Financial Performance - Net sales decreased by $92.8 million, or 8.1%, in Q2 2024 compared to Q2 2023[121] - Comparable sales for stores open at least fifteen months, plus e-commerce net sales, decreased by $57.5 million, or 5.3%[121] - Year-to-date net sales decreased by $207.3 million, or 9.2%, to $2,055.7 million in 2024, with a 7.6% decline in comparable store sales contributing to this decrease[138] - Net sales decreased by $92.8 million, or 8.1%, to $1,046.6 million in Q2 2024 compared to Q2 2023, primarily due to a 5.3% decrease in comparable store sales[127] Gross Margin and Expenses - Gross margin rate increased by 190 basis points to 34.9% of net sales, despite a decrease in gross margin dollars by $10.7 million[121] - Gross margin dollars decreased by $10.7 million, or 2.8%, to $365.2 million in Q2 2024, while gross margin as a percentage of net sales increased by 190 basis points to 34.9%[131] - Selling and administrative expenses increased by $93.6 million to $553.7 million, representing 52.9% of net sales, an increase of 1,250 basis points[121] - Selling and administrative expenses increased by $93.6 million, or 20.3%, to $553.7 million in Q2 2024, with expenses as a percentage of net sales rising to 52.9%[132][133] - Selling and administrative expenses for year-to-date 2024 were $1,086.7 million, a slight increase of $5.8 million from $1,080.9 million in year-to-date 2023, primarily due to store asset impairment charges of $84.5 million[143] - As a percentage of net sales, selling and administrative expenses increased by 510 basis points to 52.9% for year-to-date 2024 compared to 47.8% for year-to-date 2023[144] Debt and Financing - Long-term debt decreased from $493.2 million in Q2 2023 to $0.0 million in Q2 2024 due to the Chapter 11 filing[121] - Total debt increased by $77.8 million from $504.4 million in Q2 2023 to $582.2 million in Q2 2024[121] - The total debt of approximately $556.1 million became due and payable due to the Chapter 11 filing, resulting in all outstanding indebtedness being classified as current debt[153][154] - The company has secured approximately $550 million in debtor-in-possession financing through the DIP ABL Facility, which will be used to refinance existing commitments under the 2022 Credit Agreement[169] - The 2024 Term Loan provides for a committed amount of up to $200 million, with an initial drawdown of $50.0 million[163] - The 2024 Term Loan has an interest rate of 14.6% as of August 3, 2024, with mandatory prepayments required under certain conditions[167] - As of August 3, 2024, the company had $459.3 million in borrowings under the 2022 Credit Agreement and $115.0 million under the 2024 Term Loan, all classified as current due to Chapter 11 filings[184] Operational Changes - The company plans to close up to 315 stores in 2024, including 296 closures announced for Q3 2024[123] - The company expects to manage operations as a "debtor-in-possession" under the Bankruptcy Court's jurisdiction, allowing continued operation but restricting transactions outside the ordinary course of business[152] - The company anticipates sequential improvement in underlying comparable sales trends and gross margin rate, although it is not providing earnings guidance for the second half of 2024[150] Tax and Interest - The effective income tax rate for Q2 2024 was (0.2%), compared to (87.5%) in Q2 2023, due to a full valuation allowance on deferred assets[137] - The effective income tax rate for year-to-date 2024 was (0.1%), a significant change from (13.0%) in year-to-date 2023, due to a full valuation allowance on deferred assets[149] - Interest expense rose to $16.3 million in Q2 2024 from $11.2 million in Q2 2023, driven by higher average borrowings of $721.3 million[136] - Interest expense increased to $28.3 million in year-to-date 2024 from $20.3 million in year-to-date 2023, driven by higher average borrowings of $689.8 million compared to $606.2 million in the prior year[148] Cash Flow - Cash used in operating activities increased by $14.0 million to $164.6 million in year-to-date 2024 compared to $150.6 million in year-to-date 2023[179] - Cash used in investing activities rose by $4.7 million to $25.1 million in year-to-date 2024, driven by decreased proceeds from the sale of property and equipment[180] - Cash provided by financing activities increased by $24.5 million to $196.8 million in year-to-date 2024, attributed to net proceeds from litigation and other financing arrangements[181] - The company paid approximately $0.2 million in dividends in year-to-date 2024, a significant decrease from $9.7 million in year-to-date 2023 due to the suspension of quarterly cash dividends[177] Inventory and Product Performance - Inventory decreased by 14.8%, or $145.9 million, from $983.2 million at the end of Q2 2023 to $837.3 million at the end of Q2 2024[121] - The Furniture category showed a sequential improvement in year-to-date 2024, driven by Broyhill® branded products returning to normal in-stock levels[140] - The Food and Consumables categories performed relatively better than home products, despite experiencing decreased comps and net sales[141] - The company plans to increase Bargain and Extreme Bargain assortments in the candy and snacks departments throughout the remainder of 2024[130] Depreciation and Estimates - Depreciation expense decreased by $13.1 million to $64.8 million in year-to-date 2024, compared to $77.9 million in year-to-date 2023, primarily due to the absence of FDC related depreciation[145] - The estimates and assumptions used in the financial reporting process have a high degree of inherent uncertainty, which could materially affect the financial condition and results of operations if different estimates were applied[183]

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-08897 BIG LOTS, INC. (Exact name of registrant as specified in its charter) Title of each class Trading Symbol(s) Name of each exchange on which registered Common shares BIG New York Stock Exchange Indicate by check mark whether the registrant has submitted electronically every Interactive Data File req ...

