Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 001-08897 BIG LOTS, INC. (Exact name of registrant as specified in its charter) Ohio 06-1119097 (State o ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | FORWARD-LOOKING STATEMENTS Certain statements in this release are forwardlooking 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," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "outl ...

Financial Data and Key Metrics Changes - Q2 net sales were $1.346 billion, a 7.6% decrease from $1.457 billion a year ago, driven by a comparable sales decrease of 9.2% [33] - Adjusted net loss for Q2 was $66 million compared to a net income of $38 million in Q2 of 2021, with adjusted diluted loss per share at $2.28 versus diluted EPS of $1.09 last year [36] - Gross margin rate for Q2 was 32.6%, down approximately 700 basis points from the previous year, impacted by higher markdowns and freight costs [36][40] - Adjusted operating margin for the quarter was negative 6.3%, compared to a profit of 3.7% in 2021 [39] Business Line Data and Key Metrics Changes - Seasonal comps grew strongly, up roughly 30% in Q2 on both a one-year and three-year comp basis [19] - The furniture category faced challenges, with consumers delaying or cutting back on higher ticket purchases [21] - E-commerce business was up 35% in Q2, representing 7% of total business, with same-day delivery growing over 80% [23] Market Data and Key Metrics Changes - Customer reactivations through the loyalty program increased by 16% [17] - The company noted that lower-income customers have been more affected by inflation, impacting discretionary purchases [7] Company Strategy and Development Direction - The company is focused on repositioning its assortment towards better bargains, closeouts, and lower price points while enhancing everyday essentials [5][8] - Plans to increase the proportion of bargains and closeouts to one-third of the business over time [14] - The company is enhancing its supply chain visibility and investing in new tools to improve efficiency [28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment but expressed confidence in the company's ability to navigate it and improve results [9][29] - The company expects Q3 sales to remain uncertain, with one-year comps projected to be down in the low double-digit range [46] - Management is optimistic about Q4, expecting improved gross margins and sales momentum due to cleaner inventory levels [48][49] Other Important Information - The company opened 11 new stores and closed three, ending Q2 with 1,442 stores [41] - A quarterly cash dividend of $0.30 per common share was declared for Q2 [45] - The company is planning to sell approximately 25 underperforming stores and is evaluating sale leaseback proposals for remaining owned stores [43][96] Q&A Session Summary Question: How is the company preparing for the holiday season given current trends? - Management indicated a good holiday plan is in place, with tailored assortments and strong stock of necessities [61][62] Question: What is driving the growth in SG&A for Q3? - The increase is primarily due to transportation expenses and costs related to new forward distribution centers [63] Question: Can you provide insights on current trends and inventory management? - Trends are generally consistent with Q2, with a focus on managing seasonal inventory effectively [66][68] Question: What is the rationale behind the sale leaseback strategy? - The strategy involves selling underperforming stores and considering leaseback proposals for others to strengthen the balance sheet [95][96]

