QUARTERLY
RESULTS
PRESENTATION
First Quarter 2024
Q1 | 2024 | 2
FORWARD-LOOKING STATEMENTS
Certain statements in this presentation are
forward-looking statements within the meaning
of the Private Securities Litigation Reform Act
of 1995, and such statements are intended to
qualify for the protection of the safe harbor
provided by the Act. The words “anticipate,”
“estimate,” “continue,” “could,” “approximate,”
“expect,” “objective,” “goal,” “project,” “intend,”
“plan,” “believe,” “will,” “should,” “may,” “target,”
“forecast,” “guidance,” “outlook,” and similar
expressions generally identify forward-looking
statements. Similarly, descriptions of our
objectives, strategies, plans, goals or targets
are also forward-looking statements. Forward-
looking statements relate to the expectations
of management as to future occurrences and
trends, including statements expressing
optimism or pessimism about future operating
results or events and projected sales, earnings,
capital expenditures and business strategy.
Forward-looking statements are based upon a
number of assumptions concerning future
conditions that may ultimately prove to be
inaccurate. Forward-looking statements are
and will be based upon management’s then-
current views and assumptions regarding
future events and operating performance, and
are applicable only as of the dates of such
statements. Although we believe the
expectations expressed in forward-looking
statements are based on reasonable
assumptions within the bounds of our
knowledge, forward-looking statements, by
their nature, involve risks, uncertainties and
other factors, any one or a combination of
which could materially affect our business,
financial condition, results of operations or
liquidity.
Forward-looking statements that we make
herein and in other reports and releases are
not guarantees of future performance and
actual results may differ materially from those
discussed in such forward-looking statements
as a result of various factors, including, but
not limited to, the current economic and credit
conditions, inflation, the cost of goods, our
inability to successfully execute strategic
initiatives, competitive pressures, economic
pressures on our customers and us, the
availability of brand name closeout
merchandise, trade restrictions, freight costs,
the risks discussed in the Risk Factors section
of our most recent Annual Report on Form
10-K, and other factors discussed from time
to time in our other filings with the SEC,
including Quarterly Reports on Form 10-Q and
Current Reports on Form 8-K. This
presentation should be read in conjunction
with such filings, and you should consider all
of these risks, uncertainties and other factors
carefully in evaluating forward-looking
statements.
You are cautioned not to place undue reliance
on forward-looking statements, which speak
only as of the date they are made. We
undertake no obligation to publicly update
forward-looking statements, whether as a
result of new information, future events or
otherwise. You are advised, however, to consult
any further disclosures we make on related
subjects in our public announcements
and SEC filings.
Q1 | 2024 | 3
CEO COMMENT
While we made substantial progress on improving our business operations in Q1, we missed our sales goals
due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket
discretionary items. We remain focused on managing through the current economic cycle by controlling the
controllables. As we move forward, we’re taking aggressive actions to drive positive comp sales growth in
the latter part of the year and into 2025, and to maintain year-over-year gross margin rate improvements,
all driven by progress on our five key actions.
Our operational initiatives to offer a larger assortment of new and exciting extreme bargains, cut costs,
and increase productivity exceeded our targets in Q1. This enabled us to improve consumer perceptions
about our brand and the value we offer, and to deliver a year-over-year improvement in gross margin and
operating expenses, despite significant sales pressure.
Meanwhile, we are pleased with our actions to preserve and enhance liquidity in Q1, which included
aggressive efforts to manage opex, capex and inventory, and the execution of a new $200 million term
loan facility, which provides us with significant additional financial flexibility.
While near-term conditions have been challenging, we’re not slowing down on making progress to
transform our business. The current financial performance does not yet reflect the stronger business
model that we’ve created through our five key actions, but we expect the fruits of those efforts to become
more apparent in the back half of the year.
Bruce Thorn, President & CEO
FIRST
QUARTER
RESULTS
First Quarter 2024
Q1 | 2024 | 5
BIG LOTS AT A GLANCE
Strong Omnichannel
Capabilities
Diversified Category
Mix
National Store
Footprint
1,390 Stores in 48 States Industry-leading delivery options, easy
checkout, and multiple payment types
to win customers for life
29%
14%
15%
17%
16%
9%
Furniture Food
Soft Home Consumables
Seasonal Hard Home
Chart based on Q1 2024 sales
Q1 | 2024 | 6
FIRST QUARTER SUMMARY
Impacted by challenging
consumer environment
Up 190bps vs. LY
-12.7%
Inventory vs. LY
In line with guidance,
continued turn
improvement
-3.6%
Adjusted
operating
expense
1
vs. LY
Ahead of guidance
-9.9%
Comps
36.8%
Gross margin
1
Adjusted Operating Expenses are comprised of adjusted Selling and Administrative Expenses, adjusted Depreciation Expense, and adjusted Gain on Sale
of Real Estate. Adjusted results are non-GAAP financial measures. A reconciliation of reported GAAP results to the adjusted non-GAAP results is
included in the appendix.
