Big Lots Q4 mixed; accelerating store openings
Big Lots reported a fourth-quarter profit that beat analysts’ expectations and provided an upbeat outlook for the first quarter.
The discounter, which ended the year with 1,410 stores, also said it would accelerate new store openings in 2021 and continue to scale its enhanced e-commerce capabilities. It will open 50 to 60 stores this year.
"We expect to accelerate net store count growth in 2021 and more significantly beyond and continue to believe that unit growth can be a major driver of our performance," Big Lots CEO Bruce Thorne said on the company's earnings call. "Our priority this year is to return to healthy store count growth. We were slightly positive for the last two years, but we want to accelerate. We do think there are a lot of interesting opportunities going forward."
The retailer also plans to update the customer experience in its stores. Starting in 2021 and extending during the next few years, Big Lots said it will invest in a store refresh program, encompassing new exterior signage, internal repainting and updated floors and bathrooms.
Net income rose to $98.0 million, or $2.59 a share, in the quarter ended Jan.30, from $93.8 million, or $2.39 a share, in the year-ago period. Analysts had predicted earnings per share of $2.50.
Net sales rose 8.1% to $1.74 billion, in line with estimates. Same-store sales increased 7.9%.
"I am pleased to report that our fiscal fourth quarter ended strongly, with a record fourth quarter comparable sales increase despite softer than planned traffic in December and inventory and supply chain challenges during the quarter,” stated Thorne. “We also delivered another stellar quarter of growth across our e-commerce and omnichannel platforms with sales increasing over 130%. Throughout the quarter, our strategic investments and the nimbleness of our teams allowed us to serve our customers better than ever, as well as adjust to market dynamics to deliver excellent top-line and bottom-line results."
For the full year, Big Lots sales rose 16.5% to $6.2 billion. It earned $629.2 million, or $16.11 per share. Excluding the sale of its distribution centers, the company would have earned $287.3 million, or $7.35 per share, about double what it earned the prior year.
For the first quarter, the company expects earnings per share of $1.30 to $1.45, and same-store sales to increase in the low single-digit percentage range.