Big Lots (BIGGQ) 28 May 212021 Q1 Earnings call transcript

Ladies and gentlemen, good morning and welcome to the Big Lots First Quarter Conference Call. Currently, all lines are in a listen-only mode. A question-and-answer session will follow the prepared remarks. [Operator Instructions] As a reminder, this conference is being recorded.

On the call today are Bruce Thorn, President and CEO; and Jonathan Ramsden, Executive Vice President, Chief Financial and Administrative Officer.

to the statements like involve the made uncertainties from are in call, that remind risks described company's today's harbor those results that forward-looking safe can SEC any on subject that press starting release company stated statements. filings, to would you and provisions and Before as company's and in actual the forward-looking the materially call differ adjusted commentary also available would out to results, today to is GAAP like on release. in are applicable, company The that non-GAAP focused point non-GAAP press results of reconciliations where adjusted today's will I President call to Lots. and Bruce now Thorn, the turn Big CEO of over Mr. ahead. go please Thorn,

Thank and another morning, completed just outstanding you quarter. everyone. good We

be more as through that we to North second our go knew continue so quarter, comparisons initiatives. the Operation executed we in strength Star underlying to business the strategic core will from be successfully our see going we While they were tough and

of impacted our In beginning topline addition, enhanced positively stellar second were in further in we third gross by inventory stimulus of which the sell-throughs. distributions week March, round the

all $X.XX, result first ever. of and the low diluted digits, comparable share the first sales of strongest quarter our increased single a As our per earnings guidance marking for our XX.X% were versus above, quarter

our five have capabilities, omnichannel demonstrating rolling past we its North As seen demand coordinated initiatives, over how focused, execution. delivering new agility serve quarters, while Star we increasing fulfilling customer the and out improving strategic our dedicated Operation and

store care bonuses our with want this to the and for results could of live to for customer, without XXs your DC that the us We next home have Lots. contributions. and Big quarter. all hourly be performance were for dedication office of in of special take enabled their to the thousands store, our strong opportunity cash this in particularly I And in our associates pleased her None reward save taken helping Our centers distribution them efforts in and teams possible thank and our level. our to

in two past want updates. addressing give I detail, Before to this corporate quarter important

Lots also and an seriously First, to Responsibility Corporate right, by inclusive are that we communities year we doing to very our doing to the Report. of community and publishing win, workplace. first are Annual respecting Big you playing our review sure giving good diverse report. I and role continue we our ensuring began as our environment, We the encourage while website make have equitable visit back and the our Social the members take by

and that We proud of to we the are progress are we forward making the in future. direction taking, more are even looking

working Executive Campos Chief Sandra welcome Vice consumer with Kim enjoy do a thoughtful pushes in of way. specific and Board bring a to and Directors. President Second, of want former Hallmark for to with company Sandra is of sustainable Lots Lots the that spaces. Project driving Diane Officer Big Big Both Cards. better is Officer Sandra Experience I that former, Furstenberg. a von and Consumer Verte sustainable of to I Kim in Newton and growth complete experience Board the Newton wealth to for formally and Executive Chief the focused appreciation our of Kimberley truly a Senior

updating I'd quarter. Now, on first turn like to to our you

by driven but in lawn and all sell-through year last versus strong especially was each basket in of greater-than-expected size performance categories, and month Our the quarter, garden.

Act. our under with accelerated versus Rescue distributions American performance the mid-quarter expectations Our stimulus Plan

categories were year, navigate promotions strength with most sold merchandise anticipated. of levels the are quarter. XX% categories due food a offset and soda Similar two with and and from of significantly inventory and year consumables against major two-year snacks, up of down consumables started to year. All offset more During comp posted driver a paper able last year, declines strong than comp food and areas initially well into related optimization focus in well fewer through, a quarter we shift quickly with each performed the to spending. year's as stock effect to chain much basis. consumables of higher through and and charges. on continue reduction bit to up pleased have optimization the for had and on of versus markdowns more with the appropriate exception on to for is we food, up go Despite the performance This that helped beauty, in key In initiative to to pantry and food past our our performing in-stocks. last the have stock continues and baking room perform away food. Pantry the chemicals we than impact the being for for household we comps last QX, In of improved last the of the supply inventory see quarantine consumables, of health grocery a lapping stronger

vendor as changes and as Star company offering Jennifer. to North home strong XX% office desk and upholstery quarter. for to quarter, XX% continue comps up trend with and part relationships of an create had of XX% of category Sales sales of of with for even the XX% macro branded versus thanks chairs. to Furniture well all increase the departments, to and represented especially a shine are assemble, Operation products furniture sustained total we our total priority as upholstery growth, to mattresses. sales to in In more year. across nearly another strengthen our this addition, growth last In continue ready Thanks value for Broyhill

garden than quarter starting pressures Valentines less with This assortment, to have discount. Easter holidays new in was lawn Even wonderful customers such seasonal to a the highlight product in XX%. includes by with delays, patio our and been prior furniture. chain which Our true driven out outdoor during was and able as years some assortment up and February of and spring in and patio, and macro supply able product were arrival we more sell get comping front

