Big Lots Inc. (BIG) stock prices were down 6.21% as of the market closing on August 26th, 2021. This brought the price per share down to USD$54.25 at the end of the trading day. Subsequent premarket trading saw the stock fall by 8.50%, bringing it down to USD$49.64.
Operation North Start Initiatives
The company reported continuing the strength of Q1 2021 into the second quarter, demonstrating the strength of its Operation North Start strategic initiatives. BIG stock has continued to focus on customer growth, merchandise productivity, ecommerce, and store count growth. The company reported two-year comp sales growth across almost the entirety of its merchandise categories, other than food. Furniture, Soft Home, Hard Home, and Apparel, Electronics, and Other categories all reported double-digit two-year growth.
BIG Stock’s Inventory Levels
BIG stock ended the second quarter of fiscal 2021 with inventory amounting to USD$944 million. This is a 32% increase from the USD$714 million reported in the prior-year quarter. The year-over-year difference was largely driven by the lapping of atypically low inventory levels at the end of the prior-year quarter.
BIG Stock’s Liquidity Position
The second quarter of fiscal 2021 ended with BIG stock reporting a solid liquidity position with USD$293 million in cash and cash equivalents. The company reported no long-term debt as of this period. The second quarter of the prior year saw the company report USD$899 million in cash and cash equivalents, against USD$43 million long0term debt. Over the course of the quarter, BIG stock paid off the USD$44.3 million principal balance that remained under its 2019 Term Note. This Term Note was secured by equipment at its Apply Valley, California distribution center.
Share Repurchasing Program
August 27th, 2021 saw BIG stock’s Board of Directors authorize the repurchase of up to USD$500 million of the company’s outstanding common shares. This move allows the company to repurchase shares in the open market and/or in privately negotiated transactions, at its discretion. The second quarter of fiscal 2021 saw the company invest USD$153 million in repurchasing 2.4 million shares. Each share was priced at USD$63.57 for the transaction. By the end of Q2 2021, the company had used USD$403 million to repurchase roughly 7.3 million shares at an average price per share of USD$55.18.
Future Outlook for BIG Stock
The company has had a strong first half of 2021, consolidated by the strength of its financial reports for Q2 2021. BIG stock is poised to capitalize on the opportunities afforded to it in its ongoing efforts to continue the trajectory of success it has been enjoying. Investors are confident that this will translate into consistent returns on shareholder investments over the long term.
