All in all, it’s certainly not a horrible time to be a brick-and-mortar retailer in the United States. That’s because the labor market remains strong, while consumers appear to be ready to spend more of their money on goods, interest rates are falling and the wages of retail employees are no longer zooming higher. However, we are still in the e-commerce era, when e-commerce is taking market share from brick-and-mortar names. Therefore, after Bed, Bath and Beyond and Rite Aid (OTC:RADCQ) went bankrupt last y ...

Financial Performance - Net loss for the thirty-nine weeks ended October 28, 2023, was $451.2 million, compared to a net loss of $198.2 million for the same period in 2022[12] - Net sales for the thirty-nine weeks ended October 28, 2023, were $3.29 billion, a decrease from $3.93 billion in the same period in 2022[27] - Gross margin for the thirty-nine weeks ended October 28, 2023, was $1.14 billion, down from $1.35 billion in the same period in 2022[27] - Net sales for Q3 2023 were $1.03 billion, down from $1.20 billion in Q3 2022, with significant declines in the Furniture and Seasonal categories[131] - Net sales decreased by $177.6 million, or 14.7%, in the third quarter of 2023 compared to the third quarter of 2022[141] - Net sales decreased by $635.6 million, or 16.2%, year-to-date in 2023 compared to 2022, driven by a 15.5% decrease in comparable sales[177] - Net sales decreased by $177.6 million (14.7%) to $1,026.7 million in Q3 2023 compared to $1,204.3 million in Q3 2022, driven by a 13.2% decrease in comparable sales and a 1.5% decrease in non-comparable sales[170] - Comparable sales decreased by $150.0 million (13.2%) in Q3 2023, primarily due to a net decrease of 29 stores since Q3 2022[170] - Gross margin improved to 36.4% in Q3 2023 from 34.0% in Q3 2022, reflecting better cost management and operational efficiency[115] - Gross margin rate increased by 240 basis points to 36.4% of net sales, despite a $35.6 million decrease in gross margin dollars[141] - Earnings per share (diluted) for the thirty-nine weeks ended October 28, 2023, were $(15.49), compared to $(6.88) in the same period in 2022[27] - Comprehensive income for the 13 weeks ended October 28, 2023, was $29,192[31] - High inflation and post-COVID consumer spending shifts negatively impacted discretionary spending, particularly for high-ticket products, with expectations of continued impact in Q4 2023[190] Debt and Credit Facilities - The company's borrowing base under the 2022 Credit Agreement was $870.5 million as of October 28, 2023, with $533.0 million in borrowings outstanding and $38.9 million committed to letters of credit, leaving $298.6 million available[166] - The company's long-term debt increased to $533.0 million as of October 28, 2023, compared to $301.4 million in the previous period[7] - The 2022 Credit Agreement provides an aggregate committed amount of up to $900 million, with $211.5 million available as of October 28, 2023[47] - As of October 28, 2023, the company had a Borrowing Base of $870.5 million under the 2022 Credit Agreement, with $533.0 million in borrowings outstanding and $38.9 million committed to letters of credit, leaving $298.6 million available[63] - The company completed a five-year asset-based revolving credit facility of up to $900 million, expiring on September 21, 2027[165] - The company issued $16.2 million in 2023 Term Notes, secured by unearned prepaid insurance premiums, with annual interest rates ranging from 7.1% to 8.5%[65] - Interest expense increased to $13.6 million in Q3 2023 from $6.3 million in Q3 2022, primarily due to higher total average borrowings of $605.8 million compared to $479.8 million in Q3 2022[149] - Interest expense increased to $33.9 million year-to-date in 2023, up from $12.9 million in 2022, due to higher borrowings and interest rates[187] - Cash paid for interest in the third quarter of 2023 was $32,339[42] - Gross proceeds from long-term debt in the third quarter of 2023 were $1,367,000[42] Cash Flow and Liquidity - Cash used in operating activities increased by $120.1 million to $399.1 million in the year-to-date 2023 compared to $279.0 million in the year-to-date 2022[198] - Net cash used in operating activities for the thirty-nine weeks ended October 28, 2023, was $399.1 million, compared to $279.0 million in the same period in 2022[12] - Cash and cash equivalents at the end of the period on October 28, 2023, were $46.6 