Big Lots

Sector: Food, drug and mass retailers Country of operation: US Key product categories: Apparel, food and beverage, general merchandise, and health and beauty Annual Metrics [caption id="attachment_150436" align="aligncenter" width="700"] Fiscal year ends close to January 31 of the following calendar year
*Trailing 12 months ended April 30, 2022[/caption]   Summary Headquartered in Columbus, Ohio, Big Lots is a variety discount retailer that offers a wide range of merchandise including apparel, automotive, consumables, food, furniture, health and beauty, and home decor products. The company was incorporated in 1986 and was known as Consolidated Stores Corporation until it adopted its current name in May 2001. As of April 30, 2022, the company operates a total of 1,432 stores and an e-commerce platform. Company Analysis Coresight Research insight: During the pandemic, Big Lots saw a sales boost as consumers, forced to spend more time indoors, chose to invest more in their homes. Big Lots was well-placed to benefit as its product assortment includes home decor, home-maintenance equipment, home office furniture and indoor and outdoor furniture. However, in fiscal 2021 (ended on January 31, 2022), the company was negatively impacted by the long-lasting effects of the pandemic. Supply-chain interruptions and the Omicron variant helped reduce its revenues by 3% to $1.73 billion for the fourth quarter of 2021, year over year, while comparable sales fell by 2.3%. For fiscal 2021, net income and comparable sales fell 0.8% and 13.2% year over year. Big Lots continues to suffer from supply chain disruptions, cost increases and the tapering off of stimulus packages. Into the remainder of 2022, the company will likely continue to hold excess inventory, with the aforementioned challenges unsolved.

Tailwinds

Headwinds

Favorable customer response to strategic initiatives developed in fiscal 2021, such as The Lot, Queue Line and Pantry Optimization Increased spending on home-related products due to pandemic-driven trends Strong private-label offerings, including the home-focused Broyhill brand Elevated social media engagement to attract younger demographic Customers drawn to Big Lots through trading down, with potential for high retention rates Opportunities for sustained expansion in international markets Opportunities to bolster and expand e-commerce capabilities

Higher focus on store expansion and price cuts weighing on margins Intense competition from other discounters and retail formats, including department stores, drugstores, Internet retailers, mass retailers and warehouse clubs Continuing supply chain and freight disruptions

  Strategy In 2019, Big Lots outlined its “Operation North Star” plan for strategic transformation. The initiative is ongoing as of March 2022 and consists of three areas: 1. Drive profitable long-term growth

• Strengthen home offerings, including furniture, seasonal and soft home merchandise
• Grow store traffic through various traffic driver initiatives
• Continue responsible investment in the “Store of the Future” growth platform and other store presentation initiatives to improve the store experience.
• Grow physical store footprint
• Grow e-commerce sales, including BOPIS offerings
• Focus on middle-class price-sensitive consumers

2. Fund the journey

• Optimize corporate headquarters and field teams to streamline its leadership structure, reduce overhead costs and align resources with Operation North Star objectives
• Restructure store management to better serve shoppers and optimize overall payroll hours
• Analyze purchasing habits and vendor agreements for retail merchandise and other goods and services to maximizing buying power

3. Create long-term shareholder value

• Deliver value to shareholders by effectively executing the first two objectives of Operation North Star—this step is the culmination of the strategic plan

Revenue Breakdown (FY21) Company Developments

Date	Development
April 12, 2022	Big Lots announces plans to open a new store in Thomson, Georgia by the summer.
September 22, 2021	Big Lots enters into a $600 million five-year unsecured credit facility.
July 13, 2021	Big Lots announces the appointment of Gurmeet Singh as Executive Vice President, Chief Technology Officer of Big Lots, effective July 12, 2021.
June 22, 2021	Big Lots rolls out a newly expanded apparel assortment aimed at the whole family—the company’s biggest to date—available in stores nationwide and online at BigLots.com.
May 24, 2021	Big Lots announces a new brand campaign, “Be A BIGionaire,” featuring actor and comedian Retta, known for roles on TV shows Good Girls and Parks and Recreation.
May 10, 2021	Big Lots partners with the National Veterans Memorial and Museum (NVMM) in Columbus, Ohio, for the second year in a row, to support and impact the lives of veterans and their families.
November 10, 2020	Big Lots is named number one in Total Retail’s 2020 “Top Omnichannel Retailers Report.” The company is recognized for its omnichannel capabilities, including recent customer service innovations in both brick-and-mortar stores and online.
November 2, 2020	Big Lots announces the introduction of a year-round 10% discount for active military personnel and veterans who are members of the company’s Big Rewards program.
July 30, 2020	Big Lots partners with logistics provider PICKUP to roll out same-day delivery across 1,100 Big Lots stores.
July 20, 2020	Big Lots appoints Jack Anthony Pestello as Chief Merchandising Officer, effective July 27, 2020.
June 8, 2020	Big Lots partners with Instacart to offer same-day delivery from nearly 1,400 stores.
November 1, 2019	Big Lots announces the completion of the sale of its distribution center in Rancho Cucamonga, California.

  Management Team

• Bruce K. Thorn—President and CEO
• Jonathan E. Ramsden—Chief Financial and Administrative Officer
• Gurmeet Singh—Executive Vice President, Chief Technical Officer
• Ronald A. Robins Jr.—Chief Legal & Governance Officer

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Source: Company reports