Big Lots, Inc. (NYSE: BIG) today reported a net loss of $84.2 million, or $2.91 per share, for the second quarter of fiscal 2022 ended July 30, 2022. This result includes an after-tax charge of $18.1 million, or $0.63 per share associated with store asset impairment charges. Excluding this charge, the adjusted net loss was $66.0 million, or $2.28 per share (see non-GAAP table included later in this release). Net income for the second quarter of fiscal 2021 was $37.7 million, or $1.09 per diluted share.
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, and an increase of 7.5% compared to the second quarter of 2019. The decline to last year was driven by a comparable sales decrease of 9.2%. The 3-year comparable sales growth rate was 3.6% in the second quarter of fiscal 2022, an acceleration from 1.9% in the first quarter. Net new stores and relocations contributed approximately 160 basis points of sales growth compared to the second quarter of 2021.
Commenting on today’s results announcement, Bruce Thorn, President and CEO of Big Lots stated, “We remain laser focused on helping our customers navigate these challenging times by delivering outstanding value across our assortment. We are managing the business prudently, while working hard to build a stronger company and deliver on our commitments to our customers, associates, and shareholders.”
Thorn continued, “I’d like to thank our associates for rising to the challenge in Q2, by continuing to provide an elevated customer shopping experience and again achieving a top-tier Net Promoter Score above 80%. Our outstanding team helped us to deliver results in line with the financial guidance we provided coming into the quarter. We managed costs tightly, made great progress on repositioning our assortment towards better bargains/closeouts and lower price points, and took important steps to enhance our balance sheet and secure our liquidity. We also brought inventories down materially versus Q1, putting us on track to right-size our inventory position by Q4.”
“This, in turn, better positions us to bring even more deals to our customers. Consumers are stretched by inflation and starting to trade down more. We are here to help them, with strategically adjusted opening price points and great value throughout our stores. Further, we are making our bargains/closeouts and treasures even easier to find with end-caps and signage that are simpler and more compelling.”
“We are moving faster to provide even better deals and assortments for our customers by leveraging our vendor relationships and excellent private label brands. We are also building additional capabilities to grow our ecommerce business. We remain highly confident in the enormous value creation opportunity from Operation North Star, and I’ve never been more excited about the future.”
Inventory and Cash Management
Inventory ended the second quarter of fiscal 2022 at $1,159.0 million compared to $943.8 million for the same period last year, with the 22.8% increase encompassing significantly higher unit costs and a significant increase in in-transit inventory.
The company ended the second quarter of fiscal 2022 with $49.1 million of Cash and Cash Equivalents and $252.6 million of Long-term Debt, compared to $293.3 million of Cash and Cash Equivalents and no Long-term Debt as of the end of the second quarter of fiscal 2021. On July 29th, the company entered into an engagement letter with PNC Capital Markets LLC and PNC Bank, National Association, pursuant to which PNC Capital Markets has agreed to arrange, on a best efforts basis, a 5-year syndicated asset-based revolving credit facility up to $900 million, with an additional uncommitted increase option of up to $300 million. The company expects to enter into the new credit facility during the third fiscal quarter ending October 28, 2022, replacing and refinancing its existing $600 million 5-year unsecured credit facility.
About Big Lots
Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is one of America’s largest home discount retailers, operating more than 1,440 stores in 48 states, as well as a best-in-class ecommerce platform with expanded fulfillment and delivery capabilities.
