Big Lots Inc · Q2 2023 earnings

Briefing

Reported a net loss with comparable sales decline, but inventory reduction efforts are on track.

Big Lots reported a net loss of $84.2 million for Q2 2022, with net sales decreasing by 7.6% to $1.35 billion compared to the same period last year. The decline was driven by a comparable sales decrease of 9.2%. The company is focused on managing costs, repositioning its assortment, and enhancing its balance sheet.

• Q2 GAAP EPS loss of $2.91; adjusted EPS loss of $2.28.
• Net sales for the second quarter of fiscal 2022 totaled $1.35 billion, a 7.6% decrease compared to $1.46 billion for the same period last year.
• Comparable sales decreased 9.2% compared to the same period last year.
• Inventory ended the second quarter of fiscal 2022 at $1,159.0 million.

Headline financials

Revenue & EPS history

For the third quarter, the company expects one-year comps to be down in the low double-digit range. Net new stores will add about 140 bps of growth versus 2021. The company expects continued significant promotional activity in Q3, resulting in a quarter gross margin rate into the mid-30s, and that SG&A dollars will grow low single- digits to 2021. Given an atypically wide range of outcomes, the company is not providing EPS guidance at this point. The company expects a share count of approximately 28.9 million for Q3. The company is taking aggressive actions to significantly improve the gross margin rate in Q4, to a rate that is approximately in-line with the prior year quarter. In addition, the company will continue to take actions to reduce expenses.