Q2 comparable sales and adjusted expenses
better than expected; gross margin rate improves
year-over-year
Q2 GAAP EPS loss of $8.56; adjusted EPS loss of $3.24
Sale/leaseback of California distribution center and 22 owned
stores completed since quarter-end, with approximately $294 million of net proceeds
Continue to expect business improvements in
the back half of 2023, with a moderating comp sales decline and
improving gross margins; cost reduction and productivity
initiatives through 2024 on track
For the Q2 Results Presentation, Please
Visit:
https://www.biglots.com/corporate/investors
COLUMBUS, Ohio, Aug. 29,
2023 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today
reported a net loss of $249.8
million, or $8.56 per share,
for the second quarter of fiscal 2023 ended July 29, 2023. This result includes a net
after-tax charge of $155.4 million,
or $5.32 per share, associated with
the net impact of synthetic lease exit costs, forward distribution
center closure costs, adjustments to impairment charges, a
gain on the sale of real estate and related expenses, consulting
fees related to the company's cost reduction and productivity
initiatives, and a valuation allowance on deferred tax assets.
Excluding this charge, the adjusted net loss in the second quarter
of 2023 was $94.4 million, or
$3.24 per share (see non-GAAP table
included later in this release). The adjusted net loss for the
second quarter of fiscal 2022 was $66.0
million, or $2.28 per
share.
Net sales for the second quarter of fiscal 2023 totaled
$1.139 billion, a 15.4% decrease
compared to $1.346 billion for the
same period last year. The decline to last year was driven by a
comparable sales decrease of 14.6%. A net decrease in store count,
partially offset by new stores and relocations, contributed
approximately 80 basis points of sales decline compared to the
second quarter of 2022.
Commenting on today's results announcement, Bruce Thorn, President and CEO of Big Lots
stated, "Our results for Q2 illustrate that we remain in a very
challenging environment, in which our core lower-income customer
remains under significant pressure and has limited capacity for
higher-ticket discretionary purchases. However, we did see some
sequential improvement in the quarter, and were pleased to come in
ahead of or in line with our guidance on all key metrics. We
believe this improvement was driven by the five key actions we have
taken, which are to own bargains, communicate unmistakable value,
increase store relevance, win with omnichannel, and drive
productivity."
"While the consumer environment will likely remain challenging
and result in negative comp sales in the back half of the year, we
are now in a position to get back to playing offense. This will be
supported by the incredible efforts of our associates, and our
outstanding vendor partners, who remain aligned with our efforts to
offer great quality products and amazing value. As we make further
progress on our five key actions, we are optimistic that trends
will continue to improve, albeit slowly, through the remainder of
this year, aided by a higher penetration of bargains, more newness
in our assortment, freight reductions, ongoing cost reduction and
productivity efforts, more effective promotions, and a more
normalized level of markdowns."
"On the cost reduction and productivity front, we are well on
track to achieve our structural SG&A savings goal of over
$100 million in 2023. In
addition, we have a clear path to over $200
million of additional bottom-line opportunities across gross
margin and SG&A, and we expect a high proportion of these
benefits to be realized on a run-rate basis by the end of
2024."
"Turning to liquidity, we are very comfortable with our position
coming into the second half of the year. We significantly
strengthened our balance sheet by closing the $294 million sale/leaseback deal on August 25, the proceeds from which were not
included in our quarter-end liquidity of $258 million. Combined with our efforts to
aggressively manage costs, inventory, and capital expenditures, we
are prepared and positioned to navigate through the current
economic challenges."
"Overall, we are excited to see signs of improvement across
multiple fronts, and are confident that our five key actions will
translate into continued sequential improvement in financial
performance as the year progresses."
A summary of adjustments to loss per diluted share is included
in the table below.
|
|
|
Q2 2023
|
Earnings (loss) per
diluted share - as reported
|
($8.56)
|
|
|
Adjustment to exclude
net impact of synthetic lease
exit costs, forward distribution center contract
termination costs, store asset impairment charges,
gain on the sale of real estate and related
expenses, fees related to a cost reduction
and productivity initiative, and valuation allowance
on deferred tax assets (1)
|
$5.32
|
Earnings (loss) per
diluted share – adjusted basis
|
($3.24)
|
(1) Non-GAAP detailed reconciliation
provided in statement below
|
|
Inventory and Cash Management
Inventory ended the second quarter of fiscal 2023 at $0.983 billion compared to $1.159 billion at the end of the second quarter
last year, with the 15.2% decrease driven by lower in-transit
inventory, on-hand units, and average unit cost.