million, compared to $44.7 million at the beginning of the period[12] - Cash provided by investing activities increased by $419.2 million to $294.3 million in year-to-date 2023, driven by real estate sale proceeds and decreased capital expenditures[221] - The company paid $9.8 million in dividends in the year-to-date 2023, a decrease from $28.3 million in the year-to-date 2022 due to the suspension of quarterly cash dividends in the second quarter of 2023[219] - Dividends declared for the 39 weeks ended October 28, 2023, totaled $7,572[31] - The company had $159.4 million available for future share repurchases under the 2021 Repurchase Authorization as of October 28, 2023[70] - The 2021 Repurchase Authorization had $159.4 million remaining at October 28, 2023, with no repurchases made in Q3 2023[203] Real Estate Transactions - Gain on sale of real estate increased by $210.3 million to $211.9 million in the year-to-date 2023, primarily due to the completion of sale and leaseback transactions for 23 store locations and AVDC[186] - The company completed the sale of two owned store locations in 2023, resulting in a gain of $7.1 million[18] - The company completed sale and leaseback transactions for its Apple Valley, CA distribution center and 23 owned store locations with an aggregate net book value of $123.1 million[40] - The aggregate sale price for the AVDC and 23 store sale and leaseback transactions was $305.7 million, with aggregate net proceeds of $332.1 million[106] - Aggregate initial annual cash payments for AVDC and the Sale and leaseback Stores are approximately $24 million, escalating 2% annually[107] - The sale and leaseback transaction in Q3 2023 generated a gain of $204.7 million and approximately $201 million in net cash proceeds[139][148] - The 2023 Synthetic Lease related to AVDC was terminated and paid off for approximately $101 million on August 25, 2023[217] Asset Impairment and Depreciation - The company recorded aggregate asset impairment charges of $54.0 million related to 171 store locations in the third quarter of 2023[15] - The company recorded aggregate asset impairment charges of $136.9 million related to 332 store locations in year-to-date 2023[39] - Depreciation expense as a percentage of sales increased by 10 basis points compared to the third quarter of 2022[175] - Depreciation expense decreased by $4.2 million to $33.1 million in Q3 2023, compared to $37.3 million in Q3 2022, driven by the absence of FDC-related depreciation and asset impairment charges[147] Operating Expenses - Selling and administrative expenses increased by $22.7 million to $525.7 million in Q3 2023, driven by higher store asset impairment charges and professional fees[121] - Selling and administrative expenses increased by $110.9 million year-to-date in 2023, driven by store asset impairment charges and lease payments[158] - Selling and administrative expenses increased by $22.7 million to $525.7 million, representing 51.2% of net sales, up 940 basis points[141] - Store payroll costs decreased by $3.2 million in Q3 2023, driven by a lower store count and reduced headcount compared to Q3 2022[121] - Distribution and outbound transportation costs were $73.7 million for the third quarter of 2023[41] - Advertising expenses were $17.9 million for Q3 2023, down from $20.9 million in Q3 2022, and $62.2 million year-to-date 2023, down from $64.3 million year-to-date 2022[58] - Share-based compensation expense was $1.1 million in Q3 2023, down from $3.9 million in Q3 2022, and $9.6 million year-to-date 2023, down from $11.4 million year-to-date 2022[72] - The company reversed $2.6 million of previously recorded expense associated with 2022 RSUs due to estimated performance below the minimum required threshold[73] Inventory and Supply Chain - Inventory decreased by 12.5%, or $167.9 million, primarily due to a 7% decrease in units on hand and a 4% decrease in average unit cost[141] - The supply chain finance (SCF) program had a revolving capacity of $30.0 million as of October 28, 2023, down from $55.0 million as of January 28, 2023[131] - Amounts under the SCF program included within accounts payable were $4.7 million as of October 28, 2023, down from $35.4 million as of January 28, 2023[105] Store Operations - The company operated 1,428 stores in 48 states and an e-commerce platform as of October 28, 2023[14] - Stores open at the end of the period were 1,428, up from 1,425 at the