new of delivered around by accent and to continue were accessories. patio branded the penetration increase Closeouts to and apparel. high computer but saw and in membership comps category, and customers rewards waste decorative we sales high kitchen nearly active in comps for rugs We partially grow total, all-time comp our care units, million we in flooring and over in year of strong pillows our in appliances, closeouts and growth rewards million within with was fashion members home our nearly personal On which up nice X fans, growth textiles which in the very cans. ongoing now this more by were year last comps top storage lower tops, Key spent XX% XX% comp, vaccines, home an as year a double-digit key increased strong and garden, category, of and XX% a both by had beverage XX%. areas space driven and this and backings, strengthened comp by productive Kitchen first per with Closeouts charging than year-over-year. and with care, introduction customer. in reached delivered XX% of XX% small graphic organization basis within of experienced innerwear, conjunction included increases offset home textiles small in housewares. We Over in the a expansion is soft such both see to up plastic in performance business continued create and QX tees, branded our last with electronics last quarter value XX% appliances, performance phone trends double-digit XX.X delivered led QX closeouts opportunities rewards robust XX% XX% also and home greater Hard as hydration, baskets of hampers, partly and to accessories driven of to points an Home electronic up floor categories. fueled grow sell-through to and apparel double-digit accessories by our grew membership, enrolled by decorative strong sweatshirts of Home delivering our the strong include X% organization, and members performance have customer. Broyhill with quarter attached televisions. XXX categories, hard women's comps for XXXX. cookware strong even supply Apparel jogger continue in in more lawn sales opportunities. our which rugs Soft sales a across

going She focus including thoughtful new us us, programs. shop to decor brand, campaign on-trend winback see with we our and customers with new brand every attracting furniture love thrilled A Staying surprising is Big marks customers why in BIGionaire continue titled around quality, of hunt and the insights The bargains Lots sees their the consumer to outfitting celebrating the extensive Finally, has homes initial and that Be in treasures. quarter on exceptional for on that rollout this the of we value. retaining exceptional home reactivation grounded are great a high all and as holiday campaign. through to

an Super for bucks, when the style. to Big Lots. someone loves insights Our a shopping neighborhood American her at idea celebrate million who like customer BIGionaire, all came a they of of feels these of is that Out uniqueness their Women deals sense and are

in Retta, because an Lots. made us, years personality encapsulates from and space, I've Los We told and of since. and ago. Girls decked first our I'll Good my apartment off her featuring decor, been campaign Angeles brand, She Parks party for hall never wall And perfect Recreation. I there an she kicking my Big for been at off spirit roles and actor this has with I savvy shopping I best Lots shoppers. for to Why are truly years in is spirit ever she the every in What up lacked this starring known studio kick QX essentials my in Big neighbourhood to hosting comedian still forget reflects shopping from dishes tiny her and years, that and holiday our holiday

community and of to new BIGionaire the inviting and our on celebrating are in ones We fun join savings.

e-comm. to on Moving

businesses. drive have growth and Moreover, investments significant year, and first of in business the garden penetration growth with with continued increases lawn key last traffic demand key growth saw the both in conversion. to continued and e-commerce versus total our XX% in quarter furniture of and continued seasonal Our business

as Instacart initiatives curbside very omnichannel to been and demand drove and purchase, store and store, pickup around same-day fulfillment delivery remove pickup, pickup, our ship such friction from online, successful recent and of buy Our in XX% have fulfillment. with

the of store ship the to our we XXXX, total locations. from holiday. expanding for XX in to Bringing eight capabilities balance time will be For additional

site expand Pay. Google and payment continuing Apple include to Additionally, we are the to choices type on

million we in continue million our XXXX mid in the Our brand. established and Broyhill sales way over its becoming registering We sales outperform remain $XXX after business full-year on $XXX shopping see Well excited to to behavior customers. billion Broyhill that generated Broyhill over launch. return our by QX $X from after spring an up-spend a expectations.

As rolled out we now Lot our I to is the report Line to am frontend and in over pleased to our is the XXXX turn Queue Queue attention Line approximately stores stores. Lot and strategies, X,XXX

strategies. and to incremental a by success, X% assortments lift achieve Queue of combined mid-year. XX% strategy continuing over and this Based stores on are our continue Lot of we Line around We the that footprint the two our current to ensure rollout comp reach from with these

to focus operation of a keen have our we been initiatives. in on our discussed assist our has aspect key to prior North As architecture a calls, expense Star funding

will bringing North our demand. drive savings key supply to million. expense and investments for will are by our to Jonathan have of of These SG&A fund in- $XXX for our to been chain and cross stocks, shortly, frugality. able structural to Operation exceed needed manage strengthening improve growth support XXXX, leverage On in SG&A a our throughput, $XX channel impressed help growth, on-schedule Star continue be savings increase over significant While savings of culture more sales to and under SG&A deliver in we efficiencies, our I top cumulative and our top-line detail discuss million