The company ended the second quarter of fiscal 2023 with
$46.0 million of Cash and Cash
Equivalents and $493.2 million of
Long-term Debt under its $900 million
asset-based lending facility, compared to $49.1 million of Cash and Cash Equivalents and
$252.6 million of Long-term Debt as
of the end of the second quarter of fiscal 2022. The Long-term Debt
balance did not reflect proceeds from our sale/leaseback
transaction, which closed subsequent to quarter-end.
Sale/Leaseback Update
On August 25, 2023, the company
closed the sale and leaseback of its Apple Valley, CA distribution center and 22
owned stores, resulting in gross proceeds of $300 million. Net of expenses and taxes,
the company received net proceeds of approximately $294 million. The company used $101 million of the net proceeds to fully pay
down its synthetic lease on the Apple
Valley, CA distribution center, and the remainder of the
proceeds to pay down debt on its asset-based lending facility. Of
the four remaining stores that were included in the purchase and
sale agreement for the sale and leaseback, a closing date has not
yet been set for two stores, and two stores have been excluded from
the final transaction. The company will continue to evaluate
monetization opportunities for the remaining owned stores and its
corporate headquarters building.
Share Repurchases
The company did not execute any share repurchases during the
quarter. The company has $159 million
remaining under its December 2021
$250 million authorization.
Company Guidance
For the third quarter, the company expects comps to be down in the
low-teen range, modestly improved relative to the second quarter. A
net decrease in store count, partially offset by new stores and
relocations, will contribute approximately 140 basis points of
sales decline compared to the third quarter of 2022. With regard to
gross margin rate, the company expects accelerated rate improvement
in the second half of the year, with approximately 200 basis points
of improvement in the third quarter relative to the prior year
quarter. The company expects adjusted SG&A dollars to be down
by a low-single digit percentage versus 2022. The company does not
expect to recognize any tax benefit in the third quarter as we
expect to remain in a three-year cumulative loss position, which
requires us to record valuation allowances against deferred tax
assets, including those related to net operating losses. The
company is not providing EPS guidance at this point. The company
expects a share count of approximately 29.3 million for the third
quarter.
For the fourth quarter, the company expects comp sales to be
improved relative to the third quarter and be in the
high-single-digit negative range, as key actions to improve the
business continue to gain traction. The company expects the fourth
quarter gross margin rate to improve to a rate into the high-30s
range driven by more normalized markdown activity, lower freight
costs, and cost reduction and productivity initiatives.
Conference Call/Webcast
The company will host a conference call today at 8:00 a.m. ET to discuss the financial results for
the first quarter of fiscal 2023. A webcast of the conference call
is available through the Investor Relations section of the
company's website http://www.biglots.com. An archive of the call
will be available through the Investor Relations section of the
company's website http://www.biglots.com/ after 12:00 p.m. ET today and will remain available
through midnight ET on Tuesday, September
12, 2023. A replay of this call will also be available
beginning today at 12:00 p.m. ET
through September 12 by dialing
877.660.6853 (Toll Free) or 201.612.7415 (Toll) and entering Replay
Conference ID 13740499.