Financial Performance - Q1 2024 net sales totaled $1.009 billion, a 10.2% decrease compared to $1.124 billion in Q1 2023, driven by a 9.9% comparable sales decline[1] - Q1 2024 GAAP EPS loss of $6.99; adjusted EPS loss of $4.51, compared to an adjusted EPS loss of $3.40 in Q1 2023[9] - Q1 2024 adjusted operating loss improved to $192.9 million from $261.2 million in Q1 2023[23] - Adjusted operating loss for Q1 2024 was $(120.1) million, compared to the reported operating loss of $(192.9) million, after adjustments for FDC costs, store impairments, and Project Springboard fees[42] - Adjusted net loss for Q1 2024 was $(132.3) million, compared to the reported net loss of $(205.0) million, after adjustments for FDC costs, store impairments, and Project Springboard fees[42] - Adjusted diluted earnings (loss) per share for Q1 2024 was $(4.51), compared to the reported $(6.99), after adjustments for FDC costs, store impairments, and Project Springboard fees[42] Liquidity and Debt - The company ended Q1 2024 with $289 million of liquidity, including availability under a new $200 million term loan facility[9] - Q1 2024 long-term debt increased to $573.8 million from $501.6 million in Q1 2023[13] - The company executed a new $200 million term loan facility in Q1 2024, providing additional financial flexibility[30] Gross Margin and Inventory Management - Q1 2024 gross margin improved to 36.8% from 34.9% in Q1 2023, driven by reduced markdown activity and Project Springboard benefits[23] - The company expects Q2 2024 gross margin rate to improve by at least 300 basis points year-over-year[5] - Q1 2024 inventory decreased to $949.9 million from $1.087 billion in Q1 2023, reflecting improved inventory management[21] - Inventory at the end of Q1 2024 was $949.9 million, a 12.7% decrease compared to $1.088 billion in Q1 2023, driven by lower on-hand units and average unit cost[32] Project Springboard - The company raised its target for cumulative benefits from Project Springboard to $185 million by year-end, up from the previous target of $175 million, and is ahead of schedule in realizing these benefits[30] - Adjusted selling and administrative expenses for Q1 2024 were $460.3 million, a decrease from the reported $533.0 million after excluding FDC contract termination costs ($874k), store asset impairment charges ($68.2 million), and Project Springboard fees ($3.6 million)[42] - Adjusted selling and administrative expense rate for Q1 2024 was 45.6%, down from the reported rate of 52.8%, after adjustments for FDC costs, store impairments, and Project Springboard fees[42] - Adjusted operating loss rate for Q1 2024 was (11.9%), compared to the reported rate of (19.1%), after adjustments for FDC costs, store impairments, and Project Springboard fees[42] Sales and Bargain Penetration - The company expects Q2 2024 comp sales to improve sequentially but still be down in the mid to high-single-digit range[5] - The company aims to achieve 75% bargain penetration and 50% extreme bargain penetration by year-end 2024[2] Share Repurchase - The company has $159 million remaining under its December 2021 $250 million share repurchase authorization and did not execute any share repurchases during Q1 2024[33]

Financial Data and Key Metrics Changes - Q1 net sales were $1.01 billion, a 10.2% decrease compared to $1.12 billion a year ago, driven by a comparable sales decrease of 9.9% [31] - The gross margin rate for the quarter was 36.8%, up 190 basis points year-over-year, primarily due to reduced markdowns and benefits from Project Springboard [11] - Adjusted operating margin for the quarter was negative 11.9%, with interest expense increasing to $12 million from $9.1 million a year ago [12][31] - Total ending inventory cost was down 12.7% year-over-year, driven by lower on-hand units and average unit cost [13] Business Line Data and Key Metrics Changes - Seasonal comps decelerated relative to Q4, particularly in high-ticket discretionary items like patio furniture and gazebos, while core items and seasonal assortments performed positively [5] - The toy category saw nearly a 50% increase in sales in April, driven by the Hearthsong closeout deal [6] - Grocery SKU count increased by 150%, and personal care extreme value SKU count increased sevenfold year-over-year [7] Market Data and Key Metrics Changes - Comp sales trends were down 9.9% in Q1, missing guidance due to volatility in consumer sentiment and weather impacts [10][99] - The company expects sequential comp sales improvement in Q2, projecting a negative mid-to-high single-digit range [14] Company Strategy and Development Direction - The company is focused on five key actions: owning bargains, communicating unmistakable