Big Lots Inc. reported better-than-expected sales and earnings for its first quarter despite “significant supply chain and freight headwinds.”
Net income totaled $94.6 million, or $2.62 a share, for the quarter ended May 1, up from $49.3 million, or $1.26 a share, posted in the year-ago period. Analysts had expected earnings per share of $1.72.
Sales rose 13% to $1.626 billion, ahead of analysts' expectations for $1.544 billion. Online sales grew 30%, and same-store sales increased 13%.
Big Lots had double-digit growth across all merchandise categories other than food and consumables, which got a big boost last year by stock-up spending early in the pandemic. It also saw strength in its seasonal assortment, particularly lawn & garden, while its Broyhill furniture brand drove $225 million in quarterly sales across furniture and home assortments, “continuing its rapid progress toward becoming an established $1 billion brand,” the company said. (Big Lots bought the Broyhill brand and related trademarks in 2019.)
The company is putting dedicated furniture teams into a number of stores to grow business by having an associate on the floor all day.
“We are also testing putting more furniture inventory in some of those stores," CFO Jonathan Ramsden said on the company's earnings call. "That is a pilot program running currently and will expand in 2022.”
Also on the call, CEO Bruce Thorn said the retailer expects to open from 50 to 60 stores in 2021 while also closing some underperforming locations, for a new new store increase of 21.
“Our outstanding results for the quarter were achieved despite significant supply chain and freight headwinds, which we expect to continue through the balance of the year,” stated Bruce Thorn. “Meanwhile, we are taking other important steps to strengthen our business. These include rolling out our forward distribution center strategy to relieve pressure at our regional distribution centers and more efficiently process bulk items such as furniture.”
Other initiatives include strengthening vendor partnerships to create even greater value for customers and improve assortment availability and investing in data-driven space planning technology designed to enhance customer satisfaction and per-store productivity through more relevant location-based assortment.
The company is not offering full-year guidance due to the uncertainty caused by the pandemic, but said it expects second-quarter earnings per share to range from $1.00 to $1.15.
Headquartered in Columbus, Ohio, Big Lots operates 1,414 stores in 47 states.