beginning of the fiscal year, with 12 stores opened and 9 closed during the year-to-date 2023[113] - The Furniture category sales decreased to $276.3 million in Q3 2023 from $335.2 million in Q3 2022, impacted by reduced demand for large-ticket items[131] - Seasonal category sales dropped to $115.5 million in Q3 2023 from $137.0 million in Q3 2022, due to lower sales in lawn & garden and summer departments[119] - Food and Consumables categories experienced decreases in comps and net sales in Q3 2023 but performed better than home products categories, which are more sensitive to discretionary spending[172] - Home products categories (Furniture, Seasonal, Soft Home, Hard Home) were most impacted by decreased comps and net sales in year-to-date 2023, particularly due to a shortage of Broyhill® branded products[179] - In-stock levels of Broyhill® branded products returned to normal in Q3 2023, leading to improved Furniture sales trends compared to the first half of the year[179] Share-Based Compensation and Equity - The company awarded SVCA PSUs to certain members of management, with vesting based on share price performance goals over a three-year contractual term[80] - Outstanding TSR PSUs and SVCA PSUs at October 28, 2023, totaled 961,680 units with a weighted average grant-date value per share of $8.24[82] - Outstanding non-vested RSUs at October 28, 2023 were 1,859,228 shares with a weighted average grant date fair value of $18.19 per share[89] - The 2023 PSU awards were issued with three distinct annual financial performance objectives, with the second and third tranches to be established at the beginning of fiscal years 2024 and 2025 respectively[91] - Total unearned compensation expense related to all share-based awards outstanding at October 28, 2023 was approximately $24.8 million, expected to be recognized through October 2026[99] Tax and Valuation Allowances - The company recorded a valuation allowance of $145.8 million year-to-date in 2023 for deferred tax assets due to uncertainty in realizing loss carryforwards[127] - The estimated net decrease in unrecognized tax benefits for the next 12 months is approximately $2.0 million[83] Other Financial Metrics - The company's total liabilities and shareholders' equity decreased to $3,625,489 as of October 28, 2023, from $3,690,931 in the previous period[7] - The company's retained earnings decreased to $2,781,454 as of October 28, 2023, from $3,240,193 in the previous period[7] - The company's total current liabilities decreased to $912,176 as of October 28, 2023, from $919,854 in the previous period[7] - The company's noncurrent operating lease liabilities increased to $1,674,314 as of October 28, 2023, from $1,514,009 in the previous period[7] - The weighted average discount rate for the leases was 10.6%, with aggregate operating lease liabilities of $224.2 million and right-of-use assets of $260.6 million recorded at commencement[134] - Other income (expense) was $0.0 million in year-to-date 2023, compared to $1.4 million in year-to-date 2022, due to the absence of diesel fuel derivatives[188] Capital Expenditures - Capital expenditures for the thirty-nine weeks ended October 28, 2023, were $45.0 million, a decrease from $127.4 million in the same period in 2022[12] Lease and Financing Agreements - The company entered into a Participation Agreement on March 15, 2023, with Participants funding $100 million to finance the purchase of the Apple Valley, CA distribution center[67] - The company recognized $13.4 million of FDC closing costs and $53.6 million of costs related to the exit from its Prior Synthetic Lease in year-to-date 2023[41] - The company paid a termination fee of approximately $53.4 million to terminate the Prior Synthetic Lease, using borrowings under the 2022 Credit Agreement[51] - The company adopted ASU 2022-04 in fiscal year 2023, requiring enhanced disclosures about supplier finance programs[43]

Big Lots, Inc. (NYSE:BIG) Q3 2023 Earnings Call Transcript November 30, 2023 8:00 AM ET Company Participants Alvin Concepcion - Vice President, Investor Relations Bruce Thorn - President and Chief Executive Officer Jonathan Ramsden - Executive VP, CFO, and Chief Administrative Officer Conference Call Participants Joe Feldman - Telsey Advisory Group Brad Thomas - KeyBanc Capital Markets Kate McShane - Goldman Sachs Peter Keith - Piper Sandler Alvin Concepcion Good morning. This is Alvin Concepcion, Vice Pres ...