value, increasing store relevance, winning customers for life, and driving productivity [101] - The goal is to achieve 75% bargain penetration and 50% extreme bargain penetration by year-end [81][108] - Project Springboard is expected to deliver $185 million in cumulative savings by year-end, up from a previous target of $175 million [17][83] Management's Comments on Operating Environment and Future Outlook - The management expressed cautious optimism for Q2, noting improvements in sales trends and expectations for gross margin rate improvement [39][61] - The consumer environment remains challenging, particularly for lower-income households, but the company is focused on managing through the cycle [79][99] - Management highlighted the importance of extreme bargains in driving sales and improving consumer perceptions [102][108] Other Important Information - The company ended Q1 with $289 million in net liquidity, an increase from $254 million in Q4 [86] - The company is implementing a simplified store operation strategy to enhance efficiency and customer experience [22][83] Q&A Session Summary Question: Can you quantify category performance between bargains, extreme bargains, and the rest? - Management noted that extreme bargain penetration is deepening across all categories, with positive comps in upholstery furniture driven by extreme bargains [41][42] Question: How do you view supply for the remainder of the year? - The closeout rate for extreme bargains is at 28%, the highest in nearly a decade, with no signs of slowing down [53][75] Question: Can you elaborate on gross margin improvement throughout the year? - Management expects gross margin rate improvement to accelerate from Q1 to Q2, projecting at least 300 basis points of improvement in Q2 [65] Question: Did you witness any changes in core customer purchasing behavior? - The core customer, particularly lower-income households, has been pulling back on large discretionary items, but there are signs of normalization in Q2 [68][72]

Part I [Business](index=4&type=section&id=Item%201.%20Business) Big Lots, Inc. operates as a home discount retailer in the U.S. with 1,392 stores and an e-commerce platform, focusing on value-driven merchandising and facing intense retail competition - As of February 3, 2024, Big Lots operated **1,392 stores** in the U.S. and an e-commerce platform[87](index=87&type=chunk) - The company's merchandising strategy focuses on "Bargains" and "Extreme Bargains" (closeouts) to deliver value[92](index=92&type=chunk)[111](index=111&type=chunk) - In 2023, approximately **21% of merchandise** was purchased directly from overseas vendors, with **13% from China**[112](index=112&type=chunk) - The BIG Rewards Program had approximately **20 million active members** as of February 3, 2024, down from 21 million the previous year[115](index=115&type=chunk) - In 2023, the company ceased operations at its four forward distribution centers (FDCs) due to declining sales volume and to reduce expenses[99](index=99&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, market, competitive, and financial risks, including potential failure of strategic initiatives, supply chain disruptions, intense competition, debt covenant compliance, and human capital challenges - The company's "Project Springboard" initiative aims to improve operating income by over **$200 million**, but failure to achieve these goals could adversely affect performance[178](index=178&type=chunk) - Global sourcing from foreign countries, including **13% of products from China** in 2023, exposes the company to risks like tariffs, shipping costs, and political unrest[164](index=164&type=chunk)[165](index=165&type=chunk) - The company faces intense and growing competition from other retailers in the online marketplace, which could reduce market share and margins[1](index=1&type=chunk) - Significant turnover in the senior management team is identified as a risk that could disrupt operations and impede the implementation of the business plan[6](index=6&type=chunk)[175](index=175&type=chunk) - Covenants in the 2022 Credit Agreement and Term Loan Facility impose significant operating and financial restrictions, where a violation could lead to default and require immediate repayment of outstanding loans[13](index=13&type=chunk) - The company incurred significant asset impairment charges of **$148.5 million** in 2023 and **$68.4 million** in 2022 related to underperforming stores[210](index=210&type=chunk) [Unresolved Staff Comments](index=21&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None [Cybersecurity](index=22&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive information security program, overseen by a CISO and the Board's