big-20230729

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 29, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 001-08897

BIG LOTS, INC.

(Exact name of registrant as specified in its charter)

Ohio 06-1119097

(State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)

4900 E. Dublin-Granville Road, Columbus, Ohio 43081

(Address of Principal Executive Offices) (Zip Code)

(614) 278-6800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common shares	BIG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesþ Noo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesþ Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o

Accelerated filer þ

Non-accelerated filer o

Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of the registrant’s common shares, $0.01 par value, outstanding as of September 1, 2023, was 29,194,640.


		Page
Part I. Financial Information		2

Item 1.	Financial Statements (Unaudited)	2

a)	Consolidated Statements of Operations and Comprehensive Loss for the Thirteen and Twenty-six Weeks Ended July 29, 2023 and July 30, 2022	2

b)	Consolidated Balance Sheets at July 29, 2023 and January 28, 2023	3

c)	Consolidated Statements of Shareholders’ Equity for the Thirteen and Twenty-six Weeks Ended July 29, 2023 and July 30, 2022	4

d)	Consolidated Statements of Cash Flows for the Twenty-six Weeks Ended July 29, 2023 and July 30, 2022	5

e)	Notes to Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27

Part II. Other Information		27

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3.	Defaults Upon Senior Securities	28

Item 4.	Mine Safety Disclosures	28

Item 5.	Other Information	28

Item 6.	Exhibits	29

Signature		30


BIG LOTS, INC. AND SUBSIDIARIES Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (In thousands, except per share amounts)


	Thirteen Weeks Ended				Twenty-six Weeks Ended
	July 29, 2023		July 30, 2022		July 29, 2023		July 30, 2022
Net sales	$	1,139,361	$	1,346,221	$	2,262,938	$	2,720,935
Cost of sales (exclusive of depreciation expense shown separately below)	763,477		907,673		1,494,585		1,777,793
Gross margin	375,884		438,548		768,353		943,142
Selling and administrative expenses	456,689		510,444		1,073,755		991,223
Depreciation expense	41,282		37,197		77,864		74,553
Operating loss	(122,087)		(109,093)		(383,266)		(122,634)
Interest expense	(11,175)		(3,904)		(20,324)		(6,654)
Other income (expense)	—		257		5		1,297
Loss before income taxes	(133,262)		(112,740)		(403,585)		(127,991)
Income tax expense (benefit)	116,575		(28,590)		52,325		(32,759)
Net loss and comprehensive loss	$	(249,837)	$	(84,150)	$	(455,910)	$	(95,232)

Earnings (loss) per common share
Basic	$	(8.56)	$	(2.91)	$	(15.67)	$	(3.31)
Diluted	$	(8.56)	$	(2.91)	$	(15.67)	$	(3.31)

Weighted-average common shares outstanding
Basic	29,175		28,919		29,096		28,770
Dilutive effect of share-based awards	—		—		—		—
Diluted	29,175		28,919		29,096		28,770

Cash dividends declared per common share	$	—	$	0.30	$	0.30	$	0.60


	July 29, 2023		January 28, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	46,034	$	44,730
Inventories	983,225		1,147,949
Other current assets	99,902		92,635
Total current assets	1,129,161		1,285,314
Operating lease right-of-use assets	1,490,076		1,619,756
Property and equipment - net	721,896		691,111
Deferred income taxes	—		56,301
Other assets	38,555		38,449
Total assets	$	3,379,688	$	3,690,931

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	338,473	$	421,680
Current operating lease liabilities	240,076		252,320
Property, payroll, and other taxes	72,352		71,274
Accrued operating expenses	123,454		111,752
Insurance reserves	35,707		35,871
Accrued salaries and wages	28,135		26,112
Income taxes payable	598		845
Total current liabilities	838,795		919,854
Long-term debt	493,200		301,400
Noncurrent operating lease liabilities	1,453,961		1,514,009
Deferred income taxes	485		—
Insurance reserves	57,845		58,613
Unrecognized tax benefits	8,456		8,091
Other liabilities	220,917		125,057
Shareholders’ equity:
Preferred shares - authorized 2,000 shares; $0.01 par value; none issued	—		—
Common shares - authorized 298,000 shares; $0.01 par value; issued 117,495 shares; outstanding 29,192 shares and 28,959 shares, respectively	1,175		1,175
Treasury shares - 88,303 shares and 88,536 shares, respectively, at cost	(3,093,779)		(3,105,175)
Additional paid-in capital	623,347		627,714
Retained earnings	2,775,286		3,240,193
Total shareholders’ equity	306,029		763,907
Total liabilities and shareholders’ equity	$	3,379,688	$	3,690,931


	Common			Treasury			Additional Paid-In Capital		Retained Earnings
	Shares	Amount		Shares	Amount						Total
Thirteen Weeks Ended July 30, 2022
Balance - April 30, 2022	28,893	$	1,175	88,602	$	(3,107,806)	$	619,754	$	3,467,205	$	980,328
Comprehensive loss	—	—		—	—		—		(84,150)		(84,150)
Dividends declared ($0.30 per share)	—	—		—	—		—		(9,068)		(9,068)
Purchases of common shares	(9)	—		9	(241)		—		—		(241)
Restricted shares vested	48	—		(48)	1,687		(1,687)		—		—
Performance shares vested	—	—		—	—		—		—		—

Share-based compensation expense	—	—		—	—		3,858		—		3,858
Balance - July 30, 2022	28,932	$	1,175	88,563	$	(3,106,360)	$	621,925	$	3,373,987	$	890,727

