Big Lots Reports Fourth Quarter and Full Year 2023 Results

March 10, 2024  by HFBusiness Staff in Business Strategy, Industry   

Excluding this loss, the adjusted net loss in the fourth quarter of 2023 was $8.3 million, or $0.28 per share (see non-GAAP table included later in this release). The adjusted net loss for the fourth quarter of fiscal 2022 was $8.1 million, or $0.28 per share.

Report Summary

·      Q4 2023 comparable sales, gross margin rate, expenses, and inventory in line with guidance

·      Q4 GAAP operating loss of $24 million; adjusted operating profit of $1 million; first quarter of positive adjusted operating profit since Q4 2021

·      Q4 GAAP EPS loss of $1.05; adjusted EPS loss of $0.28

·      Expect quarterly year-over-year gross margin improvements to continue through 2024 with a path to positive comparable sales

·      Achieved nearly 60% bargain penetration in Q4, well exceeding our initial goal of 33%; expect to grow to 75% penetration in 2024

·      Project Springboard on track to deliver a high proportion of the $200 million+ benefit in 2024

Net sales for the fourth quarter of fiscal 2023 totaled $1.432 billion, a 7.2% decrease compared to $1.543 billion for the same period last year. The decline to last year was driven by a comparable sales decrease of 8.6%. The net impact of the benefit of the 53rd week, offset by a net decrease in store count, contributed approximately 140 basis points of sales growth compared to the fourth quarter of 2022.

Commenting on today's results announcement, Bruce Thorn, President and CEO of Big Lots stated, "I'm pleased to report another quarter of sequential improvement in comps and gross margin rate, while continuing to take out costs. For the third quarter in a row, we did what we said we would do, and despite a challenging macroeconomic environment and well documented weather challenges in January, we finished the year in a much better place than where we started.”

“That said, there's a lot of work to do in 2024, and we are moving aggressively to accelerate our transformation, return to positive comparable sales, and continue to improve our gross margin rate over the course of the year."

"For Q4, as we announced on February 12, we delivered on our guidance for comparable sales, gross margin rate, operating expenses, and inventory.  We believe progress on the five key actions that underlie our strategy, which are to own bargains, communicate unmistakable value, increase store relevance, win customers for life with our omnichannel efforts, and drive productivity, enabled us to deliver adjusted operating profit growth in Q4, marking the first quarter of adjusted operating profit in two years."

"We expect quarterly year over year gross margin improvements to continue in 2024, and see a path to positive comparable sales as the year progresses. Further, we expect to realize most of the $200 million+ of bottom-line opportunities through Project Springboard. We also expect to significantly grow our bargains penetration to 75% of our sales, and within that, have an expanded assortment of extreme bargains.”

"Our efforts to aggressively manage costs, inventory, and capital expenditures, as well as monetize owned assets, have enabled us to maintain liquidity through a challenging period. We took out over $140 million of SG&A during the year, cut capex by almost 60% year over year, reduced inventory by nearly $200 million, and monetized assets worth over $300 million.”

“Our net liquidity at the end of the fourth quarter was $254 million, and we generated significant free cash flow in the fourth quarter, enabling us to reduce our ABL balance. As we look into 2024, we continue to evaluate additional financing options as a normal part of prudently managing our business. While near-term conditions may remain challenging, we look forward to returning the company to health and prosperity, and believe we are taking the right actions to do that."

"Overall, our five key actions are gaining momentum and have enabled us to again sequentially improve results in the fourth quarter.  We are excited to return to comp sales growth as 2024 progresses, driven by continued progress on these key actions, and to significantly improve our gross margin in every quarter versus last year."

Inventory and Cash Management
Inventory ended the fourth quarter of fiscal 2023 at $953.3 million compared to $1.148 billion at the end of the fourth quarter last year, with the 17.0% decrease driven by lower on-hand units and in-transit inventory.

The company ended the fourth quarter of fiscal 2023 with $46.4 million of Cash and Cash Equivalents and $406.3 million of Long-term Debt under its $900 million asset-based lending facility, compared to $44.7 million of Cash and Cash Equivalents and $301.4 million of Long-term Debt as of the end of the fourth quarter of fiscal 2022. During the fourth quarter, the company paid down $127 million of Long-term Debt on a net basis.

Conference Call/Webcast
An archive of the conference call will be available on the Investor Relations section of the company's website at http://www.biglots.com/corporate/investors/ through midnight Thursday, March 21. In addition, a replay of the call will be available through March 21 by dialing 877.660.6853 (Toll Free) or 201.612.7415 (Toll) and enter the Replay Conference ID: 13744496.

You can also find the Q4 Results Presentation at the above investors’ link.