Audit Committee, to manage cybersecurity risks through annual assessments and various controls, with no material breaches identified to date - The company has an information security program that includes annual risk assessments and utilizes controls like EDR, IAM, MFA, and SIEM[19](index=19&type=chunk) - The Chief Information Security Officer (CISO), with **30 years of IT experience**, has primary responsibility for the security program[21](index=21&type=chunk) - Oversight is provided by the Enterprise Risk Council and the Audit Committee of the Board of Directors, which receives quarterly briefings[20](index=20&type=chunk)[44](index=44&type=chunk) - The company is not aware of any cybersecurity threat or breach that has materially affected its business, operations, or financial condition[215](index=215&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) As of February 3, 2024, the company operates 1,392 mostly leased stores averaging 33,477 square feet, owns its headquarters and five distribution centers totaling nearly 9.0 million square feet, and completed 23 store sale-leaseback transactions in 2023 - The company operates **1,392 stores**, with an average size of **33,477 sq. ft.** All but three stores are leased[239](index=239&type=chunk)[217](index=217&type=chunk) - In 2023, the company completed sale and leaseback transactions for **23 owned store locations**[24](index=24&type=chunk) Store Lease Expirations | Fiscal Year: | Expiring Leases | Leases Without Options | |--------------|-----------------|------------------------| | 2024 | 172 | 31 | | 2025 | 212 | 31 | | 2026 | 245 | 46 | | 2027 | 171 | 40 | | 2028 | 214 | 39 | | Thereafter | 377 | 24 | Distribution Center Locations and Size | Location | Year Opened | Total Square Footage (in thousands) | Number of Stores Served | |------------------|-------------|-------------------------------------|-------------------------| | Columbus, OH | 1989 | 3,559 | 338 | | Montgomery, AL | 1996 | 1,411 | 315 | | Tremont, PA | 2000 | 1,295 | 302 | | Durant, OK | 2004 | 1,297 | 227 | | Apple Valley, CA | 2019 | 1,416 | 210 | | Total | | 8,978 | 1,392 | [Legal Proceedings](index=24&type=section&id=Item%203.%20Legal%20Proceedings) The company refers to Note 9 of the consolidated financial statements for information regarding legal proceedings - For information on legal proceedings, see Note 9 to the consolidated financial statements[47](index=47&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reports that there are no mine safety disclosures - None [Information about our Executive Officers](index=25&type=section&id=Supplemental%20Item.%20Information%20about%20our%20Executive%20Officers) This section provides biographical information for the company's executive officers and other key employees as of April 18, 2024, detailing their roles and prior experience in areas such as marketing, supply chain, merchandising, and technology Executive Officers as of April 18, 2024 | Name | Age | Offices Held | |---|---|---| | Bruce K. Thorn | 56 | President and Chief Executive Officer | | Jonathan E. Ramsden | 59 | Executive Vice President, Chief Financial Officer and Chief Administrative Officer | | Ronald A. Robins, Jr. | 60 | Executive Vice President, Chief Legal and Governance Officer, General Counsel and Corporate Secretary | | Michael A. Schlonsky | 57 | Executive Vice President, Chief Human Resources Officer | - The report lists key employees responsible for marketing, stores, supply chain, merchandising for various categories (Home, Furniture, Seasonal, Food, Consumables), and technology[246](index=246&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=27&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE under "BIG", with approximately 893 registered holders as of April 12, 2024, and has not repurchased shares since Q4 2021, significantly underperforming market indices over the last five fiscal years - The company's common stock is listed on the NYSE under the symbol "BIG"[55](index=55&type=chunk) - The company has not made any repurchases under its share repurchase program since the fourth quarter of 2021, with **$159.4 million** remaining authorized for repurchase as of February 3, 2024[16](index=16&type=chunk)[250](index=250&type=chunk) Five-Year Cumulative Total Shareholder Return (Assuming $100 Investment on Feb 2, 2019) | Company / Index | Feb 2020 | Jan 2021 | Jan 2022 | Jan 2023 | Feb 2024 | |---|---|---|---|---|---| | Big Lots, Inc. | $90.13 | $208.77 | $142.58 | $63.48 | $22.42 | | S&P 500 Index | $121.56 | $142.53 | $172.46 | $161.03 | $199.42 | | S&P 500 Retailing Index | $120.61 | $170.52 | $180.58 | $149.54 | $210.02 | [Reserved](index=28&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In