About Big Lots
Headquartered in Columbus,
Ohio, Big Lots, Inc. (NYSE: BIG) is one of America's
largest home discount retailers, operating more than 1,420 stores
in 48 states, as well as a best-in-class ecommerce platform with
expanded fulfillment and delivery capabilities. The Company's
mission is to help customers "Live Big and Save Lots" by offering
unique treasures and exceptional bargains on everything for their
home, including furniture, seasonal decor, kitchenware, pet
supplies, food items, laundry and cleaning essentials and more. Big
Lots is the recipient of Home Textiles Today's 2021 Retail Titan
Award. For more information about the company or to find the store
nearest you, visit biglots.com.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements in this release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and such statements are
intended to qualify for the protection of the safe harbor provided
by the Act. The words "anticipate," "estimate," "continue,"
"could," "approximate," "expect," "objective," "goal," "project,"
"intend," "plan," "believe," "will," "should," "may," "target,"
"forecast," "guidance," "outlook" and similar expressions generally
identify forward-looking statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of management as to future occurrences and trends,
including statements expressing optimism or pessimism about future
operating results or events and projected sales, earnings, capital
expenditures and business strategy. Forward-looking statements are
based upon a number of assumptions concerning future conditions
that may ultimately prove to be inaccurate. Forward-looking
statements are and will be based upon management's then-current
views and assumptions regarding future events and operating
performance and are applicable only as of the dates of such
statements. Although 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 business,
financial condition, results of operations or liquidity.
Forward-looking statements that we make herein and in other
reports and releases are not guarantees of future performance and
actual results may differ materially from those discussed in such
forward-looking statements as a result of various factors,
including, but not limited to, the current economic and credit
conditions, inflation, the cost of goods, our inability to
successfully execute strategic initiatives, competitive pressures,
economic pressures on our customers and us, the availability of
brand name closeout merchandise, 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 other filings with the SEC, including Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K. This release should
be read in conjunction with such filings, and you should consider
all of these risks, uncertainties and other factors carefully in
evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date they are made. We
undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects in our public announcements
and SEC filings.
BIG LOTS, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
JULY 29
|
|
JULY 30
|
|
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$46,034
|
|
$49,144
|
|
|
|
Inventories
|
|
983,225
|
|
1,159,008
|
|
|
|
Other current assets
|
|
99,902
|
|
110,926
|
|
|
|
Total current
assets
|
|
1,129,161
|
|
1,319,078
|
|
|
|
|
|
|
|
|
|
|
Operating lease right-of-use
assets
|
|
1,490,076
|
|
1,700,600
|
|
|
|
|
|
|
|
|
|
|
Property and equipment - net
|
|
721,896
|
|
753,696
|
|
|
|
|
|
|
|
|
|
|
Deferred income taxes
|
|
0
|
|
20,991
|
|
|
Other assets
|
|
38,555
|
|
36,995
|
|
|
|
|
|
$3,379,688
|
|
$3,831,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$338,473
|
|
$403,697
|
|
|
|
Current operating lease
liabilities
|
|
240,076
|
|
233,883
|
|
|
|
Property, payroll and other
taxes
|
|
72,352
|
|
95,323
|
|
|
|
Accrued operating expenses
|
|
123,454
|
|
121,583
|
|
|
|
Insurance reserves
|
|
35,707
|
|
40,210
|
|
|
|
Accrued salaries and wages
|
|
28,135
|
|
23,476
|
|
|
|
Income taxes payable
|
|
598
|
|
1,632
|
|
|
|
Total current
liabilities
|
|
838,795
|
|
919,804
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
493,200
|
|
252,600
|
|
|
|
|
|
|
|
|
|
|
Noncurrent operating lease
liabilities
|
|
1,453,961
|
|
1,572,575
|
|
|
Deferred income taxes
|
|
485
|
|
0
|
|
|
Insurance reserves
|
|
57,845
|
|
59,621
|
|
|
Unrecognized tax benefits
|
|
8,456
|
|
8,266
|
|
|
Other liabilities
|
|
220,917
|
|
127,767
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
306,029
|
|
890,727
|
|
|
|
|
|
$3,379,688
|
|
$3,831,360
|
|
|
BIG LOTS, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS ENDED
|
|
13 WEEKS ENDED
|
|
|
|
JULY 29, 2023
|
|
JULY 30, 2022
