Big Lots expects q/q gross margin improvements to continue in 2024

Bruce Thorn, President and CEO of Big Lots stated, “We expect quarterly year over year gross margin improvements to continue in 2024, and see a path to positive comparable sales as the year progresses. Further, we expect to realize most of the $200 million+ of bottom-line opportunities through Project Springboard. We also expect to significantly grow our bargains penetration to 75% of our sales, and within that, have an expanded assortment of extreme bargains. These extreme bargains create a more exciting treasure hunt experience, which will keep our customers coming back to our stores and help drive comparable sales growth. By leaning in further on our heritage of providing unmistakable value to consumers, we will solidify our position as America’s Discount Home Store. Our efforts to aggressively manage costs, inventory, and capital expenditures, as well as monetize owned assets, have enabled us to maintain liquidity through a challenging period. We took out over $140 million of SG&A during the year, cut capex by almost 60% year over year, reduced inventory by nearly $200 million, and monetized assets worth over $300 million. Our net liquidity at the end of the fourth quarter was $254 million, and we generated significant free cash flow in the fourth quarter, enabling us to reduce our ABL balance. As we look into 2024, we continue to evaluate additional financing options as a normal part of prudently managing our business. While near-term conditions may remain challenging, we look forward to returning the company to health and prosperity, and believe we are taking the right actions to do that. Overall, our five key actions are gaining momentum and have enabled us to again sequentially improve results in the fourth quarter. We are excited to return to comp sales growth as 2024 progresses, driven by continued progress on these key actions, and to significantly improve our gross margin in every quarter versus last year.”