PR Newswire | May 28, 2021 06:00AM EDT

05/28 05:00 CDT

Big Lots Reports Record Q1 ResultsQ1 SALES UP 13% WITH EPS MORE THAN DOUBLE PRIOR YEARQ1 COMPS INCREASE 11.3%CONTINUED STRONG PROGRESS ON STRATEGIC INITIATIVES COLUMBUS, Ohio, May 28, 2021

COLUMBUS, Ohio, May 28, 2021 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today reported net income of $94.6 million, or $2.62 per diluted share, for the first quarter of fiscal 2021 ended May 1, 2021, which compares to the company's guidance, as provided on March 5, 2021, of $1.30 to $1.45 per diluted share. Net income for the first quarter of fiscal 2020 was $49.3 million, or $1.26 per diluted share. Net sales for the first quarter of fiscal 2021 totaled $1,626 million, a 13% increase compared to $1,439 million for the same period last year, with the growth resulting from an 11.3% increase in comparable sales and sales growth from new and relocated non-comp stores.

Remarking on today's announcement, Bruce Thorn, President and CEO of Big Lots stated, "We have completed a record first quarter that was driven both by our underlying Operation North Star strategic initiatives and by customer response to a third round of stimulus distributions that began in March. For the quarter, we saw double digit growth across all merchandise categories other than Food and Consumables, which were greatly bolstered last year by quarantine-related stock-up spending early in the pandemic. We also saw notable strength in our Seasonal assortment, particularly lawn & garden, while Broyhill, launched just last year, drove $225 million in sales for the quarter across our Furniture and Home assortments, continuing its rapid progress toward becoming an established $1 billion brand. Additionally, our ecommerce business grew 30%, and our Rewards program reached a record high number of active members.

Our outstanding results for the quarter were achieved despite significant supply chain and freight headwinds, which we expect to continue through the balance of the year. Meanwhile, we are taking other important steps to strengthen our business. These include rolling out our forward distribution center strategy to relieve pressure at our regional distribution centers and more efficiently process bulk items such as furniture; strengthening our vendor partnerships to create even greater value for our customers and improve assortment availability; and investing in data-driven space planning technology designed to enhance our customer satisfaction and per-store productivity through more relevant location- based assortments. We are excited by our results, but know that we still have many opportunities for growth and improvement across the business."

Mr. Thorn further remarked, "Big Lots is growing in a productive and sustainable manner and we are doing so knowing that our goal is to create the best value for our customer so that she can Live Big and Save Lots. Our growth is driven by our Operation North Star, but is fulfilled by our 37,000 associates across our stores, the distribution centers, and in our home office. I am so proud to be a member of this team and I am deeply thankful for their unwavering commitment."

Inventory and Cash ManagementInventory ended the first quarter of fiscal 2021 at $901.5 million compared to $806.6 million for the same period last year, an increase of 11.8%. Excluding in-transit, on-hand inventory was up approximately 3.0% to the prior year.

The company ended the first quarter of fiscal 2021 with $613 million of Cash and Cash Equivalents and $32 million of Long-term Debt, compared to $312 million of Cash and Cash Equivalents and $437 million of Long-term Debt as of the end of the first quarter of fiscal 2020.

Share Repurchase AuthorizationAs previously announced, on August 27, 2020 the company's Board of Directors authorized the repurchase of up to $500 million of the company's outstanding common shares. The authorization may be utilized to repurchase shares in the open market and/or in privately negotiated transactions at the company's discretion, subject to market conditions and other factors. In the first quarter of fiscal 2021, we invested $78 million to repurchase 1.1 million shares at an average cost of $67.45. Through the end of the first quarter of fiscal 2021, we had utilized $250 million under this authorization to repurchase 4.9 million shares, at an average cost of $51.07.

DividendAs announced in a separate press release, on May 26, 2021 the Board of Directors declared a quarterly cash dividend of $0.30 per common share. This dividend payment of approximately $10.5 million will be payable on June 25, 2021, to shareholders of record as of the close of business on June 11, 2021.

Company OutlookThe Company continues to believe it does not have sufficient visibility to provide full year guidance. Based on currently available information, for the second quarter of fiscal 2021 the Company expects to achieve diluted earnings per share in the range of $1.00 to $1.15, based on a low double digit comparable sales decline which equates to a two-year stacked comparable sales increase of around 20%. The foregoing second quarter guidance does not incorporate further anticipated share repurchases pursuant to the remaining $250 million available under the $500 million share repurchase authorization approved by the Company's Board of Directors on August 27, 2020.