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$1,139,361
|
100.0
|
|
$1,346,221
|
100.0
|
|
Gross margin
|
|
375,884
|
33.0
|
|
438,548
|
32.6
|
|
Selling and administrative
expenses
|
|
456,689
|
40.1
|
|
510,444
|
37.9
|
|
Depreciation expense
|
|
41,282
|
3.6
|
|
37,197
|
2.8
|
Operating loss
|
|
(122,087)
|
(10.7)
|
|
(109,093)
|
(8.1)
|
|
Interest expense
|
|
(11,175)
|
(1.0)
|
|
(3,904)
|
(0.3)
|
|
Other income (expense)
|
|
0
|
0.0
|
|
257
|
0.0
|
Loss before income taxes
|
|
(133,262)
|
(11.7)
|
|
(112,740)
|
(8.4)
|
|
Income tax expense (benefit)
|
|
116,575
|
10.2
|
|
(28,590)
|
(2.1)
|
Net loss
|
|
($249,837)
|
(21.9)
|
|
($84,150)
|
(6.3)
|
|
|
|
|
|
|
|
|
Earnings (loss) per common
share
|
|
|
|
|
|
|
|
Basic
|
|
($8.56)
|
|
|
($2.91)
|
|
|
Diluted
|
|
($8.56)
|
|
|
($2.91)
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
|
29,175
|
|
|
28,919
|
|
|
Dilutive effect of share-based
awards
|
|
-
|
|
|
-
|
|
|
Diluted
|
|
29,175
|
|
|
28,919
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common
share
|
|
$0.00
|
|
|
$0.30
|
|
BIG LOTS, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(In thousands, except per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
26 WEEKS ENDED
|
|
26 WEEKS ENDED
|
|
|
|
JULY 29, 2023
|
|
JULY 30, 2022
|
|
|
|
|
%
|
|
|
%
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$2,262,938
|
100.0
|
|
$2,720,935
|
100.0
|
|
Gross margin
|
|
768,353
|
34.0
|
|
943,142
|
34.7
|
|
Selling and administrative
expenses
|
|
1,073,755
|
47.4
|
|
991,223
|
36.4
|
|
Depreciation expense
|
|
77,864
|
3.4
|
|
74,553
|
2.7
|
Operating loss
|
|
(383,266)
|
(16.9)
|
|
(122,634)
|
(4.5)
|
|
Interest expense
|
|
(20,324)
|
(0.9)
|
|
(6,654)
|
(0.2)
|
|
Other income (expense)
|
|
5
|
0.0
|
|
1,297
|
0.0
|
Loss before income taxes
|
|
(403,585)
|
(17.8)
|
|
(127,991)
|
(4.7)
|
|
Income tax expense (benefit)
|
|
52,325
|
2.3
|
|
(32,759)
|
(1.2)
|
Net loss
|
|
($455,910)
|
(20.1)
|
|
($95,232)
|
(3.5)
|
|
|
|
|
|
|
|
|
Earnings (loss) per common
share
|
|
|
|
|
|
|
|
Basic
|
|
($15.67)
|
|
|
($3.31)
|
|
|
Diluted
|
|
($15.67)
|
|
|
($3.31)
|
|
Weighted average common shares
outstanding
|
|
|
|
|
|
|
|
Basic
|
|
29,096
|
|
|
28,770
|
|
|
Dilutive effect of share-based
awards
|
|
-
|
|
|
-
|
|
|
Diluted
|
|
29,096
|
|
|
28,770
|
|
Cash dividends declared per common
share
|
|
$0.30
|
|
|
$0.60
|
|
BIG LOTS, INC. AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
13 WEEKS ENDED
|
|
13 WEEKS ENDED
|
|
|
|
|
|
JULY 29, 2023
|
|
JULY 30, 2022
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash provided by operating
activities
|
|
$18,327
|
|
$60,824
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(7,897)
|
|
(45,631)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in financing
activities
|
|
(15,716)
|
|
(27,756)
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash and cash
equivalents
|
|
(5,286)
|
|
(12,563)
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
Beginning of period
|
|
51,320
|
|
61,707
|
|
|
|
End of period
|
|
$46,034
|
|
$49,144
|
|
|
BIG LOTS, INC. AND SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
26 WEEKS ENDED
|
|
26 WEEKS ENDED
|
|
|
|
|
|
JULY 29, 2023
|
|
JULY 30, 2022
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
Net cash used in operating
activities
|
|
($150,611)
|
|
($135,409)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing
activities
|
|
(20,378)
|
|
(86,872)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing
activities
|
|
172,293
|
|
217,703
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash
equivalents
|
|
1,304
|
|
(4,578)
|
|
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
|
Beginning of period
|
|
44,730
|
|
53,722
|
|
|
|
End of period
|
|
$46,034
|
|
$49,144
|
|
|
BIG LOTS, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(In thousands, except per share
data)
(Unaudited)
The following tables reconcile: selling and administrative
expenses, selling and administrative expense rate, depreciation
expense, depreciation expense rate, operating loss, operating loss
rate, income tax expense (benefit), effective income tax rate, net
loss, and diluted earnings (loss) per share for the second quarter
of 2023, the year-to-date 2023, the second quarter of 2022, and the
year-to-date 2022 (GAAP financial measures) to adjusted selling and
administrative expenses, adjusted selling and administrative
expense rate, adjusted depreciation expense, adjusted depreciation
expense rate, adjusted operating loss, adjusted operating loss
rate, adjusted income tax expense (benefit), adjusted effective
income tax rate, adjusted net loss, and adjusted diluted earnings
(loss) per share (non-GAAP financial measures).
