As an off-pricer open in the COVID-19 pandemic due to its assortment of food, cleaning products and other essential products, Big Lots saw strong results in the second quarter and an increase in new customers trying out its stores.
The company posted net income of $452 million, or $11.29 per diluted share, versus $6.2 million, or 16 cents per diluted share, in the year-before quarter. Adjusted for one-time events, net income was $110.1 million, or $2.75 per diluted share, versus $20.6 million, or 53 cents per diluted share, in the quarter a year previous.
The 2020 quarter included a one-time, after-tax benefit of $341.9 million, or $8.54 per diluted share, associated with the distribution centers sold as part of a previously announced sale/leaseback transaction. Adjusted net income also included about $10 million of additional store, distribution center, and corporate bonus expenses that were not considered in the company guidance offered earlier in the year.
Big Lots posted net sales of $1.64 billion, up 31.3% versus the 2019 quarter, with the growth resulting from a 31.3% year over year increase in comparable sales, and revenues from new and relocated non-comp locations, offset by a slightly lower store count year-over-year. Operating profit was $608.6 million versus $13.2 million in the quarter a year earlier, while adjusted operating profit increased to $149.5 million from $32.6 million.
Bruce Thorn, Big Lots president and CEO, said, “I am delighted with our record-breaking results in Q2. Our comp increase was the best in the company’s history, and adjusted EPS was the most we’ve reported in a second quarter, and more than five times what we reported a year ago. Comp sales were driven by strong results both in-store, where traffic and basket were each up double digits, and online, which drove almost five comp points, and where we acquired more new customers than in any prior quarter. The results in Q2 were made possible by exceptional teamwork across the entire organization, and I want to thank our associates in our stores, the distribution centers, and our corporate headquarters for their dedication, compassion and tireless efforts. Throughout, we have maintained our commitment to serving our customers and our communities in as safe and healthy environment as possible.”
In terms of the third quarter, Thorn said Big Lots “is off to a strong start, and I am confident that our Operation North Star strategies will continue to drive top line growth, increase customer engagement and deliver tremendous leverage in our business. With our assortment of everyday essentials and stay-at-home products, we are well positioned for what appears to be a new normal. Our balanced offering of thoughtfully curated merchandise, neverouts and closeouts, differentiates us from the competition and continues to surprise and delight our customers with tremendous value. Our operating results under Operation North Star, along with our commitment to disciplined capital management, position us to continue driving significant shareholder value.”