We making with centers. bulk deployment with progress we are and furniture the our are pleased forward

open of with summer will The which first thereafter. in the second opening late shortly

management In system we transportation continuing new roll TMS. out are to the phase addition, final or of a

adapt past and mode the in new went optimize conditions. quickly we market months, live the in-bound which Over with XX selection modules to procurement

going with We of will and module, are to midst live which stores. for in now expense our optimize the timing outbound delivery

enhance that to program. is in of our priority did stores experience stores, remodel under XXXX go Another the those not a through our customer full the particularly Store Future

new across exterior bathrooms. will Project calling a upgrade experience This a we consistent stores brand our are more This re-painting, interior and quarter, we updated signage, begin our stores. program, will floors Refresh which ensure multi-year program with to and

past and the of of expect a on over We going to few the have been get next in broader stores number couple piloting rollout a weeks months.

to As fleet the important to brand as campaign, rollout we for well. of it's us refresh begin beginning our

store Project Future Importantly will cost lower much prior conversions. than Refresh the come our per Store at of a

continue for even ways in-store We experience. enhance more to to look impactful our

and As in sales a have around on new our of with throughout continued an staffing the been the strength example, assortment, testing model floor given growth sales XX dedicated trained furniture associates we and the day. stores furniture

the double-digit in be stores pilot group of we'll program and expanding seeing lifts few to stores We a these sales are over the larger next months.

closeouts gaming, Growth deals products. business, customer-centric and across well. in into every core of We relevant new These comprised significantly goods apparel, sporting and are with of remain the office our the decor and to in great are merchandise consumables, customer include luggage like demand merchandising expansion on growth the areas Big small opportunities and expanded expanded seasonal day. focused engineered appliance, by excited home in the With driving in buys serving value we store and combined categories source closeouts, pets, deals the accelerate XXXX. potential rollout

As we our focus well. value on customers item responding merchandising key and messaging, are

platform fall. data are live Much discussed or And year, QX be during of launching well late driven been the development go call, beginning are with being new and has background underway. our work planning this with in to is in we to capabilities As the and we realized benefits we completed. looking last space are

our compliance and for As we replenishment will further to curate execution. a using store allocation improve plans planogram tools floor optimize reminder, be per analytical buy and cycles, store optimize

with All to productivity volume enhance count assortment. e-commerce continue of customer store relevant which and initiatives driven growth. and profit we our through per see a Along merchandising will our more from and store operating growth, customer opportunity significant satisfaction

count store store driven XXXX openings, increased program. our growth in XXXX, Our also and be slowing intervention rate will and acceleration net will result a the highly of as expect both of further effective closures in store beyond. This we but accelerate by by

that has continued was QX. the Our strong, strength first quarter and into start of

last initiatives. and period. stimulus first our of at highlight lap on XXXX, will year and look as XXXX Comps look throughout the trend we underlying we of and comps Operation we be versus As performance growth a year will our the will artificially both one referencing two-year deflated basis. North sales the Growth the though Star business versus impact driven reflecting

to the As versus Jonathan but year, up strongly further, expect negative will discuss we second with last versus XXXX. quarter end comps

clear. to significant quarter invest with assortment creation and our manage financial year overall and last be and supply to we expect tough second continue improve to for value We in our our in-stocks, opportunities comparisons shareholder strategic driving our our and as resoundingly the will call intelligently Despite insight to over story results continue chain, the performance Jonathan are more we underlying outlook. further in now, strengthen architecture expense the our on improvements our and I'll the our for confident growth quarter, that turn frugality.

everyone. Thanks, and good Bruce, morning,

very first million in of the income quarter a sales As value basis. together under Bruce for XX% into was compared customer. first ago. March $XX.X higher Diluted payments the comparable was EPS not month was Net teams effectively Net for a $X.XXX working stimulus was of stacked compared resulting billion quarter factored by mix each a consumer billion, Plan strategies very one was from round said, to included a our brought for our million significant single to merchandise of for of our new driven American were increase on in QX categories. growth our the quarter. by driven just strong, the was for both the The low our XX.X%, Comps sales the were which Comps Rescue by toward were in the guidance two-year benefit XXXX. year focusing increase as This the growth Act $XX.X and stimulus. first by strongest driven most digit the all quarter of from our strong basket and creating round recent quarter ticket positive on underlying spending, and $X.XX. $X.XXX shifted strong quarter

significant bonus from we initially with Total margin close basis offsetting $XX quarter of and despite sales the and effects, leaseback the from of for higher were million were expense control headwinds, of in basis a beat, markdowns As -- EPS expenses benefit depreciation last expected distribution some the QX drivers All of of us in flat sales of causing far from of ahead other million, $X.XX year. additional to $X the the the for significant to margin modest with non-cash were reflecting positive the reminder, freight points freight expense. come was points equity Key reported million EPS and significant to last million of up year-over-year. and XXX XXX year. our Both and expenses expenses along sorry centers, slightly expectations. XX ahead XX.X%, last $X.XX increase. additional year, original for quarter comp greater were million of $X.XX, The contraction was enabling expense, of gross $X roughly store $XXX corporate $XXX quarter, including costs sale increase freight than our and last the markdown the reduction gross mix beginning quarter of rate from year's to share repurchases. strong up savings rate first headwinds with of guidance