Second Quarter of 2023 - Thirteen weeks ended July
29, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Adjustment to
exclude synthetic
lease exit costs and
related expenses
|
|
Adjustment to exclude
forward distribution
center ("FDC") contract
termination costs and
related expenses
|
|
Adjustment
to exclude
store asset
impairment
charges
|
|
Adjustment to
exclude gain on
sale of real estate
and related
expenses
|
|
Adjustment to
exclude fees related
to a cost reduction
and productivity
initiative
|
|
Adjustment to
exclude valuation
allowance on
deferred tax
assets
|
|
As Adjusted
(non-GAAP)
|
Selling and administrative
expenses
|
$
456,689
|
|
$
(43)
|
|
$
(1,993)
|
|
$
928
|
|
$
3,393
|
|
$
(5,420)
|
|
$
-
|
|
$
453,554
|
Selling and administrative expense
rate
|
40.1 %
|
|
(0.0 %)
|
|
(0.2 %)
|
|
0.1 %
|
|
0.3 %
|
|
(0.5 %)
|
|
-
|
|
39.8 %
|
Depreciation expense
|
|
41,282
|
|
-
|
|
(7,037)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
34,245
|
Depreciation expense rate
|
|
3.6 %
|
|
-
|
|
(0.6 %)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3.0 %
|
Operating loss
|
|
(122,087)
|
|
43
|
|
9,030
|
|
(928)
|
|
(3,393)
|
|
5,420
|
|
-
|
|
(111,915)
|
Operating loss rate
|
|
(10.7 %)
|
|
0.0 %
|
|
0.8 %
|
|
(0.1 %)
|
|
(0.3 %)
|
|
0.5 %
|
|
-
|
|
(9.8 %)
|
Income tax expense (benefit)
(1)
|
116,575
|
|
11
|
|
2,342
|
|
(239)
|
|
(804)
|
|
1,272
|
|
(147,850)
|
|
(28,693)
|
Effective income tax rate
|
|
(87.5 %)
|
|
0.0 %
|
|
(1.8 %)
|
|
0.2 %
|
|
0.6 %
|
|
(1.0 %)
|
|
112.8 %
|
|
23.3 %
|
Net loss
|
|
|
(249,837)
|
|
32
|
|
6,688
|
|
(689)
|
|
(2,589)
|
|
4,148
|
|
147,850
|
|
(94,397)
|
Diluted earnings (loss) per
share
|
$
(8.56)
|
|
$
0.00
|
|
$
0.23
|
|
$
(0.02)
|
|
$
(0.09)
|
|
$
0.14
|
|
$
5.07
|
|
$
(3.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The income tax impact of each adjustment
was determined prior to consideration of the valuation allowance on
deferred tax assets.