Q1 | 2024 | 7
Q1 2024 COMP SALES BY CATEGORY
-16%
-14%
-12%
-10%
-8%
-6%
-4%
-2%
0%
Seasonal Hard Home Soft Home Food Consumab les Furniture Total
-15%
-14%
-11%
-10%
-8%
-6%
-10%
Comp Sales Impacted by Soft Consumer Environment
Note: In the Q4 2023, we realigned our merchandise categories and eliminated our Apparel, Electronics, & Other merchandise category. We have reallocated the departments
that previously comprised Apparel, Electronics, & Other into the following merchandise categories: Hard Home, Soft Home, Consumables, and Food.
Q1 | 2024 | 8
YEAR-OVER-YEAR INVENTORY REDUCTION
Inventory Managed Down More than Q1 Sales
-18.8%
-15.2%
-12.5%
-17.0%
-12.7%
Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024
Q1 | 2024 | 9
ADJUSTED Q1 2024 INCOME STATEMENT
Q1 2024 Q1 2023 Change vs. 2023
Net Sales
$1,009,112 $1,123,477 (10.2%)
Gross Margin
371,699 392,469
Gross Margin Rate
36.8% 34.9% 190 bps
Adjusted Operating Expenses
(1)(2)
491,848 510,455
Adjusted Operating Expense Rate
(2)
48.7% 45.4% 330 bps
Adjusted Operating Profit (Loss)
(2)
($120,149) ($117,986)
Adjusted Operating Profit (Loss) Rate
(2)
(11.9%) (10.5%) (140 bps)
Adjusted Diluted (Loss) Earnings Per Share
(2)
($4.51) ($3.40)
Diluted Weighted Average Shares
29,350 29,018
(In thousands, except for earnings per share)
(1) Adjusted Operating Expenses are comprised of adjusted Selling and Administrative Expenses, adjusted Depreciation Expense, and adjusted Gain on Sale of Real Estate.
(2) Adjusted 2024 and 2023 results are non-GAAP financial measures. A reconciliation of reported GAAP results to the adjusted non-GAAP results is included in the appendix.
Q1 | 2024 | 10
CAPITAL ALLOCATION
*Net liquidity is defined as ABL Credit Facility availability and FILO Term Loan availability, net of covenant-based borrowing limitations, plus Cash and
Cash Equivalents.
~$60M
FY2024 CAPEX
Guidance
$900M
ABL Credit Facility
Increased Borrowing
Capacity by Up to
$200M
In line with or somewhat
below FY 2023 spend
Through new FILO term loan
facility in April
Net liquidity of
~$289M* at end of Q1
GUIDANCE
Second Quarter 2024
Q1 | 2024 | 12
Q2 2024 GUIDANCE
SG&A
REDUCTION
COMP SALES
GROSS MARGIN
IMPROVEMENT
Down low to mid-single-digit
range, inclusive of
sale/leaseback expense
Significant improvement versus
last year, up by at least 300
basis points
Down mid to high-single-
digit range; sequential
improvement
Q1 | 2024 | 13
5 KEY ACTIONS
Q1 | 2024 | 14
PROJECT SPRINGBOARD
Raising cumulative run rate
target to $185M (vs.