Conference Call/WebcastThe company will host a conference call today at 8:00 a.m. to discuss the financial results for the first quarter of fiscal2021. 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. today and will remain available through midnight on Friday, June 11, 2021. A replay of this call will also be available beginning today at 12:00 p.m. through June 11 by dialing 877.660.6853 (Toll Free) or 201.612.7415 (Toll) and entering Replay Conference ID 13719566 All times are Eastern Time.

Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is a neighborhood discount retailer operating 1,414 stores in 47 states, as well as a best-in-class ecommerce platform with expanded capabilities via BOPIS, curbside pickup, Instacart and Big Lots NOW with same day delivery. The company's product assortment is focused on home essentials: Furniture, Seasonal, Soft Home, Food, Consumables, and Hard Home. Ranked #1 on Total Retail's 2020 Top 100 Omnichannel Retailers list, Big Lots' mission is to help people Live BIG and Save Lots. The company strives to be the BIG difference for a better life by delivering unmatched value to customers through the ultimate treasure hunt shopping experience, being a "best place to work" culture for associates, rewarding shareholders with consistent growth and top-tier returns, and doing good in local communities. For more information about the company, visit www.biglots.com.

Cautionary Statement Concerning Forward-Looking StatementsCertain 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," "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 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 the company believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of 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 the company makes 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, developments related to the COVID-19 coronavirus pandemic, current economic and credit conditions, the cost of goods, the inability to successfully execute strategic initiatives, competitive pressures, economic pressures on customers and the company, the availability of brand name closeout merchandise, trade restrictions, freight costs, the risks discussed in the Risk Factors section of the company's 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 thereof. The company undertakes 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 the company makes on related subjects in public announcements and SEC filings.

BIG LOTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

MAY 1 MAY 2

2021 2020

(Unaudited) (Unaudited)

ASSETS

Current assets:

Cash and cash equivalents $613,329 $311,872

Inventories 901,482 806,559

Other current assets 114,001 75,978

Total current assets 1,628,812 1,194,409

Operating lease right-of-use assets 1,631,817 1,206,133

Property and equipment - net 723,158 849,857

Deferred income taxes 17,741 6,161

Other assets 36,008 65,226

$4,037,536 $3,321,786

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $380,942 $275,461

Current operating lease liabilities 219,367 207,899

Property, payroll and other taxes 112,532 96,248

Accrued operating expenses 158,136 138,212

Insurance reserves 34,803 35,572

Accrued salaries and wages 73,799 34,622

Income taxes payable 70,340 16,903

Total current liabilities 1,049,919 804,917

Long-term debt 32,063 436,684

Noncurrent operating lease liabilities 1,466,090 1,046,711

Deferred income taxes 3,805 41,171

Insurance reserves 59,379 56,759

Unrecognized tax benefits 10,601 10,279

Other liabilities 147,177 41,332

Shareholders' equity 1,268,502 883,933

$4,037,536 $3,321,786

BIG LOTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

13 WEEKS ENDED 13 WEEKS ENDED

MAY 1, 2021 MAY 2, 2020

% %

(Unaudited) (Unaudited)

Net sales $1,625,552 100.0 $1,439,149 100.0

Gross margin 653,947 40.2 570,756 39.7

Selling and administrative expenses 497,418 30.6 458,631 31.9

Depreciation expense 33,977 2.1 37,690 2.6

Operating profit 122,552 7.5 74,435 5.2

Interest expense (2,568) (0.2) (3,322) (0.2)

Other income (expense) 960 0.1 (3,317) (0.2)

Income before income taxes 120,944 7.4 67,796 4.7

Income tax expense 26,381 1.6 18,473 1.3

Net income $94,563 5.8 $49,323 3.4

Earnings per common share

Basic $2.68 $1.26

Diluted $2.62 $1.26

Weighted average common shares outstanding

Basic 35,349 39,129

Dilutive effect of share-based awards 693 111

Diluted 36,042 39,240

Cash dividends declared per common share $0.30 $0.30

BIG LOTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

13 WEEKS ENDED 13 WEEKS ENDED

MAY 1, 2021 MAY 2, 2020

(Unaudited) (Unaudited)

Net cash provided by operating activities $204,293 $146,121

Net cash used in investing activities (32,170) (28,913)

Net cash (used in) provided by financing activities (118,350) 141,943

Increase in cash and cash equivalents 53,773 259,151

Cash and cash equivalents:

Beginning of period 559,556 52,721

End of period $613,329 $311,872

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SOURCE Big Lots, Inc.