of the to of centers sale for quarter $X.X versus a from impact the of despite margin All year. A X.X% the record, of leaseback of expense partially last XX.X% of quarter in expense XXXX, last our tax by the above, to headwinds unsecured and on result of million to rate the earlier X.X% interest year. XX.X% paying and to sale-leaseback the first rate first with awards. the impacted Income discrete year's our last offset credit by to related was quarter the our rate Primarily quarter year's of line deferral the year. of first in year's quarter from of impact transactions. balance last notional gain discrete compared operating down in rate Prior associated equity items tax freight an compared was both $X.X the as items, this XX.X% distribution for income drove Interest settlement the million, last was the XX.X%. off us

X% which Moving XX% million and of on about The beginning levels rebuilding turn of look we and XXXX. [ph] much to despite by trend up quarter driven sheet; higher was first a our increase retaining QX inventory total to inventory sales quarter improvement. in-transit lapping of of inventory the to low to $XXX.X down compares the to last Inventories strong was forward inventory while balance the to year. XX% two-year QX, XXXX, guidance XX% typically during close the levels were a higher in two-year further

$XX compared quarter During last million. expense year. with lower expenditures footage million opened the for X same of square first million stores $XX were and million of long-term year. the Depreciation debt. QX, in leaving than ended quarter and quarter Capital XX.X and us and million approximately stores total cash we first last with X,XXX the million equivalents $XXX period new of -- $XX closed the cash $X compared was XX $XX to We million stores, selling

we million as equivalents and XXXX, repurchases per $XXX In part million average our of XXXX. on of million an cost particular, end liquidity. remain of significant $XXX X.X represents share $XX.XX given We improvement important This under repurchased remaining $XXX end announced in quarter authorization. the the net cash As for of over a QX of is excess share Share an forward. strategy the repurchase our cash $XXX There million $XXX million an first million shares previously debt. reminder, cash the our million hand. going capital allocation and approximately of during at of $XX quarter long-term had of

a quarterly XXXX As dividend share. business declared for $X.XX XXXX the This per is of announced on on Directors payable record XX, in June dividend our separate Board to XX, of of quarter common the XXXX. shareholders release, a cash of on close second June of

in to any XXXX. the incorporate we share second achieve the to per per guidance repurchases, an compared diluted range for not The Turning may the $X of second quarter. we does to to in expect share complete earnings diluted of quarter; the share adjusted $X.XX $X.XX quarter second

several year's full the our has at we earnings this are share on past been quarters, not guidance As point. over sales practice or providing per

points last net but sales is up guidance The low-double XX% of reflects second decline from the a comparable The negative against and remodeled based on negative XXX comp digit year we comparisons sales by from a stores. quarter equates tough a stacked new benefit offset are QX around two-year comp. approximately basis to

headwinds approximately second be to benefit gross driven the in from lapping XXXX as impact be impact mix margin the well from from gross macro as pantry sell-throughs. margin outstanding the rate flat. last the Versus our quarter some optimization, expect to to we resulting expect markdown points down freight, in XXX We by rate approximately XXXX year, basis

we call, throughout adverse year. the we continue expect last quarter's in effects to freight As discussed

to basis to basis to the levels points resulting being the full impact XXXX in of rate rate For close year, XXXX. approximately margin points margin we gross modestly expect XXX gross down XXX i.e.

optimization to expenses levels, margin at as expect deleverage the pricing reduction our down forward. We we SG&A shrink and decline perspective quarter promo slightly with continue XXXX a focus moving From to on in more sales sales. levers on significant an positive in projected

the expenses driven than year XXXX, with versus sales are for stores mindset be SG&A a basis, increase savings the by We expect XXXX to our On expected distribution of centers, compensation to new increases now other structural our investments driven will By equity the ongoing year-over-year and versus deployment frugality. higher slightly of However, in are than reflecting $XXX -- close this structural mitigated fund XXXX, $XX sale stronger of we to guidance by journey expense incremental and by the up centers, equate our performance. leverage the will strong investments, structural from increase expense the of start in and reductions expense. increases than million strategic achieved the cost forward rate more have XXXX. more run of of million our These savings. prior leaseback

the expect accelerate to store to investments going adding XXXX our now We outlook capital and in drive forward. additional store to we expenditures from capital modestly opportunistically slightly our new higher strengthen refresh around other initial We million. and store million ship savings to has technology openings, as customer business. up and continue store to These be include $XXX for new moved online. more program, $XXX expect This experience projects locations enhance strategic to lean into

to focused root between our intervention open in closures progress XX down we excellent will continue store to diagnosing of and continue stores through which We store the expect be store holding XX around addressing causes program, XXXX XX on on make to of Meanwhile, and relocations. underperformance.