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2022, including operations, balance sheets, equity, and cash flows with detailed notes [Consolidated Statements of Operations and Comprehensive Income](index=4&type=section&id=a)%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) The company reported a net loss of **$11.1 million** in Q1 2022, a significant decline from prior year's net income, driven by decreased sales and an operating loss Consolidated Statements of Operations (Q1 2022 vs Q1 2021) | Metric | Thirteen Weeks Ended April 30, 2022 (in thousands) | Thirteen Weeks Ended May 1, 2021 (in thousands) | | :--- | :--- | :--- | | Net sales | $1,374,714 | $1,625,552 | | Gross margin | $504,594 | $653,947 | | Operating (loss) profit | $(13,541) | $122,552 | | Net (loss) income | $(11,082) | $94,563 | | Diluted (loss) earnings per share | $(0.39) | $2.62 | [Consolidated Balance Sheets](index=5&type=section&id=b)%20Consolidated%20Balance%20Sheets) Total assets increased to **$4.05 billion** as of April 30, 2022, primarily due to higher inventories and long-term debt, while equity slightly decreased Consolidated Balance Sheet Highlights (Unaudited) | Metric (in thousands) | April 30, 2022 | January 29, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $61,707 | $53,722 | | Inventories | $1,338,737 | $1,237,797 | | Total assets | $4,051,757 | $3,927,253 | | **Liabilities & Equity** | | | | Accounts payable | $488,524 | $587,496 | | Long-term debt | $270,800 | $3,500 | | Total shareholders' equity | $980,328 | $1,007,363 | [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=c)%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased to **$980.3 million** by April 30, 2022, primarily due to net loss, dividends, and share repurchases - Total shareholders' equity decreased by **$27.0 million** during Q1 2022[7](index=7&type=chunk) - Key activities impacting equity included a comprehensive loss of **$11.1 million**, **$9.0 million** in dividends declared, and **$10.6 million** in common share purchases[7](index=7&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=d)%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$196.2 million** in Q1 2022, a reversal from prior year, offset by **$245.5 million** from financing activities Consolidated Cash Flow Summary (Q1 2022 vs Q1 2021) | Activity (in thousands) | Thirteen Weeks Ended April 30, 2022 | Thirteen Weeks Ended May 1, 2021 | | :--- | :--- | :--- | | 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 at end of period** | **$61,707** | **$613,329** | [Notes to Consolidated Financial Statements (Unaudited)](index=8&type=section&id=e)%20Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) This section details accounting policies, debt, equity, compensation, income tax, legal contingencies, and net sales breakdown by merchandise category - The company operated **1,434 stores** in 47 states and an e-commerce platform as of April 30, 2022[11](index=11&type=chunk) - The company had **$270.8 million** in outstanding borrowings under its **$600 million** unsecured credit facility as of April 30, 2022[21](index=21&type=chunk)[22](index=22&type=chunk) - A quarterly cash dividend of **$0.30 per common share** was declared and paid in Q1 2022[27](index=27&type=chunk) Net Sales by Merchandise Category (Q1 2022 vs Q1 2021) | Category (in thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Furniture | $390,386 | $481,431 | | Seasonal | $234,171 | $303,918 | | Food | $176,620 | $180,297 | | Soft Home | $166,295 | $223,854 | | Consumables | $155,310 | $162,388 | | Hard Home | $129,284 | $152,198 | | Apparel, Electronics, & Other | $122,648 | $121,466 | | **Total Net sales** | **$1,374,714** | **$1,625,552** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 sales decline, gross margin compression, and operating loss due to macroeconomic factors, withdrawing full-year guidance and outlining Q2 expectations [OVERVIEW](index=16&type=section&id=OVERVIEW) Q1 2022 saw significant declines in net sales (**15.4%**), comparable sales (**17.0%**), gross margin, and diluted EPS, with a shift to operating loss Key Performance Indicators (Q1 2022 vs Q1 2021) | Metric | Change | | :--- | :--- | | Net Sales | Decreased 15.4% | | Comparable Sales | Decreased 17.0% | | Gross Margin Rate | Decreased 350 bps to 36.7% | | Operating (Loss) Profit Rate | Decreased 850 bps to (1.0)% | | Diluted EPS | Decreased to $(0.39) from $2.62 | | Inventory | Increased 48.5% YoY | [RESULTS OF OPERATIONS](index=17&type=section&id=RESULTS%20OF%20OPERATIONS) Net sales decreased **15.4%** to **$1.37 billion** in Q1 2022 due to lower comparable sales and macroeconomic factors, leading to an operating loss - Net sales decreased by **$250.8 million** (**15.4%**), primarily due to a **17.0%** decrease in comparable sales[59](index=59&type=chunk) - The sales decline was caused by the absence of prior-year government stimulus payments and inflationary pressures impacting discretionary spending[60](index=60&type=chunk)[61](index=61&type=chunk) - Gross margin rate decreased by **350 basis points** to **36.7%**, driven by higher markdowns, increased inbound freight costs, and a higher shrink rate[64](index=64&type=chunk) - Selling and administrative expenses decreased by **$16.6 million**, primarily due to lower accrued bonus and share-based compensation, partially offset by a **$15.8 million** increase in distribution and transportation expenses[65](index=65&type=chunk) [Known Trends and 2022 Guidance](index=19&type=section&id=Known%20Trends%20and%202022%20Guidance) The company withdrew full-year 2022 guidance due to inflation and uncertainty, anticipating a Q2 net loss with mid-to-high single-digit comparable sales decrease - The company lacks sufficient visibility to provide full-year 2022 guidance due to the inflationary environment negatively impacting discretionary spending[72](index=72&type=chunk) Q2 2022 Outlook (as of May 27, 2022) | Metric | Expected Performance vs. Q2 2021 | | :--- | :--- | | Comparable Sales | Decrease in the mid-to-high single digits | | Gross Margin Rate | In the low 30s | | Selling & Admin Expenses | Slightly up | [Capital Resources and Liquidity](index=20&type=section&id=Capital%20Resources%20and%20Liquidity) Liquidity is primarily from operations and a **$600 million** credit facility, with **$270.8 million** drawn, and **$159.4 million** remaining for share repurchases - The company has a **$600 million** unsecured credit facility, with **$270.8 million** borrowed and **$324.2 million** available as of April 30, 2022[75](index=75&type=chunk)[76](index=76&type=chunk) - As of April 30, 2022, **$159.4 million** remained available for future repurchases under the **$250 million** authorization, with no shares repurchased in Q1 2022[78](index=78&type=chunk) - Cash used in operating activities was **$196.2 million** in Q1 2022, a **$400.5 million** decrease from Q1 2021, driven by lower earnings and increased inventory[82](index=82&type=chunk) - Cash provided by financing activities was **$245.5 million**, a reversal from **$118.4 million** used in Q1 2021, due to net proceeds from long-term debt and decreased share repurchases[84](index=84&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risk from variable interest rates and diesel fuel prices, with a **1%** rate increase potentially adding **$2.7 million** to annual interest expense - The company had **$270.8 million** in variable-rate borrowings; a **1%** interest rate increase would result in approximately **$2.7 million** in additional annual interest expense[89](index=89&type=chunk) - The company is exposed to market risk from diesel fuel price changes and had outstanding derivative collars covering **0.9 million gallons** at quarter-end[90](index=90&type=chunk) [Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of April 30, 2022, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of the report period end[92](index=92&type=chunk) - No material changes occurred in internal control over financial reporting during the most recent fiscal quarter[93](index=93&type=chunk) [Part II. Other Information](index=22&type=section&id=Part%20II.%20Other%20Information) [Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal actions, but their resolution is not expected to materially affect financial condition or results - The company does not expect ordinary course legal actions to materially affect its financials[43](index=43&type=chunk)[94](index=94&type=chunk) [Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K were reported - No material changes to the risk factors disclosed in the 2021 Form 10-K were reported during Q1 2022[95](index=95&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company acquired **280,000** common shares for tax withholdings on vested employee awards, with no repurchases under the **$159.4 million** remaining authorization - A total of **280,000** common shares were acquired to satisfy tax withholdings on vested employee share awards[98](index=98&type=chunk) - No shares were repurchased under the 2021 Repurchase Authorization during Q1, leaving **$159.4 million** available as of April 30, 2022[98](index=98&type=chunk) [Defaults Upon Senior Securities, Mine Safety Disclosures, and Other Information](index=23&type=section&id=Item%203,%204,%205) The company reported no defaults upon senior securities, no mine safety disclosures, and no other information under Item 5 - The company reported "None" for Defaults Upon Senior Securities, Mine Safety Disclosures, and Other Information[99](index=99&type=chunk) [Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and various XBRL documents[102](index=102&type=chunk)

