Big Lots hit hard by sudden collapse of major vendor

Columbus, Ohio — The sudden closure of United Furniture Inds., parent company of Lane, adversely affected Big Lots in the fourth quarter of 2022, the company said in its latest earnings report.

The national discount retailer noted that comparable sales in the quarter fell 13%, which it chalked up to “approximately 130 basis points due to product shortages in furniture, resulting from the unexpected closure of our largest vendor in November.”

“Even though our furniture business was adversely impacted by the unexpected closure of our largest vendor, we were able to deliver fourth-quarter sales and gross margins that were in line with guidance,” said Bruce Thorn, president and CEO. “Further, our year-over-year inventories came down materially to appropriate levels. We also saw favorability in SG&A, as we tightly managed costs, and have further strengthened our balance sheet through asset monetization efforts.

“I remain impressed by the agility and efforts of the team, who once again delivered on our targets under challenging conditions.”

For the quarter ended Jan. 28, Big Lots reported net sales of $1.543 billion, down 10.9% from $1.732 billion in the same quarter of FY2021. It posted a net loss of $12.463 million in the quarter, or 43 cents per diluted share, compared with net income of $49.838 million, or $1.63 per share a year ago.

Big Lots tallied net sales of $5.468 billion for the 52 weeks of fiscal 2022, compared with FY2021’s $6.151 billion, a difference of 11.1%. It reported a net loss of $210.7 million, or a decline of $7.30 per diluted share, for the year.

Excluding the net charge for store asset impairments and a gain on the sale of real estate and related expenses, the adjusted net loss was $171.9 million, or $5.96 per diluted share. Comparatively, FY2021 ended with net income of $177.78 million, or a gain of $5.33 per share.

“As we enter 2023, we remain excited about the opportunity to provide more value to our customers, while improving our sales and earnings momentum as the year progresses. We continue to accelerate the transformation of our business through key action points,” Thorn said. “These include offering even more compelling opening price points and better bargains and treasures, which are easier to find and more convenient to shop.

“In addition, we will continue to take strides to meet our customer’s needs, grow our relevance and be more efficient across our fleet. We remain focused on growing margin, reducing expenses and making highly disciplined investment decisions.”

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