For outright accelerate as Bruce XX further a and in about and stores expect represent This to XXXX, total said, expect expect from acceleration to we count grow XXXX by XXXX XX store we a closures. will On net in meaningful we XXXX. basis, beyond. and, XXXX around

benefit last and clear are year customers' right significantly we a experience. capture improve increase to we our setting greatly we the XXXX. expect to conversion table seeing continue By as our inventories positioned will left inventory levels, be And We versus sales on rebuilt. inventory in-store to that

versus we We to second Additionally an to [indiscernible] exceptional be similar some XXXX, increases into in with Versus inventory QX last XX% of to Overall, improvement continued to will supply quarter around inventory and compared X% year year, in peak expect inventory the mitigate up QX, tough which our pressures, receipts and ending to will some QX. period QX. mark QX ahead up reflect strong to last build comparisons strong will equating performance chain XXXX. growth expect accelerate turn quarter around we

so to our to call moderator, questions. the begin can turn over I'll your that Now, Thank back address you. we

Advisory Instructions] Our Feldman Group. is coming first Joe [Operator from Telsey question today from

Your line is now live.

thanks merchandising Hey to taking and side. the I guys, quarter. a congrats great Great. my understand wanted question for on on better

starting are some of more. leaning to mentioned a you have been something Or hear about both -- in product two actually little I normal trying You're what those or today, a heard more know you has of to you're into apparel products. flow you've selling all televisions categories? were new of you been closeouts? those We

Hey, Joe. This is Thanks compliments. quarter that really Bruce, for we're I'll We're the Yes. what question. merchandising. with also in pleased doing take

had As on nice the -- showed of and food done was that what insight one that's that want categories all of a of the as as they us innovation the heard us is one with the lab, -- what exception double-digit wanted they Operation things comps that seeing you with across used was and left traction an consumables, And we've good Star our apparel. as to the North our Lot strategies, and things want. customers is

are growth West, seeing our closeouts, them apparel. so nice [ph] Jordache, not. leaned we've but customers. rate items branded York. seeing We're the We're is And that Nine -- done of Justice, Much great with of into what we've are response Indian many those there with Bay item Jones with of closeouts New

Just to name a few.

actually continued growth. is so that nice And growth,

cancel we're action adding shop correlation open you then to nice going forward that did at sales, [ph] but et the for a seeing. more an as if with and the and optimizing stocking something buy, expand buying. and We bringing we'll that's have we We forward, to want newness both to we're as off-price the a opportunity major that a as more then both what the a that pleased items entire learning margin the and traffic Jack floor, lean in drivers, worked. learn into how drivers, that retailer that was assortment television worked retail, driving assortment. we're cetera. well value and expect to job see customer of The very traffic in assortment close-out, well It had great will, driver growth and normal going traffic

you. it That's I a to the for you are share and you you the rollout That on does leveraging include you cost And assume, can that new color like seems important helpful. more forward, change labor going and that. training can share? little pretty guys wanted new rollout, like to, -- Thank could Maybe be model. like a then, and technology, time I of things then like

I'll Joe, jump on that. happy in be Yes to

You're referred is model sales question? script, that we about the in talking the furniture that the to

talking mentioned labor all of broader you in works I year. was training it you stores model, lift, and to seeing next and than share you But, was thought the end a that? there I if you're Yes, more was and was good drivers on about, furniture. it want have that's a could color yes, how wondering, such? I what and just The it And new by

Yes.

of we're really a our those is much has are so floor, in start are nice business and will Bruce teams So incremental I'll comment more open inventory significant result. what think store -- the there's on it, furniture somebody done a very decent time want dedicated then maybe which stores, pretty yielded working they putting -- some that the And we and more opportunity grow broadly, they is stores, the piece, very are with has Obviously, is that. of a put done we've to but we've sales, and furniture return very getting yes, we're and -- but is which a we're well furniture positive furniture number the where strong. seeing associated into entire -- testing from to that on there dedicated, also is on the also expense that there

we're that in opportunity we in that. currently, We've very expand the very see So but a got running we're to and interested pilot that. significantly then excited XXXX, yes, about

that's much with it, Good this Got helpful. Thanks so guys. quarter. luck

Thanks, Joe.

Joe. Thanks,

Thank you.

