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Oct 28, 2023
Big Lots Q3 2024 Earnings Report
Reported mixed Q3 2023 results, with GAAP EPS positive but adjusted EPS negative, while making progress on strategic initiatives and cost management.
Key Takeaways
Big Lots reported net sales of $1.027 billion for Q3 2023, a 14.7% decrease compared to the same period last year. GAAP EPS was $0.16, while adjusted EPS resulted in a loss of $4.38. The company is on track to deliver an adjusted Q4 operating result ahead of last year and expects quarterly year-over-year improvements to continue through 2024.
Q3 comparable sales were in line with guidance.
Gross margin rate and adjusted expenses were ahead of guidance.
The company completed a $306 million sale/leaseback of its California distribution center and 23 owned stores.
Project Springboard is on track to deliver a high proportion of the $200 million+ benefit in 2024.
Big Lots
Big Lots
Forward Guidance
For the fourth quarter, the company expects comp sales to improve relative to the third quarter and be in the high-single-digit negative range, as key actions to improve the business continue to gain traction. The 53rd week is expected to contribute approximately 400 basis points of sales benefit compared to the fourth quarter of 2022. This benefit will be partially offset by a net decrease in store count which will have an unfavorable impact of approximately 300 basis points of sales. The company expects adjusted SG&A dollars to be down by a low-single digit percentage versus 2022, including the impact of additional expense from the recently completed sale and leaseback. The company is not providing EPS guidance at this point, but does expect its Q4 adjusted operating result to be ahead of last year.
Positive Outlook
- Comp sales expected to improve relative to Q3.
- 53rd week expected to contribute approximately 400 basis points of sales benefit.
- Gross margin rate expected to improve to approximately 38%.
- Adjusted SG&A dollars expected to be down by a low-single digit percentage versus 2022.
- Q4 adjusted operating result expected to be ahead of last year.
Challenges Ahead
- Comp sales expected to be in the high-single-digit negative range.
- Net decrease in store count expected to have an unfavorable impact of approximately 300 basis points of sales.
- Company does not expect to recognize any tax benefit in the fourth quarter.
- Company is not providing EPS guidance at this point.
- Environment remains challenging.