US retailer Big Lots posts net sales of $1.3 bn in Q3 FY21

“We are pleased to have delivered the quarter in line with our guidance, and to have sustained double-digit two-year comps despite supply chain challenges and the expiration of stimulus benefits. Our absolute focus coming into Q4 has been to position ourselves appropriately with inventory and deliver an excellent Holiday for our customers, and our fourth quarter is off to a strong start with November comps up 10 per cent on a two-year basis, including record Thanksgiving and Black Friday week sales. Supply chain challenges will continue in the near-term, but we are aggressively managing through them by partnering closely with our manufacturing and transportation partners, strategically prioritising receipts, creating new capacity with our forward distribution centers and DC by-pass programme, and ensuring we are competitive in recruiting and retaining DC associates. In addition, we have taken pricing actions and will continue to do so in response to volatile supply chain costs, while continuing to deliver great value for our customers,” Bruce Thorn, president and chief executive officer of Big Lots, said in a press release.

“Looking forward, we expect to post a new record sales year in 2022, and we have ever-increasing confidence that our key growth drivers under Operation North Star – materially growing merchandise productivity, accelerating new store growth, and continuing to ramp up our ecommerce capabilities – represent a huge white space opportunity for us. In addition, we expect to see gross margin expansion in 2022 driven by promotional and pricing optimisation, the deployment of new planning capabilities, and favourable mix effects. As we look towards closing out 2021 and beginning a new year, we are primed, pumped and laser focused on being the best destination home discount store,” Thorn added.

The company ended the third quarter of fiscal 2021 with inventory level at $1,277 million  compared to $1,089 million for the same period last year. It has increased 17 per cent because of lapping of atypically low inventory levels at the end of the third quarter of fiscal 2020, planned inventory builds to support key growth categories and elevated inventory costs. It also had $71 million of cash and cash equivalents and no long-term debt by the end of third quarter.

In its outlook for the fourth quarter, the company expects to report diluted earnings per share in the range of $2.05 to $2.20, based on a slightly positive comparable sales increase, which equates to a high single digit two-year comparable sales increase. For the full year, it expects a negative low single digit decrease in comparable sales, equating to a double-digit positive comparable sales increase on a two-year basis. The impact of freight headwinds for the full year is expected to result in a 120-basis point decline in full year gross margin compared to last year. Reflecting the above, the company expects full year diluted earnings per share in the range of $5.70 to $5.85.

Fibre2Fashion News Desk (DD)