new stores will add about 170 basis
points of growth versus 2021. The company expects the fourth
quarter gross margin rate to improve sequentially versus Q3 but
remain in the mid-30s range. This includes the impact of additional
markdowns related to accelerated store closures and continued
efforts to clean up slow-moving inventory. 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 29.0
million for Q4.
Conference Call/Webcast
The company will host a conference call today at 8:00 a.m. ET to discuss the financial results for
the third 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 Thursday, December
15, 2022. A replay of this call will also be available
beginning today at 12:00 p.m. ET
through December 15 by dialing
877.660.6853 (Toll Free) or 201.612.7415 (Toll) and entering Replay
Conference ID 13734153.
About Big Lots
Headquartered in Columbus,
Ohio, Big Lots, Inc. (NYSE: BIG) is one of America's
largest home discount retailers, operating more than 1,450 stores
in 48 states, as well as a best-in-class ecommerce platform with
expanded fulfillment and delivery capabilities. The Company's
mission is to help customers "Live Big and Save Lots" by offering
unique treasures and exceptional bargains on everything for their
home, including furniture, seasonal decor, kitchenware, pet
supplies, food items, laundry and cleaning essentials and more. Big
Lots is the recipient of Home Textiles Today's 2021 Retail Titan
Award. For more information about the company or to find the store
nearest you, 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
OCTOBER
29
|
|
OCTOBER
30
|
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$62,138
|
|
$70,596
|
|
|
|
|
Inventories
|
|
1,345,280
|
|
1,277,225
|
|
|
|
|
Other current
assets
|
|
122,581
|
|
148,959
|
|
|
|
|
Total
current assets
|
|
1,529,999
|
|
1,496,780
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease
right-of-use assets
|
|
1,693,138
|
|
1,745,291
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment - net
|
|
718,642
|
|
738,673
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income
taxes
|
|
53,962
|
|
16,055
|
|
|
|
Other
assets
|
|
39,671
|
|
35,524
|
|
|
|
|
|
|
$4,035,412
|
|
$4,032,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$481,779
|
|
$605,336
|
|
|
|
|
Current operating
lease liabilities
|
|
245,768
|
|
235,473
|
|
|
|
|
Property, payroll
and other taxes
|
|
101,597
|
|
104,806
|
|
|
|
|
Accrued operating
expenses
|
|
125,518
|
|
123,304
|
|
|
|
|
Insurance
reserves
|
|
39,335
|
|
35,616
|
|
|
|
|
Accrued salaries and
wages
|
|
27,700
|
|
74,648
|
|
|
|
|
Income taxes
payable
|
|
1,225
|
|
508
|
|
|
|
|
Total
current liabilities
|
|
1,022,922
|
|
1,179,691
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
459,900
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent operating
lease liabilities
|
|
1,575,678
|
|
1,579,209
|
|
|
|
Deferred income
taxes
|
|
0
|
|
8,504
|
|
|
|
Insurance
reserves
|
|
60,269
|
|
58,330
|
|
|
|
Unrecognized tax
benefits
|
|
8,170
|
|
10,415
|
|
|
|
Other
liabilities
|
|
126,243
|
|
146,334
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
782,230
|
|
1,049,840
|
|
|
|
|
|
|
$4,035,412
|
|
$4,032,323
|
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
OCTOBER 29,
2022
|
|
OCTOBER 30,
2021
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$1,204,281
|
100.0
|
|
$1,335,656
|
100.0
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
409,460
|
34.0
|
|
519,181
|
38.9
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
|
503,016
|
41.8
|
|
487,378
|
36.5
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
37,255
|
3.1
|
|
35,930
|
2.7
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(130,811)
|
(10.9)
|
|
(4,127)
|
(0.3)
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(6,256)
|
(0.5)
|
|
(2,284)
|
(0.2)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
62
|
0.0
|
|
285
|
0.0
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(137,005)
|
(11.4)
|
|
(6,126)
|
(0.5)
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
|
(33,992)
|
(2.8)
|
|
(1,796)
|
(0.1)
|
|
|
|
|
|
|
|
|
Net
loss
|
|
($103,013)
|
(8.6)
|
|
($4,330)
|
(0.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
($3.56)
|
|
|
($0.14)
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
($3.56)
|
|
|
($0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,943
|
|
|
31,679
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of
share-based awards
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
28,943
|
|
|
31,679
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
|
$0.30
|
|
|
$0.30
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
39 WEEKS
ENDED
|
|
39 WEEKS
ENDED
|
|
|
|
OCTOBER 29,
2022
|
|
OCTOBER 30,
2021
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$3,925,216
|
100.0
|
|
$4,418,582
|
100.0
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
1,352,602
|
34.5
|
|
1,750,925
|
39.6
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expenses
|
|
1,494,239
|
38.1
|
|
1,473,454
|
33.3
|
|
|
|
|
|
|
|
|
|
Depreciation
expense
|
|
111,808
|
2.8
|
|
105,196
|
2.4
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
|
(253,445)
|
(6.5)
|
|
172,275
|
3.9
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(12,910)
|
(0.3)
|
|
(7,148)
|
(0.2)
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
1,359
|
0.0
|
|
1,112
|
0.0
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
|
(264,996)
|
(6.8)
|
|
166,239
|
3.8
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
|
(66,751)
|
(1.7)
|
|
38,299
|
0.9
|
|
|
|
|
|
|
|
|
Net (loss)
income
|
|
($198,245)
|
(5.1)
|
|
$127,940
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
($6.88)
|
|
|
$3.80
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