fiscal 2023, Big Lots reported a significant **13.6% decrease in net sales** and a **net loss of $481.9 million**, driven by macroeconomic pressures and increased expenses, while implementing strategic plans like "Operation North Star" and "Project Springboard" to improve profitability and liquidity through cost savings and asset monetization Fiscal 2023 vs 2022 Key Financial Results | Metric | 2023 (in millions) | 2022 (in millions) | Change | |---|---|---|---| | Net Sales | $4,722.1 | $5,468.3 | -13.6% | | Comparable Sales | | | -13.5% | | Gross Margin Rate | 35.7% | 35.0% | +70 bps | | Operating Loss | ($387.4) | ($261.5) | Increased Loss | | Diluted Loss Per Share | ($16.53) | ($7.30) | Increased Loss | | Inventory | $953.3 | $1,147.9 | -17.0% | - The company's strategic transformation plan, "Operation North Star," focuses on driving growth, funding the journey, and creating shareholder value through five key actions[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Launched "Project Springboard," a cost reduction initiative aiming for over **$200 million** in operating income improvement from cost of goods sold (**40%**), other gross margin improvements (**40%**), and SG&A reductions (**20%**)[64](index=64&type=chunk)[272](index=272&type=chunk) - Completed sale and leaseback transactions for its Apple Valley distribution center and **23 owned stores**, generating net proceeds of **$332.1 million** and a gain of **$212.5 million**[59](index=59&type=chunk) - Recorded a **$146.0 million** valuation allowance on deferred tax assets, which significantly increased income tax expense[60](index=60&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to interest rate risk on its variable-rate borrowings under the 2022 Credit Agreement, with a hypothetical 1% increase impacting operating results by approximately **$4.1 million** based on **$406.1 million** in borrowings as of February 3, 2024 - The company is exposed to interest rate risk on its borrowings under the 2022 Credit Agreement[307](index=307&type=chunk) - At February 3, 2024, borrowings under the 2022 Credit Agreement totaled **$406.1 million**, where a **1% increase** in the variable interest rate would result in an approximate **$4.1 million** impact on operating results[307](index=307&type=chunk) [Financial Statements and Supplementary Data](index=50&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2024, with Deloitte & Touche LLP providing an unqualified opinion on both the financial statements and internal controls, highlighting Critical Audit Matters related to Inventory Valuation, Asset Impairment, and Insurance Reserves - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting[310](index=310&type=chunk)[326](index=326&type=chunk) Consolidated Statement of Operations Highlights (in thousands) | Metric | 2023 | 2022 | 2021 | |---|---|---|---| | Net sales | $4,722,099 | $5,468,329 | $6,150,603 | | Gross margin | $1,686,611 | $1,913,503 | $2,397,007 | | Operating (loss) profit | ($387,357) | ($261,500) | $239,753 | | Net (loss) income | ($481,876) | ($210,708) | $177,778 | Consolidated Balance Sheet Highlights (in thousands) | Metric | Feb 3, 2024 | Jan 28, 2023 | |---|---|---| | Total Current Assets | $1,086,023 | $1,285,314 | | Total Assets | $3,325,309 | $3,690,931 | | Total Current Liabilities | $831,019 | $919,854 | | Long-term debt | $406,271 | $301,400 | | Total Shareholders' Equity | $284,495 | $763,907 | - Critical Audit Matters identified by the auditor include: Inventory Valuation Reserves, Impairment of Store Level Long-Lived Assets, and Insurance Valuation Reserves for General Liability and Workers' Compensation[333](index=333&type=chunk)[337](index=337&type=chunk)[400](index=400&type=chunk) - Subsequent to the fiscal year-end, on April 18, 2024, the company entered into a **$200 million** "first in, last out" delayed draw term loan facility and amended its 2022 Credit Agreement[520](index=520&type=chunk)[553](index=553&type=chunk)[560](index=560&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=82&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no disagreements with its accountants on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - None [Controls and Procedures](index=82&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures, as well as internal control over financial reporting, were effective as of February 3, 2024, with no material changes occurring during the most recent fiscal quarter - Management concluded that disclosure controls and procedures were effective as of the end of the period[563](index=563&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of February 3, 2024[564](index=564&type=chunk) - No material changes in internal control over financial reporting occurred during the most recent fiscal quarter[566](index=566&type=chunk) [Other Information](index=82&type=section&id=Item%209B.