Our from Peter coming next Piper Keith question Sandler. today is from

now is line Your live.

everyone. Yes, thanks. Friday to you. Good happy morning, And

margins some you've but providing inventory. metrics good Jonathan, a around not of done pretty helpful guiding, also job So, and just

as of the for QX? year? a way out that QX, continuing two-year I'll you rate to comp that decent do at look sales. about guess, would as rest When of it is I from looking XX% we around So to that think Or -- for what you good ask a you run stacked prevent QX, have the to

Yes. Hey, Peter. the thanks and morning question. Good for

unemployment we the get last two-year some in low so this QX that continuing moderation through But further is have first from of in an we've QX, that plus from So that of in have were QX. half. comp impact two-year QX. that got to a the continuing do to represents to the double-digit benefits little QX, stack against bit impacted stack of stimulus so a around and on federal it the been benefit Most implies will going those expect of for continue played and point, a two-year those half And back will won't of up stack we have of XX.X comp then on benefits same through have basis. that QX, in year, effects largely year. which moderate a the that's to end year, guided We we XX,

get the benefit won't offset benefiting benefit, the bit in give that the We to the tax that in of us payments, of been a of but so the from child stimulus a from the that impact year. we've beginning credit front should July, new half in start unemployment the federal will

are on that been there out We people going out return of don't and which that's to that that the strong our but The categories internal exactly how be forecasting about would and going as some play that know other nesting to we be the through forward, will for piece trend, year the has spending home. things of assume very moderation us. outside normal

good. maybe -- home And trend. that very on the nesting Okay,

enormous industry. chain So backlogs supply an across is furniture there the we know

inventory share are how your in-stock maybe specifically, believe do is furniture think Are little bit I position you there? of your a having do any suppliers picking your getting some of because up US-based. not, product you're at and if Looking you positions? difficulty more

XX% receipts say through feel because chain of of But supply Yes, our have around so much place we good nicely healthier the sort some the expect up delayed some end we've And up around QX, inventory we our be from challenges. reported had we've DCs. issues said, widely Peter, I'd getting been, of challenges inventory in are that are been levels. an inventory There They increasingly a to now of year-over-year about standpoint. we at year-over-year. as

we its bit pretty pretty it's the want close believe, working be be through where of effect, going to And it's but we an way been system. to So we're a now. to soon

Okay, it very you Thank much. sounds good.

Thanks, Peter.

Thank you.

Our Markets. next question Loop today is coming from Capital Anthony Chukumba from

now is line Your live.

let Good strong my on as a me congratulations share morning. And well. quarter

paying bonus off, thought, I later and the total your to then quick Thank associates. off, had I that heard year? potentially you first was a amount DC special cash this mentioned, you that bonus? you. what second bonuses And -- you two a just I store further all anticipate I further guess, question, And of paid questions, my do So

to in happy outcome. and we've QX strong million say a good everybody Yes. to DC across great wanted that be the that We associates. one, contributions very at who driving And to hourly paid had participated had end Anthony, store of out morning. $X.X we of quarter recognize I'll the Company, in our the

happy the we that. much So for basically. $XXX do managers hourly and store every to managers were It then store pretty $XXX associate, assistants, very to to equated have and opportunity for

certainly forward, everybody going like things and across So continue at opportunity doing the the that, team. the to that do was to look reward to or have we're entire appropriateness grateful of to we'll

you. Thank it. Got

Thanks, Anthony.

Thank you.

Haas Our next question America. today from is of from coming Bank Jason

line Your live. is now

question. my taking for Thanks morning. Good

in Broyhill, brand. of made in So, Bruce, quality changes is stores. improvements, you've a brought lot a lot also you've which higher you've since A of joined,

existing do is your earning like more you you've customer. made So feel is, a customer customer my maybe like change you the wallet do question really And you're that base? higher a feel share just in capturing with bringing new

as I say When actually doubled aging was and have younger. lower think margin we and Yes, is actually we're our woman, and we leaning as us, do about is she -- super strategies with focuses done for in moments greater just we've the the addition we've she's the We I those more are American I types customers what life's with and apparel. XXX% seeing the Jason. of into. the also Broyhill, the and first for XX% that we're in going proud of year income with and things and more Lot, assortment hunt lab on I Broyhill, back of is are coming thanks, Hey, what like an traction million did XXs. some an today, customer back upscale and all which mean newness, of maybe that. middle-class She's some QX Broyhill just treasure done sell so saw Operation and innovation furniture of and us those like with XXXX that upper will of do started, in the down that's on to Broyhill, customer and Northstar we fact the the strong not very the well. that highlights we full we customers the shopping XXX then our thought ageing that growth. for but with at

nice that back store. well on shops to more brand then a a are often. that's it in entire So $X and and being brings Those the coming billion customer shopping way its customers really

just than really really did e-com -- more in again is of doing all I the highlighting rather once pantry our XX XXXX. optimization our it we million just makes focused and entertainment QX on think in and than chore it mean business in I the sales fun easy. the 'XX has FY

to see rewards last customers active shifting, net Transactions level. year with we're highest scores which XX% are a versus promoter to feeling is about great up interesting million really QX, how customer XX.X file, growth we're rewards up the the it's XX% customers, the So year-over-year. to now increasing our

loving the a think merchant overall, team the and putting getting is I loyal customer more frequently us shops of is the better assortment, so a And more customer, we're together. that improved freshness

to question hear. that's And Jonathan. for great Thanks, then,

on provided more some the cost framework for margin framework updated year. You color or

terms So some is, on trying it have freight, about is you how it and both pressures labor external We've investments in had you're the I'm what's sounds terms SG&A, cost some also pressures, I guess, how But to so parse out back just versus to what's the making out talked parse changed guidance, much changed of who some of investments question retailers in it costs. of trying of in mentioned really much like is really which business? in here? my in also other extra

yes. hey Yes, Jason,

answer SG&A. So gross let me break two margin into and around parts that

it's be little to where more close XXXX the in be were slightly to a call, we would gross the year the going down prior So, year on down now and margin for said the rate saying full we're XXXX. more we for versus and

on So two-year roughly flat a basis.