~$175M previously) by
end of 2024
~40%
of savings in
other gross
margin items
Inventory optimization,
marketing, pricing &
promotions
~20%
of savings
in SG&A
Store & field operations,
supply chain, general
office
$200M+
Bottom-line
opportunities
~40%
of savings
in COGS
WRAP-UP
Q1 | 2024 | 16
Q1 WRAP UP
• Comparable sales decline of 9.9% in Q1, impacted by challenging consumer environment; GAAP EPS of -$6.99, with adjusted EPS
loss of -$4.51 due to year-over-year sales decline and continued cost pressures
• Successfully reduced inventory, down more than sales
• Comps expected to improve sequentially in Q2; focused on unlocking additional sales opportunities (e.g., more bargains and extreme
bargains, exciting assortment, clearer value communication)
• Expect significant gross margin improvement through the year, driven by reduced markdown activity and benefits from Project
Springboard efforts
• Continue advancing five key actions to drive improvements through 2024, with a path to positive comparable sales by end of year
• Project Springboard on track to deliver bottom-line opportunity of $200M+ in gross margin/SG&A; expect to be at $185M by the
end of 2024
• Enhanced liquidity through new $200M FILO Term Loan
• Despite challenging conditions, will continue making progress to transform the business through our five key actions
APPENDIX
Q1 | 2024 | 18
FIRST QUARTER 2024 GAAP TO NON-GAAP RECONCILIATION
($ in thousands, except for earnings per share)
The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating loss, adjusted operating loss rate, adjusted income tax
expense (benefit), adjusted effective income tax rate, adjusted net loss, and adjusted diluted earnings (loss) per share are “non-GAAP financial measures” as that term is defined
by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly
comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) FDC closing costs
and related expenses of $874, store asset impairment charges of $68,245, and fees related to a cost reduction and productivity initiative which we refer to as “Project
Springboard” of $3,588.
As Reported
Adjustment to exclude
forward distribution center
("FDC") closing costs and
related expenses
Adjustment to
exclude store asset
impairment charges
Adjustment to
exclude fees
related to a cost
reduction and
productivity
initiative
Selling and administrative expenses
533,004$ (874)$ (68,245)$ (3,588)$ 460,297$
Selling and administrative expense rate
52.8% (0.1%) (6.8%) (0.4%) 45.6%
Operating loss
(192,856) 874 68,245 3,588 (120,149)
Operating loss rate
(19.1%) 0.1% 6.8% 0.4% (11.9%)
Income tax expense (benefit)
191 - - - 191
Effective income tax rate
(0.1%) - - - (0.1%)
Net loss
(205,035) 874 68,245 3,588 (132,328)
Diluted earnings (loss) per share
(6.99)$ 0.03$ 2.33$ 0.12$ (4.51)$
Q1 | 2024 | 19
FIRST QUARTER 2023 GAAP TO NON-GAAP RECONCILIATION
($ in thousands, except for earnings per share)
The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted depreciation expense, adjusted depreciation expense rate, adjusted gain on sale of real estate, adjusted
gain on sale of real estate rate, adjusted operating loss, adjusted operating loss rate, adjusted income tax expense (benefit), adjusted effective income tax rate, adjusted net loss, and adjusted diluted earnings (loss)
per share are “non-GAAP financial measures” as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude
from the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”) synthetic lease exit costs and
related expenses of $53,567 ($39,754, net of tax), FDC contract termination costs and related expenses of $9,617 ($7,137, net of tax), store asset impairment charges of $83,808 ($63,365, net of tax), and a
gain on sale of real estate and related expenses of $3,799 ($2,900, net of tax).
Our management believes that the disclosure of these non-GAAP financial measures provides useful information to investors because the non-GAAP financial measures present an alternative and more relevant method
for measuring our operating performance, excluding special items included in the most directly comparable GAAP financial measures, that management believes is more indicative of our on-going operating results and
financial condition. Our management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance.
As Reported
Adjustment to
exclude synthetic
lease exit costs and
related expenses
Adjustment to exclude
forward distribution center
("FDC") contract termination
costs and related expenses
Adjustment to
exclude store asset
impairment charges
Adjustment to
exclude gain on sale
of real estate and
related expenses
As Adjusted
(non-GAAP)
Selling and administrative expenses
620,865$ (53,567)$ (8,624)$ (83,808)$ -$ 474,866$
Selling and administrative expense rate
55.3% (4.8%) (0.8%) (7.5%) - 42.3%
Depreciation expense
36,582 - (993) - - 35,589
Depreciation expense rate
3.3% - (0.1%) - - 3.2%
Gain on sale of real estate
(3,799) - - - 3,799 -
Gain on sale of real estate rate
(0.3%) - - - 0.3% -
Operating loss
(261,179) 53,567 9,617 83,808 (3,799) (117,986)
Operating loss rate
(23.2%) 4.8% 0.9% 7.5% (0.3%) (10.5%)
Income tax expense (benefit)
(64,250) 13,813 2,480 20,443 (899) (28,413)
Effective income tax rate
23.8% (0.6%) (0.1%) (0.9%) 0.1% 22.3%
Net loss
(206,073) 39,754 7,137 63,365 (2,900) (98,717)
Diluted earnings (loss) per share
(7.10)$ 1.37$ 0.25$ 2.18$ (0.10)$ (3.40)$