Our fiscal year ends on the Saturday nearest to January 31, which results in fiscal years consisting of 52 or 53 weeks. Unless otherwise stated, references to years in this report relate to fiscal years rather than calendar years. Fiscal year 2023 ("2023") is comprised of the 53 weeks that began on January 29, 2023 and will end on February 3, 2024. Fiscal year 2022 ("2022") was comprised of the 52 weeks that began on January 30, 2022 and ended on January 28, 2023. The fiscal quarters ended July 29, 2023 ("s ...

Big Lots, Inc. (NYSE:BIG) Q2 2023 Earnings Conference Call August 29, 2023 8:00 AM ET Company Participants Alvin Concepcion - Vice President, Investor Relations Bruce Thorn - President and Chief Executive Officer Jonathan Ramsden - Executive Vice President, Chief Financial officer and Chief Administrative Officer Conference Call Participants Jason Haas - Bank of America Brad Thomas - KeyBanc Capital Markets Krisztina Katai - Deutsche Bank Daniel Silverstein - Credit Suisse Alvin Concepcion Good morning. Thi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from __________ to __________ Securities registered pursuant to Section 12(b) of the Act: If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ TABLE OF CONTENTS Table of Contents ☑ QUARTERLY REPORT PURSUANT TO SECT ...

Financial Data and Key Metrics Changes - Q1 net sales were $1.12 billion, an 18.3% decrease compared to $1.37 billion a year ago, driven by a comparable sales decrease of 18.2% [56][30] - Adjusted net loss for Q1 was $98.7 million, with an adjusted diluted loss per share of $3.40 [58] - Gross margin rate for Q1 was 34.9%, down 180 basis points from the previous year, primarily due to higher levels of late quarter promotions [58][31] - Total ending inventory cost was down 18.8% to $1.09 billion [42] Business Line Data and Key Metrics Changes - Seasonal comps declined 25% in Q1 due to unfavorable weather and consumer pullback on higher ticket outdoor furniture [24] - Furniture sales, particularly Broyhill upholstery, were adversely impacted by product shortages related to the closure of United Furniture Industries [30] - Food and consumables held up relatively well despite traffic challenges [2] Market Data and Key Metrics Changes - The lower-income consumer has been significantly affected by inflation, lower tax refunds, and higher interest rates, impacting overall consumer confidence [11] - The company expects continued adverse impact to comps from product shortages in furniture of around 100 basis points in Q2 [45] Company Strategy and Development Direction - The company is focusing on five key actions to drive profitable growth, including increasing the penetration of bargain items to one-third of the assortment [4][28] - Plans to enhance the assortment by procuring from over-inventoried mass retailers and distressed vendors [16] - The company aims to improve store relevance, particularly in rural and small-town markets, and enhance the omnichannel customer experience [5][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that macroeconomic headwinds will abate, leading to a boost in business [11] - The company is aggressively managing costs and has identified over $100 million in structural SG&A savings for 2023 [12] - Management anticipates a more significant improvement in the back half of the year as merchandising and marketing actions gain traction [44] Other Important Information - The board decided to suspend the dividend to enhance liquidity during challenging times [35] - The company is pursuing asset monetization, including a sale and leaseback transaction expected to generate around $240 million in net proceeds [39] Q&A Session Summary Question: Can you provide details on quarter-to-date trends and business progress as the weather changes? - Management noted that weather improvements are helping seasonal sales, but challenges remain in Q2 due to heavy promotions from the previous year [65] Question: What initiatives are in place for food and consumables? - Management highlighted that flexing assortments in food and consumables has shown high-single-digit improvements in targeted markets [88] Question: How clean is the inventory, and are there areas needing improvement? - Management indicated that while furniture inventory is not where it should be, other areas are performing well, and they are targeting promotions to clear slow-moving inventory [95][111] Question: What is the expected impact of the sale leaseback transaction on liquidity? - The transaction is expected to increase available liquidity to around $500 million, enhancing the company's financial position [117] Question: How does the company plan to attract customers from competitors' bankruptcies? - Management is leveraging marketing campaigns to attract dislocated customers from competitors, expecting to see positive results from these efforts [128]

| --- | --- | |-------|-------| | | | | | | trade restrictions, freight costs, the risks discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, and other factors discussed from time to time in our other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This presentation should be read in conjunction with such filings, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forwardlooking s ...

