Big Lots, Inc. · OTC:BIGGQ
Big Lots — Q2 2023 Earnings Presentation
20 slides from Big Lots's earnings presentation, Aug 31, 2023
Slide 1: Quarterly Results Presentation Second Quarter 2023
Q2 | 2023 | 1 QUARTERLY RESULTS PRESENTATION SECOND QUARTER 2023
Slide 2: Forward-Looking Statements
Q2 | 2023 | 2 FORWARD-LOOKING STATEMENTS Certain statements in this presentation 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 wor
Slide 3: Second Quarter Results, Guidance, Wrap-Up, Appendix
Q2 | 2023 | 3 SECOND QUARTER RESULTS GUIDANCE WRAP-UP APPENDIX
Slide 4: Management commentary on Q2 results
Q2 | 2023 | 4 Our results for Q2 illustrate that we remain in a very challenging environment. 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 key action
Slide 5: Big Lots at a Glance
Q2 | 2023 | 5Q2 | 2023 | 5 23% 22% 10% 7% 14% 13% 12% Furniture Seasonal The Lot, Apparel, Electronics, etc. Hard Home Food Soft Home Consumables Chart based on Q2 2023 sales Diversified Category Mix National Store Footprint Industry-leading delivery options, easy checkout, multiple payment types in
Slide 6: Second Quarter Summary
Q2 | 2023 | 6 Ahead of Guidance Slightly Up vs. LY $0.98B Inventory at the end of Q2 Down 15.2% vs. LY -6.8% Adjusted operating expense1 vs. LY Better than Expected -14.6% Comps 33.0% Gross margin SECOND QUARTER SUMMARY 1 Adjusted Operating Expenses are comprised of adjusted Selling and Administrati
Slide 7: Q2 2023 Comp Sales by Category
Q2 | 2023 | 7Q2 | 2023 | 7 Q2 2023 COMP SALES BY CATEGORY Sequential Improvements Across Most Categories Relative to Q1, Particularly Furniture and Soft Home Seasonal Furniture Hard Home Soft Home Consumables Food The Lot, Apparel, Electronics Total -26% -18% -12% -11% -7% -5% 1% -15%
Slide 8: Inventory Reduction in Line with Q2 Sales
Q2 | 2023 | 8Q2 | 2023 | 8 INVENTORY REDUCTION IN LINE WITH Q2 SALES 22.8% 5.3% -7.3% -18.8% -15.2% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 YOY Inventory Growth (Decline)
Slide 9: Adjusted Q2 2023 Summary Income Statement
Q2 | 2023 | 9Q2 | 2023 | 9 Net Sales Gross Margin Gross Margin Rate Adjusted Operating Expenses(1)(2) Adjusted Operating Expense Rate(2) Adjusted Operating Loss (2) Adjusted Operating Loss Rate(2) Adjusted Diluted (Loss) Earnings Per Share(2) Diluted Weighted Average Shares ADJUSTED Q2 2023 SUMMARY
Slide 10: Capital Allocation
Q2 | 2023 | 10 ~$75M FY2023 CAPEX CAPITAL ALLOCATION $294M Asset Monetization $900M ABL Credit Facility vs. ~$80M previously Net available liquidity of ~$258M* at end of Q2; not inclusive of proceeds from the sale/leaseback Net proceeds relating to sale/leaseback of California DC and 22 owned stores
Slide 11: Second Quarter Results, Guidance, Wrap-Up, Appendix
Q2 | 2023 | 11 SECOND QUARTER RESULTS GUIDANCE WRAP-UP APPENDIX
Slide 12: Q3 2023 Guidance
Q2 | 2023 | 12 COMP SALES GROSS MARGIN IMPROVEMENT COST REDUCTION Down low-teens, modestly improved relative to Q2 Improvement of approximately 200 basis points versus the prior year quarter SG&A expenses down versus last year, in the low-single digit percentage range Q3 2023 GUIDANCE
Slide 13: Q4 2023 Guidance
Q2 | 2023 | 13 COMP SALES GROSS MARGIN IMPROVEMENT COST REDUCTION Down high-single-digit range, improved relative to Q3 Improvement versus last year, into the high 30s range Structural SG&A savings over $100M for FY2023 Q4 2023 GUIDANCE
Slide 14: Five Key Actions
Q2 | 2023 | 14 FIVE KEY ACTIONS 1. Own bargains, achieving over one-third bargains penetration by the end of 2023 2. Communicate unmistakable value to customers through comparable value ticketing, bargain end-caps, and targeted marketing 3. Increase store relevance by leveraging our opportunity in r
Slide 15: Project Springboard
Q2 | 2023 | 15 PROJECT SPRINGBOARD • Project Springboard: Aided by an external partner, identified and began actioning $200M+ of bottom-line opportunities across gross margin and SG&A; high proportion of the benefits expected to be realized on a run-rate basis by the end of 2024 • Sources of savings
Slide 16: Second Quarter Results, Guidance, Wrap-Up, Appendix
Q2 | 2023 | 16 SECOND QUARTER RESULTS GUIDANCE WRAP-UP APPENDIX
Slide 17: Q2 Wrap-Up
Q2 | 2023 | 17 Q2 WRAP-UP • Comparable sales decline of 14.6% in Q2, ahead of our guidance range; adjusted EPS loss of $3.24 due to year-over-year sales decline, continued cost pressures, and markdowns on seasonal merchandise • Successfully reduced inventory approximately in line with sales • Comps
Slide 18: Second Quarter Results, Guidance, Wrap-Up, Appendix
Q2 | 2023 | 18 SECOND QUARTER RESULTS GUIDANCE WRAP-UP APPENDIX
Slide 19: Second Quarter 2023 GAAP to Non-GAAP Reconciliation
Q2 | 2023 | 19Q2 | 2023 | 19 SECOND QUARTER 2023 GAAP TO NON-GAAP RECONCILIATION 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 lo
Slide 20: Second Quarter 2022 GAAP to Non-GAAP Reconciliation
Q2 | 2023 | 20Q2 | 2023 | 20 SECOND QUARTER 2022 GAAP TO NON-GAAP RECONCILIATION 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