|
|
|
|
|
|
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted depreciation
expense, adjusted depreciation expense rate, adjusted operating
loss, adjusted operating loss rate, adjusted income tax expense
(benefit), adjusted effective income tax rate, adjusted net loss,
and adjusted diluted earnings (loss) per share are "non-GAAP
financial measures" as that term is defined by Rule 101 of
Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17
CFR Part 229). These non-GAAP financial measures exclude from the
most directly comparable financial measures calculated and
presented in accordance with accounting principles generally
accepted in the United States of
America ("GAAP") synthetic lease exit costs and related
expenses of $43 ($32, net of tax), FDC contract termination costs
and related expenses of $9,030
($6,688, net of tax), store asset
impairment charges net of liability extinguishment for terminated
leases of previously impairment stores of $928 ($689, net of
tax), a gain on sale of real estate and related expenses of
$3,393 ($2,589, net of tax), fees related to a cost
reduction and productivity initiative of $5,420 ($4,148, net
of tax), and a valuation allowance on deferred tax assets after tax
of $147,850.
Year-to-Date 2023 - Twenty-six weeks ended July 29,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Adjustment to
exclude synthetic
lease exit costs and
related expenses
|
|
Adjustment to exclude
forward distribution
center ("FDC") contract
termination costs and
related expenses
|
|
Adjustment
to exclude
store asset
impairment
charges
|
|
Adjustment to
exclude gain on
sale of real estate
and related
expenses
|
|
Adjustment to
exclude fees
related to a cost
reduction and
productivity
initiative
|
|
Adjustment to
exclude valuation
allowance on
deferred tax
assets
|
|
As Adjusted
(non-GAAP)
|
Selling and administrative
expenses
|
$ 1,073,755
|
|
$
(53,610)
|
|
$
(10,616)
|
|
$ (82,881)
|
|
$
7,192
|
|
$
(5,420)
|
|
$
-
|
|
$
928,420
|
Selling and administrative expense
rate
|
47.4 %
|
|
(2.4 %)
|
|
(0.5 %)
|
|
(3.7 %)
|
|
0.3 %
|
|
(0.2 %)
|
|
-
|
|
41.0 %
|
Depreciation expense
|
|
77,864
|
|
-
|
|
(8,030)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
69,834
|
Depreciation expense rate
|
|
3.4 %
|
|
-
|
|
(0.4 %)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3.1 %
|
Operating loss
|
|
(383,266)
|
|
53,610
|
|
18,646
|
|
82,881
|
|
(7,192)
|
|
5,420
|
|
-
|
|
(229,901)
|
Operating loss rate
|
|
(16.9 %)
|
|
2.4 %
|
|
0.8 %
|
|
3.7 %
|
|
(0.3 %)
|
|
0.2 %
|
|
-
|
|
(10.2 %)
|
Income tax expense (benefit)
(1)
|
52,325
|
|
13,830
|
|
4,810
|
|
20,210
|
|
(1,703)
|
|
1,272
|
|
(147,850)
|
|
(57,106)
|
Effective income tax rate
|
|
(13.0 %)
|
|
(4.5 %)
|
|
(1.6 %)
|
|
(6.6 %)
|
|
0.6 %
|
|
(0.4 %)
|
|
48.3 %
|
|
22.8 %
|
Net loss
|
|
|
(455,910)
|
|
39,780
|
|
13,836
|
|
62,671
|
|
(5,489)
|
|
4,148
|
|
147,850
|
|
(193,114)
|
Diluted earnings (loss) per
share
|
$
(15.67)
|
|
$
1.37
|
|
$
0.48
|
|
$
2.15
|
|
$
(0.19)
|
|
$
0.14
|
|
$
5.08
|
|
$
(6.64)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The income tax impact of each adjustment
was determined prior to consideration of the valuation allowance on
deferred tax assets.
|
|
|
|
|
|
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted depreciation
expense, adjusted depreciation expense rate, adjusted operating
loss, adjusted operating loss rate, adjusted income tax expense
(benefit), adjusted effective income tax rate, adjusted net loss,
and adjusted diluted earnings (loss) per share are "non-GAAP
financial measures" as that term is defined by Rule 101 of
Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17
CFR Part 229). These non-GAAP financial measures exclude from the
most directly comparable financial measures calculated and
presented in accordance with GAAP synthetic lease exit costs and
related expenses of $53,610
($39,780, net of tax), FDC contract
termination costs and related expenses of $18,646 ($13,836,
net of tax), store asset impairment charges net of liability
extinguishment for terminated leases of previously impairment
stores of $82,881 ($62,671, net of tax), a gain on sale of real
estate and related expenses of $7,192
($5,489, net of tax), fees related to
a cost reduction and productivity initiative of $5,420 ($4,148, net
of tax), and a valuation allowance on deferred tax assets after tax
of $147,850.