Twenty-Six Weeks Ended July 30, 2022
Balance - January 29, 2022	28,476	$	1,175	89,019	$	(3,121,602)	$	640,522	$	3,487,268	$	1,007,363
Comprehensive loss	—	—		—	—		—		(95,232)		(95,232)
Dividends declared ($0.60 per share)	—	—		—	—		—		(18,049)		(18,049)
Purchases of common shares	(289)	—		289	(10,880)		—		—		(10,880)
Restricted shares vested	404	—		(404)	14,170		(14,170)		—		—
Performance shares vested	341	—		(341)	11,952		(11,952)		—		—

Share-based compensation expense	—	—		—	—		7,525		—		7,525
Balance - July 30, 2022	28,932	$	1,175	88,563	$	(3,106,360)	$	621,925	$	3,373,987	$	890,727

Thirteen Weeks Ended July 29, 2023
Balance - April 29, 2023	29,139	$	1,175	88,356	$	(3,095,791)	$	620,971	$	3,025,004	$	551,359
Comprehensive loss	—	—		—	—		—		(249,837)		(249,837)
Dividends declared ($0.00 per share)	—	—		—	—		—		119		119
Purchases of common shares	(6)	—		6	(49)		—		—		(49)
Restricted shares vested	59	—		(59)	2,061		(2,061)		—		—


Share-based compensation expense	—	—		—	—		4,437		—		4,437
Balance - July 29, 2023	29,192	$	1,175	88,303	$	(3,093,779)	$	623,347	$	2,775,286	$	306,029

Twenty-Six Weeks Ended July 29, 2023
Balance - January 28, 2023	28,959	$	1,175	88,536	$	(3,105,175)	$	627,714	$	3,240,193	$	763,907
Comprehensive loss	—	—		—	—		—		(455,910)		(455,910)
Dividends declared ($0.30 per share)	—	—		—	—		—		(8,997)		(8,997)
Purchases of common shares	(134)	—		134	(1,466)		—		—		(1,466)
Restricted shares vested	367	—		(367)	12,862		(12,862)		—		—


Share-based compensation expense	—	—		—	—		8,495		—		8,495
Balance - July 29, 2023	29,192	$	1,175	88,303	$	(3,093,779)	$	623,347	$	2,775,286	$	306,029


BIG LOTS, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements (Unaudited)


	Twenty-six Weeks Ended
(In thousands)	July 29, 2023		July 30, 2022
Supplemental disclosure of cash flow information:
Cash paid for interest	$	17,992	$	7,977
Cash paid for income taxes, excluding impact of refunds	570		3,879
Gross proceeds from long-term debt	910,500		998,000
Gross payments of long-term debt	718,700		748,900


Cash paid for operating lease liabilities	241,652		183,186
Non-cash activity:
Assets acquired under finance lease	6,680		3,792
Accrued property and equipment	8,653		26,086
Deemed acquisition in “failed sale-leaseback transaction”	100,000		—
Operating lease assets obtained in exchange for operating lease liabilities	112,743		123,906
Valuation allowance on deferred tax assets	147,850		—


Instrument (In thousands)	July 29, 2023		January 28, 2023
2022 Credit Agreement	$	493,200	$	301,400
2023 Term Notes	11,239		—
Total debt	$	504,439	$	301,400
Less current portion of 2023 Term Notes (included in Accrued operating expenses)	(11,239)		—
Long-term debt	$	493,200	$	301,400


	Dividends Per Share		Amount Declared		Amount Paid
2023:			(In thousands)		(In thousands)
First quarter	$	0.30	$	9,116	$	9,587
Second quarter	—		(119)		153
Total	$	0.30	$	8,997	$	9,740


	Number of Shares	Weighted Average Grant-Date Fair Value Per Share
Outstanding non-vested RSUs at January 28, 2023	875,503	$	34.75
Granted	1,354,505	$	13.40
Vested	(308,051)	$	29.28
Forfeited	(45,949)	$	29.99
Outstanding non-vested RSUs at April 29, 2023	1,876,008	$	20.35
Granted	228,662	$	8.71
Vested	(58,823)	$	31.28
Forfeited	(63,066)	$	20.12
Outstanding non-vested RSUs at July 29, 2023	1,982,781	$	18.68


	Second Quarter				Year-to-Date
(In thousands)	2023		2022		2023		2022
Furniture	$	263,720	$	322,744	$	575,864	$	746,003
Seasonal	244,359		331,299		421,367		565,470
Food	159,171		172,513		323,991		349,133
Soft Home	143,926		163,672		285,806		333,338
Consumables	135,197		151,989		270,964		309,223
Apparel, Electronics, & Other	116,592		115,870		232,288		238,905
Hard Home	76,396		88,134		152,658		178,863
Net sales	$	1,139,361	$	1,346,221	$	2,262,938	$	2,720,935


		2023	2022
Stores open at the beginning of the fiscal year		1,425	1,431
Stores opened during the period		4	18
Stores closed during the period		(7)	(7)
	Stores open at the end of the period	1,422	1,442


	Number of Units	Weighted Average Grant-Date Fair Value Per Share
Outstanding TSR PSUs and SVCA PSUs at January 28, 2023	60,924	$	55.76
Granted	712,293	$	4.82
Vested	—	$	—
Forfeited	(5,750)	$	24.36
Outstanding TSR PSUs and SVCA PSUs at April 29, 2023	767,467	$	8.90
Granted	12,733	$	4.28
Vested	—	$	—
Forfeited	(52,144)	$	8.50
Outstanding TSR PSUs and SVCA PSUs at July 29, 2023	728,056	$	8.66

SEC Form 10-Q filed by Big Lots Inc.