Company Withdraws First Quarter and Fiscal Year Guidance
COLUMBUS, Ohio, March 30, 2020 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today provided an additional business update on the impact of escalating developments related to COVID-19.
Although the company has recently experienced demand volatility, strong sales in March for essential items such as food and consumables has resulted in positive low single digit comps quarter-to-date. During March, the company incurred unplanned expenses related to COVID-19, including temporary store and distribution center wage increases, additional store cleaning costs, as well as other items, and expects to incur additional unplanned expenses over the balance of the quarter.
Considering the health and safety of customers and associates, the company recently added curbside pickup and encourages early shopping for those most vulnerable to the coronavirus. To avoid potential store over-crowding, it also cancelled the planned chainwide in-store "Friends and Family" weekend event in April, which will have an adverse impact on first quarter sales. The company is deploying additional promotions to offset some of this impact.
Given the lack of business visibility related to these factors, the company is withdrawing its first quarter and full year guidance issued on February 27, 2020. It expects to resume the practice of providing an annual outlook when business conditions return to a more normal environment.
The company believes its current liquidity position is strong, with net revolver utilization (gross amounts drawn on the company's revolving credit facility less cash on hand) running approximately $150 million below the equivalent point last year. However, related to the developing COVID-19 situation, the company is taking a number of actions to preserve liquidity through the coming months. These include reviewing potential sources of additional external financing, further reductions in planned capital expenditures including a decrease in Store of the Future conversions to approximately 20 stores, reductions and deferrals of planned store openings, and other reductions. In addition, the company is taking further actions to reduce operating expenses, and adjusting inventory receipts to react to changing sales trends.
Commenting on today's announcement, Bruce Thorn, President and CEO of Big Lots stated, "As a provider of everyday essentials, Big Lots remains open for business. We are committed to serving our customers and communities through these challenging times, while ensuring we do everything possible to protect the health and safety of our associates and customers. While normal business operations are continuing, we are also taking appropriate measures to ensure we are able to navigate through what will likely remain an uncertain environment. I am very impressed with the speed at which our teams are adapting to these unprecedented circumstances, and I want to thank them all for their unwavering dedication to servicing our customers and supporting our communities. We will continue to react and respond appropriately to the evolving situation, and take the necessary steps to protect our associates, customers, and business."
About Big Lots, Inc.
Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is a discount retailer operating 1,404 BIG LOTS stores in 47 states with product assortments in the merchandise categories of Furniture, Seasonal, Soft Home, Food, Consumables, Hard Home, and Electronics, Toys & Accessories. The company's mission is to help people Live BIG and Save Lots. The company strives to be the BIG difference for a better life by delivering unmatched value to customers through surprise and delight, being a "best places to work" culture for associates, rewarding shareholders with consistent growth and top tier returns, and doing good in communities as the company does well. For more information about the company, visit www.biglots.com.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words "anticipate," "estimate," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "outlook" and similar expressions generally identify forward-looking statements. Similarly, descriptions of objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are and will be based upon management's then-current views and assumptions regarding future events and operating performance and are applicable only as of the dates of such statements. Although the company believes the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect business, financial condition, results of operations or liquidity.
Forward-looking statements that the company makes herein and in other reports and releases are not guarantees of future performance and actual results may differ materially from those discussed in such forward-looking statements as a result of various factors, including, but not limited to, current economic and credit conditions, the cost of goods, the inability to successfully execute strategic initiatives, competitive pressures, economic pressures on customers and the company, the availability of brand name closeout merchandise, trade restrictions, freight costs, the risks discussed in the Risk Factors section of the company's most recent Annual Report on Form 10-K, and other factors discussed from time to time in other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This release should be read in conjunction with such filings, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forward-looking statements.
You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures the company makes on related subjects in public announcements and SEC filings.
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SOURCE Big Lots, Inc.