Second Quarter of 2022 - Thirteen weeks ended July
30, 2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Adjustment to
exclude store asset
impairment charges
|
|
As Adjusted
(non-GAAP)
|
Selling and administrative
expenses
|
$
510,444
|
|
$
(24,105)
|
|
$
486,339
|
Selling and administrative expense
rate
|
37.9 %
|
|
(1.8 %)
|
|
36.1 %
|
Operating loss
|
|
(109,093)
|
|
24,105
|
|
(84,988)
|
Operating loss rate
|
|
(8.1 %)
|
|
1.8 %
|
|
(6.3 %)
|
Income tax benefit
|
|
(28,590)
|
|
5,956
|
|
(22,634)
|
Effective income tax rate
|
25.4 %
|
|
0.1 %
|
|
25.5 %
|
Net loss
|
|
|
(84,150)
|
|
18,149
|
|
(66,001)
|
Diluted earnings (loss) per
share
|
$
(2.91)
|
|
$
0.63
|
|
$
(2.28)
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating loss,
adjusted operating loss rate, adjusted income tax benefit, adjusted
effective income tax rate, adjusted net loss, and adjusted diluted
earnings (loss) per share are "non-GAAP financial measures" as that
term is defined by Rule 101 of Regulation G (17 CFR Part 244) and
Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP
financial measures exclude from the most directly comparable
financial measures calculated and presented in accordance with GAAP
store asset impairment charges of $24,105 ($18,149,
net of tax).
Year-to-Date 2022 - Twenty-six weeks ended July 30,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As Reported
|
|
Adjustment to
exclude store asset
impairment charges
|
|
As Adjusted
(non-GAAP)
|
Selling and administrative
expenses
|
$
991,223
|
|
$
(24,105)
|
|
$
967,118
|
Selling and administrative expense
rate
|
36.4 %
|
|
(0.9 %)
|
|
35.5 %
|
Operating loss
|
|
(122,634)
|
|
24,105
|
|
(98,529)
|
Operating loss rate
|
|
(4.5 %)
|
|
0.9 %
|
|
(3.6 %)
|
Income tax benefit
|
|
(32,759)
|
|
5,956
|
|
(26,803)
|
Effective income tax rate
|
|
25.6 %
|
|
0.2 %
|
|
25.8 %
|
Net loss
|
|
|
(95,232)
|
|
18,149
|
|
(77,083)
|
Diluted earnings (loss) per
share
|
$
(3.31)
|
|
$
0.63
|
|
$
(2.68)
|
The above adjusted selling and administrative expenses, adjusted
selling and administrative expense rate, adjusted operating loss,
adjusted operating loss rate, adjusted income tax benefit, adjusted
effective income tax rate, adjusted net loss, and adjusted diluted
earnings (loss) per share are "non-GAAP financial measures" as
that term is defined by Rule 101 of Regulation G (17 CFR Part 244)
and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP
financial measures exclude from the most directly comparable
financial measures calculated and presented in accordance with GAAP
store asset impairment charges of $24,105 ($18,149,
net of tax).
Our management believes that the disclosure of these non-GAAP
financial measures provides useful information to investors because
the non-GAAP financial measures present an alternative and more
relevant method for measuring our operating performance, excluding
special items included in the most directly comparable GAAP
financial measures, that management believes is more indicative of
our on-going operating results and financial condition. Our
management uses these non-GAAP financial measures, along with the
most directly comparable GAAP financial measures, in evaluating our
operating performance.
View original content to download
multimedia:https://www.prnewswire.com/news-releases/big-lots-reports-q2-results-301911790.html
SOURCE Big Lots, Inc.