%20Other%20Information) The company reports that no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fourth quarter of fiscal 2023 - During the fourth quarter, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement[542](index=542&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=82&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable Part III [Directors, Executive Officers and Corporate Governance](index=83&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section incorporates by reference information from the company's 2024 Proxy Statement and Part I of this Form 10-K regarding directors, executive officers, corporate governance, and related compliance details - Information regarding directors, corporate governance, and executive officers is incorporated by reference from the 2024 Proxy Statement and Part I of this Form 10-K[586](index=586&type=chunk) [Executive Compensation](index=83&type=section&id=Item%2011.%20Executive%20Compensation) This section incorporates by reference information from the company's 2024 Proxy Statement concerning director and executive compensation, including the Compensation Committee Report and details on related interlocks and insider participation - Information regarding executive compensation is incorporated by reference from the 2024 Proxy Statement[569](index=569&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=84&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details the company's equity compensation plans as of February 3, 2024, including securities available for future issuance, with further security ownership information incorporated by reference from the 2024 Proxy Statement Equity Compensation Plan Information (as of Feb 3, 2024) | Plan Category | Securities to be issued upon exercise () | Weighted-average exercise price ($) | Securities remaining available for future issuance () | |---|---|---|---| | Equity compensation plans approved by security holders | 3,409,988 | — | 1,317,691 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 3,409,988 | — | 1,317,691 | - Information regarding security ownership of certain beneficial owners and management is incorporated by reference from the 2024 Proxy Statement[592](index=592&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=84&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section incorporates by reference information from the company's 2024 Proxy Statement regarding director independence and related person transactions - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2024 Proxy Statement[593](index=593&type=chunk) [Principal Accountant Fees and Services](index=84&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) This section incorporates by reference information from the 2024 Proxy Statement's "Audit Committee Disclosure" regarding fees paid to Deloitte & Touche LLP and the company's pre-approval policy for audit and non-audit services - Information regarding principal accountant fees and services is incorporated by reference from the 2024 Proxy Statement[572](index=572&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=85&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all documents filed as exhibits to the Form 10-K, including an index to consolidated financial statements and various agreements, with all financial statement schedules omitted as not required or included elsewhere - This section provides an index of the financial statements and a list of all exhibits filed with the Form 10-K[596](index=596&type=chunk) - All financial statement schedules have been omitted because they are not required, not applicable, or the information is included within the consolidated financial statements or notes[575](index=575&type=chunk) [Form 10-K Summary](index=88&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - None

Sales Performance - Q4 2023 net sales totaled $1.432 billion, a 7.2% decrease compared to $1.543 billion in Q4 2022, driven by an 8.6% decrease in comparable sales[3] - Net sales for the 14 weeks ended February 3, 2024 were $1,432,484 million, a decrease from $1,543,113 million in the 13 weeks ended January 28, 2023[43] - The company expects Q1 2024 comp sales to improve to mid-single-digit negative range, with gross margin rate improving by 200-250 basis points compared to the prior year[14] Inventory Management - Inventory at the end of Q4 2023 was $953.3 million, a 17.0% decrease from $1.148 billion in Q4 2022, due to lower on-hand and in-transit inventory[5] - The company reduced inventory by nearly $200 million and monetized assets worth over $300 million