Big Lots, still trying to build traction on its turnaround, posted a third-quarter comp decline even as earnings and revenue exceeded or met a Wall Street estimate.
The company also announced the appointment of former Burlington Stores executive Kristen Cox to senior vice president, chief stores officer. Former Big Lots executive Seth Marks returns to the retailer in the newly established role of senior vice president, extreme value sourcing.
Net income for Big Lots was $4.7 million, or 16 cents per diluted share, versus a net loss of $103 million, or $3.56 per diluted share, in the year-earlier period, the company reported. Adjusted for one-time events, net loss was $127.9 million or $4.38 per diluted share, versus net loss of $86.7 million, or $2.99 per diluted share, in the year-prior quarter.
An analyst consensus estimate published by Yahoo Finance called for a loss of $4.66 per diluted share and revenues of $1.03 billion.
Comparable sales tumbled 13.2%. Net sales were $1.03 billion versus $1.2 billion in the year-before quarter.
Operating profit was $19.7 million versus an operating loss of $130.8 million in the year-previous period. Adjusted operating loss was $113.9 million versus $109.1 million.
Bruce Thorn, Big Lots president and CEO, said home categories continue to struggle especially given consumer wariness about big-ticket purchases. He noted Big Lots had seen some sequential improvement in seasonal items. The company also has been able to rebuild its furnishings assortment after last year’s sudden closure of United Furniture, a key vendor.
In announcing the financial results, Thorn said, “Although the environment remains challenging, we continued to make significant progress in turning around our business. Our key strategic actions are building momentum, and we continue to play offense with our efforts to deliver incredible bargains and communicate unmistakable value. As a result, we are now on track to deliver an adjusted Q4 operating result ahead of last year, which would mark the first quarter of year-over-year improvement in nearly three years, and we expect quarterly year-over-year improvements to continue through 2024.”
As for third-quarter results, Thorn said, “We were able to deliver on or exceed our beginning-of-quarter guidance on all key metrics. We posted a sequential improvement in comp sales, significant year-over-year improvement in gross margin rate, and adjusted SG&A well below last year despite absorbing additional expense related to the recent sale/leaseback of our California distribution center and 23 owned stores. We believe the improvements in Q3 were driven by the five key actions that underlie our strategy, which are to own bargains, communicate unmistakable value, increase store relevance, win with omnichannel and drive productivity.
“Additionally, we are on track to achieve over $100 million of SG&A cost savings prior to Project Springboard benefits for the year,” Thorn continued. “Project Springboard is off to a strong start and on track to deliver $200 million of bottom-line benefits, spanning gross margin and SG&A, of which we expect a high proportion to be realized on a run-rate basis by the end of 2024. To support our ongoing turnaround, our efforts to aggressively manage costs, inventory and capital expenditures, as well as monetize our assets with completion of a $306 million sale/leaseback in the quarter, have allowed us to significantly strengthen our balance sheet. Our ongoing efforts are providing us with ample liquidity to weather the macroeconomic challenges, even if they are prolonged.”
Cox will oversee the development and implementation of operational strategies to drive sales, improve margins and enhance customer service across all stores, filling the role left vacant by the retirement of Nick Padovano earlier this year, Big Lots reported. Marks rejoins Big Lots from Channel Control Merchants, for which he most recently served as the chief merchandising officer. CCM bills itself as a reverse logistics retailer selling products through a network of physical stores located across the Southeast, Texas and Canada.
