COLUMBUS, Ohio – Big Lots Inc. reported an increase in third quarter net sales but had a decrease in net income for the quarter ended Oct. 31.
Net sales totaled $1.38 billion, up 18% from the $1.17 billion reported for the same period last year. The company said this growth was due to a 17.8% increase in comparable store sales as well as sales growth from new and relocated non-comp stores and offset by a slightly lower store count year-over-year.
Net income totaled $29.9 million, or 76 cents per diluted share, compared with $127 million, or $3.25 per diluted ,for the same period last year.
Last year’s income figures included a one-time, after-tax benefit of $136.6 million, or $3.49 per diluted share, associated with the sale of the company’s distribution center in Rancho Cucamonga, Calif., and an after-tax expense of $2.6 million, or 7 cents per diluted share, associated with the implementation of the company’s strategic business transformation. Without these items, the company said, it would have had an adjusted net loss of $7 million, or 18 cents per diluted share, in the third quarter of fiscal 2019.
“I am delighted to report another record-breaking quarter of results,” said Bruce Thorn, president and CEO. “We registered our strongest ever third quarter sales comp and, by way of continued strategic management of our business and tight control of expenses, we delivered our highest ever adjusted EPS in a third quarter.”
He added that during the quarter, the company also continued the rollout of its Operation North Star strategies, which included the re-configuration of its Food and Consumables categories and expanding its online merchandising assortment through the implementation of ship-from-store.
“These initiatives built on the success of other North Star-driven strategies, including the rollout of the Broyhill brand, the launch of our Lot and Queue Line programs across 750 stores, and the rapid scaling of our e-commerce capabilities,” Thorn noted. “With our steadfast focus on customer service, our strongly aligned assortment of everyday essentials and stay-at-home products, and our growing customer file, we believe we are well-positioned to navigate through and beyond the current environment.
“Finally, this year’s holiday season is certainly unique, and our strategic decision to plan for early holiday shopping has paid off. Although we expect business to moderate given the elongated season, we are pleased with the strong start we have made to the fourth quarter.”
The company said that it reduced inventory by about 3% during the quarter, from $1.117 billion to $1.089 billion. It said this was due to strong sales in all merchandise categories, including on-hand merchandise. Its in-transit inventory was “substantially higher year-over-year as we accelerated receipts ahead of the holiday season.”
The company said it also ended the third quarter with $548 million in cash and cash equivalents and $39 million in long-term debt. This compared with $62 million in cash and cash equivalents and $501 million in long-term debt at the end of the third quarter of fiscal 2019.