| --- | --- | --- | |-------|-------|-------| | | | | | | | | | | | | 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," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "out ...

Big Lots, Inc. (NYSE:BIG) Q1 2022 Earnings Conference Call May 27, 2022 8:00 AM ET Company Participants Bruce Thorn - President & Chief Executive Officer Jonathan Ramsden - Executive Vice President & Chief Financial Officer Conference Call Participants Spencer Hanus - Wolfe Research Joe Feldman - Telsey Advisory Group Peter Keith - Piper Sandler Kate McShane - Goldman Sachs Jason Haas - Bank of America Karen Short - Barclays Operator Ladies and gentlemen, good morning, and welcome to the Big Lots First Qua ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 29, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 001-08897 BIG LOTS, INC. (Exact name of registrant as specified in its charter) Ohio 06-1119097 (State or oth ...

| --- | --- | --- | |-------|-------|-------| | | | | | | | | 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," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "outlook" an ...

Big Lots Inc. (NYSE:BIG) Q4 2021 Earnings Conference Call March 3, 2022 8:00 AM ET Company Participants Jonathan Ramsden - Executive Vice President, Chief Financial Officer Jack Pestello - Executive Vice President, Chief Merchandising Officer Conference Call Participants Spencer Hanus - Wolfe Research Joe Feldman - Telsey Advisory Group Andrew - Keybanc Zane Brock - Barclays Jason Haas - Bank of America Operator Ladies and gentlemen, good morning and welcome to Big Lots fourth quarter conference call. Curre ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number 001-08897 BIG LOTS, INC. (Exact name of registrant as specified in its charter) Ohio 06-1119097 (Stat ...