in 2023[24] Operating Performance - Q4 2023 GAAP operating loss was $24 million, with adjusted operating profit of $1 million, marking the first quarter of positive adjusted operating profit since Q4 2021[27] - Full Year 2022 operating loss was $261,500 million, with an adjusted (non-GAAP) figure of $209,951 million[35] - Q4 2022 operating loss was $8,055 million, with an adjusted (non-GAAP) figure of $2,334 million[38] - The adjusted operating profit for Q4 2023 was $1.06 million, compared to a reported operating loss of $23.77 million, after adjustments for gains on real estate sales and other expenses[51] - The full-year 2023 adjusted operating loss was $342.69 million, compared to a reported operating loss of $387.36 million, after adjustments for gains on real estate sales and other expenses[52] Net Loss and Earnings Per Share - Q4 2023 GAAP EPS loss was $1.05, with adjusted EPS loss of $0.28[27] - Full Year 2022 net loss was $210,708 million, with an adjusted (non-GAAP) figure of $171,858 million[35] - Q4 2022 net loss was $12,463 million, with an adjusted (non-GAAP) figure of $8,110 million[38] - Net loss for the 14 weeks ended February 3, 2024 was $30,709 million, compared to $12,463 million in the 13 weeks ended January 28, 2023[43] - Adjusted net loss for Q4 2023 was $8.28 million, compared to a reported net loss of $30.71 million, after adjustments for various costs and gains[51] - Full-year 2023 adjusted net loss was $329.31 million, compared to a reported net loss of $481.88 million, after adjustments for various costs and gains[52] - Adjusted diluted earnings per share for Q4 2023 were -$0.28, compared to a reported -$1.05, after adjustments for various costs and gains[51] - Full-year 2023 adjusted diluted earnings per share were -$11.30, compared to a reported -$16.53, after adjustments for various costs and gains[52] Bargain Penetration and Project Springboard - The company achieved over 60% bargain penetration in Q4 2023, exceeding the initial goal of 33%, and expects to grow to 75% penetration in 2024[27] - Project Springboard is on track to deliver a high proportion of the $200 million+ benefit in 2024[27] - The company expects to realize most of the $200 million+ bottom-line opportunities through Project Springboard in 2024[29] Liquidity and Cash Flow - Net liquidity at the end of Q4 2023 was $254 million, with significant free cash flow generated in the quarter[24] - The company ended Q4 fiscal 2023 with $46.4 million in Cash and Cash Equivalents and $406.3 million in Long-term Debt, compared to $44.7 million and $301.4 million respectively in Q4 fiscal 2022[36] - Net cash used in operating activities for the 53 weeks ended February 3, 2024 was $251,960 million, compared to $144,286 million in the 52 weeks ended January 28, 2023[49] Selling and Administrative Expenses - Full Year 2022 selling and administrative expenses were $2,040,334 million, with an adjusted (non-GAAP) figure of $1,971,938 million after excluding store asset impairment and gain on sale of real estate[35] - Q4 2022 selling and administrative expenses were $544,486 million, with an adjusted (non-GAAP) figure of $521,918 million[38] - Adjusted selling and administrative expenses for Q4 2023 were $509.86 million, down from $535.25 million as reported, after excluding various costs such as FDC contract termination and asset impairment charges[51] - Full-year 2023 adjusted selling and administrative expenses were $1.89 billion, down from $2.14 billion as reported, after excluding synthetic lease exit costs and other adjustments[52] Tax Rates - The adjusted effective income tax rate for Q4 2023 was 15.3%, compared to a reported rate of 11.3%, after adjustments for tax-related items[51] - Full-year 2023 adjusted effective income tax rate was 15.0%, compared to a reported rate of -11.5%, after adjustments for tax-related items[52]

QUARTERLY RESULTS PRESENTATION Fourth Quarter 2023 current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. Although we believe the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of our knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect our business, financ ...

Big Lots, Inc. (NYSE:BIG) Q4 2023 Earnings Call Transcript March 7, 2024 8:00 AM ET Company Participants Alvin Concepcion - VP of IR Bruce Thorn - President and CEO Jonathan Ramsden - EVP, CFO and Chief Administrative Officer Conference Call Participants Brad Thomas - KeyBanc Capital Markets Joe Feldman - Telsey Advisory Group Scott Stringer - Wolfe Research Alvin Concepcion Good morning. This is Alvin Concepcion, Vice President of Investor Relations at Big Lots. Welcome to the Big Lots Fourth Quarter Confe ...

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 ...