Store Operations - As of January 28, 2023, the company operates 1,425 stores, with 31% located in California, Texas, Florida, and Ohio, contributing to 33% of 2022 net sales[142] - The company opened 56 new stores in 2022 but closed 62, resulting in a net decrease of 6 stores for the year[170] - The company operates four small-format forward distribution centers, which are set to close by August 2023 due to decreased sales and purchasing volumes[174] Financial Performance - The company experienced an operating loss in each quarter of 2022, primarily due to inflationary pressures, resulting in decreased net sales and increased selling and administrative expenses[148] - In 2022, the company recorded asset impairment charges totaling $68.4 million across the second, third, and fourth quarters[149] - In fiscal year 2022, net sales were 25.1% in Q1, 24.6% in Q2, 22.0% in Q3, and 28.3% in Q4, with an operating loss of (5.2%), (41.7%), (50.0%), and (3.1%) respectively[178] - In fiscal year 2021, net sales were 26.4% in Q1, 23.7% in Q2, 21.7% in Q3, and 28.2% in Q4, with operating profit percentages of 51.1%, 22.5%, (1.7%), and 28.1% respectively[178] - The company had $301.4 million in borrowings under the 2022 Credit Agreement as of January 28, 2023, with a 1% increase in variable interest rates potentially impacting operations by approximately $3.0 million[395] - Cash used in investing activities decreased by $50.7 million to $108.9 million in 2022 compared to $159.7 million in 2021, driven by increased cash proceeds from the sale of property and equipment[411] - The company's insurance reserves decreased from $99.3 million in 2022 to $94.5 million in 2023, with a 10% change in self-insured liabilities potentially affecting expenses by approximately $7.9 million[417] - The company was in compliance with the covenants of the 2022 Credit Agreement as of January 28, 2023[404] Customer Engagement - The BIG Rewards Program had approximately 21 million active members as of January 28, 2023, down from 22 million the previous year, indicating a focus on customer engagement[168] - The company utilizes customer data for personalized marketing, which is crucial for evaluating promotional effectiveness and driving net sales[168] Seasonal Trends - Seasonal fluctuations in sales are significant, with a larger percentage of net sales typically realized in the fourth fiscal quarter[147] Diversity and Inclusion - The company has a commitment to diversity, equity, and inclusion, with a DEI Council established to advance its strategy[153] Corporate Social Responsibility - The company plans to publish its second corporate social responsibility report titled "BIG Cares" in April 2023, addressing environmental, social, and governance policies[186] Employee Benefits and Development - The company provided over $25 million in corporate discounts to associates in 2022, highlighting its competitive compensation and benefits package[182] - The company is committed to talent development through annual goal-setting and performance reviews, along with a robust training catalog[183] - The company has implemented comprehensive safety protocols across its facilities to ensure the health and safety of associates and customers[184]

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 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 (Stat ...