($6.88)
|
|
|
$3.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
28,828
|
|
|
33,677
|
|
|
|
|
|
|
|
|
|
|
Dilutive effect of
share-based awards
|
|
-
|
|
|
617
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
28,828
|
|
|
34,294
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per common share
|
|
$0.90
|
|
|
$0.90
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS
ENDED
|
|
13 WEEKS
ENDED
|
|
|
|
|
|
OCTOBER 29,
2022
|
|
OCTOBER 30,
2021
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash used
in operating activities
|
|
($143,630)
|
|
($66,452)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used
in investing activities
|
|
(37,979)
|
|
(45,459)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities
|
|
194,603
|
|
(110,815)
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
12,994
|
|
(222,726)
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Beginning of
period
|
|
49,144
|
|
293,322
|
|
|
|
End of
period
|
|
$62,138
|
|
$70,596
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
39 WEEKS
ENDED
|
|
39 WEEKS
ENDED
|
|
|
|
|
|
OCTOBER 29,
2022
|
|
OCTOBER 30,
2021
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash
(used in) provided by operating activities
|
|
($279,039)
|
|
$75,706
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used
in investing activities
|
|
(124,851)
|
|
(122,545)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by (used in) financing activities
|
|
412,306
|
|
(442,121)
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
|
8,416
|
|
(488,960)
|
|
|
|
Cash and cash
equivalents:
|
|
|
|
|
|
|
|
Beginning of
period
|
|
53,722
|
|
559,556
|
|
|
|
End of
period
|
|
$62,138
|
|
$70,596
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(In thousands, except per share
data)
(Unaudited)
The following tables reconcile: selling and administrative
expenses, selling and administrative expense rate, operating loss,
operating loss rate, income tax benefit, effective income tax rate,
net loss, and diluted earnings (loss) per share for the third
quarter of 2022 and the year-to-date 2022 (GAAP financial measures)
to adjusted selling and administrative expenses, adjusted selling
and administrative expense rate, adjusted operating loss, adjusted
operating loss rate, adjusted income tax benefit, adjusted
effective income tax rate, adjusted net loss, and adjusted diluted
earnings (loss) per share (non-GAAP financial measures).
Third Quarter
of 2022 - Thirteen weeks ended October 29,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustment
to
exclude store
asset impairment
charges
|
|
As
Adjusted
(non-GAAP)
|
Selling and
administrative expenses
|
$
503,016
|
|
$
(21,723)
|
|
$
481,293
|
Selling and
administrative expense rate
|
41.8 %
|
|
(1.8 %)
|
|
40.0 %
|
Operating
loss
|
|
(130,811)
|
|
21,723
|
|
(109,088)
|
Operating loss
rate
|
|
(10.9 %)
|
|
1.8 %
|
|
(9.1 %)
|
Income tax
benefit
|
|
(33,992)
|
|
5,375
|
|
(28,617)
|
Effective
income tax rate
|
|
24.8 %
|
|
0.0 %
|
|
24.8 %
|
Net
loss
|
|
|
(103,013)
|
|
16,348
|
|
(86,665)
|
Diluted
earnings (loss) per share
|
$
(3.56)
|
|
$
0.56
|
|
$
(2.99)
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating loss,
adjusted operating loss rate, adjusted income tax benefit, adjusted
effective income tax rate, adjusted net loss, and adjusted diluted
earnings (loss) per share are "non-GAAP financial measures" as that
term is defined by Rule 101 of Regulation G (17 CFR Part 244) and
Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP
financial measures exclude from the most directly comparable
financial measures calculated and presented in accordance with
accounting principles generally accepted in the United States of America ("GAAP") store
asset impairment charges of $21,723
($16,348, net of tax).
Year-to-Date
2022 - Thirty-nine weeks ended October 29,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustment
to
exclude store
asset impairment
charges
|
|
As
Adjusted
(non-GAAP)
|
Selling and
administrative expenses
|
$
1,494,239
|
|
$
(45,828)
|
|
$
1,448,411
|
Selling and
administrative expense rate
|
38.1 %
|
|
(1.2 %)
|
|
36.9 %
|
Operating
loss
|
|
(253,445)
|
|
45,828
|
|
(207,617)
|
Operating loss
rate
|
|
(6.5 %)
|
|
1.2 %
|
|
(5.3 %)
|
Income tax
benefit
|
|
(66,751)
|
|
11,331
|
|
(55,420)
|
Effective
income tax rate
|
|
25.2 %
|
|
0.1 %
|
|
25.3 %
|
Net
loss
|
|
|
(198,245)
|
|
34,497
|
|
(163,748)
|
Diluted
earnings (loss) per share
|
$
(6.88)
|
|
$
1.20
|
|
$
(5.68)
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating loss,
adjusted operating loss rate, adjusted income tax benefit, adjusted
effective income tax rate, adjusted net loss, and adjusted diluted
earnings (loss) per share are "non-GAAP financial measures" as that
term is defined by Rule 101 of Regulation G (17 CFR Part 244) and
Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP
financial measures exclude from the most directly comparable
financial measures calculated and presented in accordance with GAAP
store asset impairment charges of $45,828 ($34,497,
net of tax).
Our management believes that the disclosure of these non-GAAP
financial measures provides useful information to investors because
the non-GAAP financial measures present an alternative and more
relevant method for measuring our operating performance, excluding
special items included in the most directly comparable GAAP
financial measures, that management believes is more indicative of
our on-going operating results and financial condition. Our
management uses these non-GAAP financial measures, along with the
most directly comparable GAAP financial measures, in evaluating our
operating performance.
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SOURCE Big Lots, Inc.