than a little in to. do QX did we better guided However, bit we

we've QX now, did our to is seeing down to see the year from grown On taken to is we were QX. to we margin as gross what And relative to in which up freight particular in the a us pressure you're balance causing SG&A, the out and we're year, impact lower in overall that's what's has So year up we quarter markdowns able slightly seeing. offset seen in of than thought just notch. ago. a a but so more down year of half what we significantly year look guidance as We we the rate incremental greater that back that the the last what take in you've fairly last lower through than guidance were promotions our expense for QX, for

out the look the relatively of year. we SG&A expect as of balance year, of the we balance be for flat kind So the full to

So was we that. we fairly lapped yet will have June, we on get what the haven't to in QX we as was in we saw a lapped leaseback, impact significant had, sale which QX

change. of of of So year-over-year out that's model the in kind terms a

proportion this performance QX. than spot expense be And then much expense awards higher in for as was bonus QX bonus significantly [ph] also of year equity certainly, we awards. the the bonus share had we of about bonuses also formula higher it ago. a cash ago, than We and performance because a been that to in the all we higher into on compensation price year, equity to The lot in a increase strong given and stock booked a year granted expenses QX had higher expense expense be a talked that's caused in a ago were accounting also to year had line. And our the incremental purposes, how plays that our had certainly significant booked for non-cash then, when causing so compensation the moment our

then good expense related the to against obviously, and some higher to had sales some effects in a COVID very flex we in and well was. about that's XXXX, we QX feel which that although, then we lower continued some were how to level over expenses normal So of up controlled degree

year thought biggest -- So, is are quarter continuing last of comp equity to the that really driver; things they've expense But to through where some QX our previously little we about piece. main of of was increase. that call, I talked some not than ago. relative forward to continuing the deployment a the part the expense particularly a so we roll then I as we really callouts some that's invest are think driven 'XX since and around what think it's were dramatic We a we they projecting bit in, centers the SG&A more for up moved have the

really Got you. Thank helpful. That's it.

Thank you. pleasure. My

question [Operator Our from next Capital KeyBanc Thomas from Markets. is Instructions] coming Brad Thank you. today

Your now is live. line

Hi, morning, Jonathan, here. on good to start the Bruce the congrats good and year

that which I other on potentially furniture And to the Just real some continue margins. come you, nice you, mix. medium hand, we've as been think promotional, headwinds of mean, could I margin? on one off period share clearly have think was the about a grow or retailers your term be a you around some of your and in wanted to questions follow could they up drivers thoughts for some for less longer have tailwind as been if the Broyhill business on I you opportunities the gross wondering, on on prior hand, may the

gross just longer was opportunity I how about margin the term? So thinking curious, you're

kick one, to that on happy be off I'll Brad. Yes,

two that to well think think is potential a XX ongoing margin when a one be to a pricing to markdown benefit around are have space much the very likely impact I mix this optimization top should but you think new we get as the forward to lever of tools, stores little be are -- planning and higher average time. benefit and tools get helping pretty to there -- opportunity expect company towards tackle more there. out to Mix, significant XXX from, new we those as in processes and shrink program with how over new -- to It's so just be if time, shrink point, top now we're alone. And an close that we get continue rolling down we we line, shrink in stores on to more going helpful. categories. think focused your an also a we to scientific great will the higher next heavily would prepared we our continue may us see going we over more we significant make remarks us were help the some significant And significant that. promo, of 'XX, on from we've a see, we those as around The question margin it's have in planning that bit because around levers which could in in quarter the a and a referenced standpoint or tools

out technologies XXXX. yield were be new So around already which rolling nice we're we'll in tools to return rolling starting and out and a that very too, more extensively

forward. going believe we yes, drivers definitely So margin there are

with relationships and to collaboratively add to one with continuing work suppliers cost Another our would effectively. our to be suppliers manage our

of will there have think, series and eventually as tailwinds are then a forward well. going we So

could the expect XXXX. point some around to at freight headwinds and in a tailwind become turn will We start

I a what bit and customers forward, Great. important transactions do improve and follow-up Clearly, a strategy consumable for an that food ask forward? how going it an can furniture. traffic talk exactly and look about category they and for can driver Can you area for food as And on consumables. is could you if looking are then the we you, more

our last the long just from year, take where initiative, and and the we're optimization like best Thanks, multiple of Yes. entertainment Food having at which pantry was wind food a we and like staples out some accentuate the rolled or food mentioned really staples were canopies Brad. to we consumables, space away competitive.

items food us up list and consumables, of items or and comes there. really her for everyday our space entertainment shop and home shops essentials that low giving prices and items she So those nice further to allowing that and type then to more chemicals seeing the in her on in area, traction we're down

her another items of two-year performance us, out her over we're her she completes stack, chore, opportunity types we're the what we compete fun in basically to address store basically we traction what and foods. So, optimization, maybe the nice of there. seeing pantry seeing pantry can at than to was shops But we're as on the some saw trip cool the is nice seeing comes refrigerated better rather our shopping of where trip list

so Thank you Great. much.

got You it.

