Big Lots (BIGGQ) investor relations material

Executive summary

• Q1 net sales declined 10.2% year-over-year to $1.01 billion, with comparable sales down 9.9% due to reduced discretionary spending and macroeconomic pressures.

• Gross margin rate improved by 190 basis points to 36.8%, driven by operational initiatives, lower markdowns, and better inventory alignment.

• Liquidity was enhanced through aggressive cost, CapEx, and inventory management, and a new $200 million term loan facility.

• Project Springboard targets $185 million in savings by year-end 2024, with $200 million+ in bottom-line opportunities identified.

• Five Key Actions and organizational updates in merchandising are central to turnaround efforts.

Financial highlights

• Q1 net sales were $1.01 billion, down 10.2% year-over-year; comp sales declined 9.9%.

• Adjusted net loss was $132.3 million, with an adjusted diluted loss per share of $4.51; GAAP net loss was $205.0 million, or $6.99 per share.

• Gross margin rate improved to 36.8%, up 190 basis points year-over-year.

• Adjusted SG&A expenses were $491.8 million, down 3.6% year-over-year; operating loss rate was (19.1)%.

• Inventory cost down 12.7% year-over-year to $949.9 million.

Outlook and guidance

• Q2 2024 comp sales expected to decline mid- to high-single digits, with sequential improvement from Q1.

• Q2 gross margin rate projected to improve by at least 300 basis points year-over-year.

• SG&A and related expenses in Q2 expected to be down low to mid-single digits versus 2023.

• Full-year CapEx expected to be in line with or below 2023, with guidance at $60 million; three new store openings planned for Q3.

• Focus remains on driving positive comp sales and continued gross margin rate growth in the back half of the year.