Big Lots, in a statement providing a fourth-quarter outlook, also offered a long-range growth plan that includes the addition of 500 stores and a margin plan that details a significant value-creation opportunity over the coming years.
In doing so, Big Lots established the following:
- A sales goal of $8 to $10 billion driven by about 500 net store openings, merchandise sales productivity initiatives and continued e-commerce growth.
- An operating-margin goal of 6% to 8% based on gross margin improvement and expense leverage.
- A return-on-invested-capital goal of 20% to 25%.
As for the fourth quarter of fiscal 2021, Big Lots stated that through the end of December, the company’s performance was at the upper end of its expectations. On a quarter-to-date basis running to December’s end, the company achieved a two-year comparable sales increase of 9%.
Since early January, the company has experienced softening traffic and sales trends that it believes have been significantly effected by consumer response to the rapid spread of the Omicron strain of Covid-19 as well as adverse weather conditions. Based on a continuation of current trends, the company would expect to achieve a flat to low-single-digit percentage two-year comparable sales increase for fiscal January, below prior expectations, and diluted earnings per share for the quarter in the $1.80 to $1.95 range.
In announcing the goals and the fourth quarter expectations, Bruce Thorn, Big Lots president and CEO, said, “We are highly confident that Operation North Star (the company’s strategic plan) has put us on track to create tremendous long-term value for shareholders, and that we now have the visibility to provide a long-term financial outlook. We see a clear and long runway for growth ahead of us, coupled with the opportunity to drive returns through margin expansion and judicious capital allocation. We have all of the foundations in place to accomplish this, including a seasoned and ambitious team, new tools and technologies, and a proven pipeline of innovation. We will do all of this by accomplishing our mission to help our customer Live Big and Save Lots.”