Thank you.

next Our from Karen Barclays. from question is coming Short today

line Your now is live.

on Hey Karen. guys, for Basanta taking good for morning. This actually Renato is Thanks my questions.

month a in So, just guidance XQ. Obviously more bit digit about with you thinking just how first, if by I guide May. decline a was in little you're wondering to what the comp to help But lot parts thus month you about us relative talk lot far on. can that low-double has framing just of maybe comp stimulus could and moving been the going the maybe, actual a

two-year us a give actually number Just May basis. maybe on that

compare to guidance? we incorporated that in can that XX% So

that. to I'll Yes, happy Renato, take good morning, and be

for some good but the we And month given we in is be running the as give quarter, what yes, there to typically by last do start. in two-year quarter. what ahead month are don't remarks, up we're moderation So, a year. to expect said prepared quarter-to-date the commentary, But we for off we're May we to of specific guiding a from full a trend, the against standpoint

are So today where for the good about we quarter. feel we

you basis. about XX% basis we a and On around deconstruct I to really two-year little which to clearly two-year bit, about. two-year one-year try a it's it again, the a important that at comp, both good think, if talked look we stacked feel

by XX.X%. and initiatives. earlier back We our that all driven If effect being of less on balance prepared in about year-over-year. promotional, half think us about with -- net stimulus remarks internal talked of our -- We benefits we was being unemployment QX, the to the ones the we of overall talked and you go comp the

its sustain unemployment out we our will So and important other on What really the on for stimulus's the our point to the we're you over the time. is is our -- out I we going out-of-view, think, good when focus focused to underlying and accomplishing pull of stimulus comps play -- the below continuing that's be been that trend where historic we all the stimulus, is and are we today way we'll run sustain business effects able really feel that optimistic core fades forward. and our and rate, when that are us

cetera? and maybe scale Pickup to with then impact great. respect Okay, give of helpful. et also Instacart the e-commerce How and newer initiatives? And And update that Thank the profitability? just like That's about the of some an about you. continues from you chain supply as fulfillment can thinking then, you're us your offerings business to the talk and impact

take some off, add I'll you Yes, that, asking. thanks can for Jonathan, Hey, color. first more

XXXX. we did in job, XX all e-commerce mentioned, of Our more million in sales QX And we of a that's did in as QX than fabulous what has XX% X just team QX plus of done XXXX. we sales times in

for our service a XX now, profitable. same stores day Instacart terms deliveries. has but We're being is stores Pickup no XX nice which is par margin, We in rate And which much pretty profitable of go pay next remain at profitability. this delivery for from -- store on we second in That but still about our The less the of online, about you heard profitable, we buy to with decreases and quarter. that pickup expenses, from Pickup slightly, seeing is are us growth then, is if profitability, e-commerce day will, there. ship store, a shipping fee and as our profitable. is -- same a you it's our store, curbside from profitability Instacart is in the business quite and two-day quite still delivery that delivering do from two-thirds which talk than is service, So

that grow We and Our in shoppers as a key easy simple, we see to continuing. for do our really business manner. productive our it making it e-com was and focus customers, profitable

removing Google that, Our more with in come and focus Pay later. the that there on is is comes friction right transactions now will that the and Apple more than

ever believe to are conversion chat, still that Now this achieve All us do these online is moving do ever just now. as messages. which shy the will grow highest things a And had, and $X billion profitably X% SMS we rate of is channel helping and text we've forward. it we productively

So struggled we're quarter we'll the We catch up. very more continue to first aisle. and availability e-commerce productivity just and some and the in she traffic leaning categories, comes fact more news strong the to to extending we've that have to add good in is our into the is now and inventory in -- skews, that

e-commerce as about feel So total. we in going is very good our retail and where omnichannel feel pretty us good about, an actually

Thanks Great. luck. for color. the Best of

it. got You

and of does Time June you on Time Friday PM Eastern question-and-answer noon and Thank May session. this will end XX. afternoon, replay replay you. to be gentlemen, webcast. that We've call Eastern available our reached Ladies today's A XX The end conclude XXth. XX:XX of this will teleconference by

replay followed the and number You can by pound sign. followed the XXX-XXX-XXXX toll XXX-XXX-XX The toll confirmation dialing confirmation by XXXX-XXX-XXXX, is pound by the replay sign. XXX-XXX-XX enter free access replay

great now a thank day. your today. and may have You participation for disconnect We you