Big Lots Inc (BIG) 2023 Q3 法說會逐字稿

Good morning. This is Alvin Concepcion, Vice President of Investor Relations at Big Lots. Welcome to the Big Lots Third Quarter Conference Call. Currently, all lines are in a listen-only mode. If you require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. On the call with me today are Bruce Thorn, President and Chief Executive Officer, and Jonathan Ramsden, Executive Vice President, Chief Financial and Administrative Officer.

早安.我是 Alvin Concepcion，Big Lot 投資者關係副總裁。歡迎參加 Big Lot 第三季電話會議。目前，所有線路均處於僅監聽模式。如果您需要接線生協助，請按電話鍵盤上的星號零。提醒一下，本次會議正在錄製中。今天與我通話的有總裁兼執行長布魯斯·索恩 (Bruce Thorn) 和執行副總裁兼首席財務兼行政官喬納森·拉姆斯登 (Jonathan Ramsden)。

Before starting today's call, we would like to remind you that any forward-looking statements made on the call involve risk and uncertainties that are subject to the company's Safe Harbor provisions as stated in the Company's press release and SEC filings, and that actual results can differ materially from those described in the forward-looking statements.

在開始今天的電話會議之前，我們想提醒您，電話會議中所做的任何前瞻性陳述都涉及風險和不確定性，這些風險和不確定性受公司新聞稿和SEC 文件中所述的公司安全港條款的約束，實際結果可能會受到影響。與前瞻性陳述中描述的內容有重大差異。

We'd also like to point out that commentary today is focused on adjusted non-GAAP results. Reconciliations of GAAP to non-GAAP adjusted results are available in today's press release. The third quarter earnings release presentation and financial information are available at Big Lots.com/corporate/investors. A question and answer session will follow the prepared remarks. I will now turn the call over to Bruce.

我們還想指出，今天的評論重點是調整後的非公認會計準則績效。今天的新聞稿中提供了 GAAP 與非 GAAP 調整後結果的調整表。第三季收益發布演示和財務資訊可在 Big Lot.com/corporate/investors 上取得。在準備好的發言之後將進行問答環節。我現在將把電話轉給布魯斯。

Good morning, everyone, and thank you for joining us. Q3 remained a very challenging environment, the one in which we were able to deliver on or exceed our beginning of quarter guidance on all key metrics, we posted a sequential improvement in comp sales, significant year-over-year improvement in gross margin rate and adjusted SG&A well below last year, despite absorbing additional expense related to the recent sale leaseback. We believe these improvements are being driven by the five key actions that underlie our strategy. As a reminder, these are to own bargains to communicate unmistakable value to increase store relevance to win with omnichannel and to drive productivity. As these actions continue to gain momentum, we expect an adjusted Q4 operating result ahead of last year, marking the first quarter of year-over-year improvement in nearly three years, and we expect quarterly year-over-year improvements to continue through 2024.

大家早安，感謝您加入我們。第三季仍然是一個非常具有挑戰性的環境，我們能夠在所有關鍵指標上實現或超過季度初的指導，我們公佈了公司銷售的連續改善，毛利率的同比顯著改善以及儘管吸收了與近期售後回租相關的額外費用，但調整後的銷售及管理費用遠低於去年。我們相信這些改進是由構成我們策略的五項關鍵行動所推動的。提醒一下，這些都是為了擁有便宜貨，傳達明確的價值，提高商店相關性，以全通路獲勝並提高生產力。隨著這些行動繼續獲得動力，我們預計調整後的第四季度經營業績將領先去年，這標誌著近三年來第一季同比改善，並且我們預計季度同比改善將持續到 2024 年。

Progress on the five key actions, lower freight costs and a reduced level of markdowns supported by an appropriate inventory position drove the improvement in the third quarter. These factors will continue to be the primary drivers for sequential improvement in the fourth quarter to support our ongoing turnaround. Our efforts to aggressively manage costs, inventory and capital expenditures as well as monetize owned assets, have enabled us to significantly strengthen our balance sheet. We are on track to achieve over $100 million of SG&A cost savings goals for the year prior to Project SpringBoard savings. Project SpringBoard is off to a strong start and on track to deliver $200 million of bottom line opportunities, most of which we expect to realize in 2024.

五項關鍵行動的進展、貨運成本的降低以及適當庫存狀況支持下降價水準的降低推動了第三季的改善。這些因素將繼續成為第四季度連續改善的主要驅動力，以支持我們持續的扭虧為盈。我們積極管理成本、庫存和資本支出以及自有資產貨幣化的努力，使我們能夠顯著加強我們的資產負債表。我們預計在 SpringBoard 專案節省之前的一年實現超過 1 億美元的 SG&A 成本節省目標。 SpringBoard 計畫已經有了一個良好的開端，預計將提供 2 億美元的利潤機會，我們預計其中大部分將在 2024 年實現。

Our net liquidity at the end of the third quarter was a solid $258 million despite the normal seasonal working capital build ahead of the holiday season.

儘管假日前季節性營運資金正常成長，但第三季末我們的淨流動性仍高達 2.58 億美元。

I'd like now to circle back to highlight some of the recent progress we've made on the five key actions, which will continue to drive momentum in our business as it relates to owning bargains The third quarter marks an important milestone on our journey to provide incredible value, our mix of bargains, which are close-out items, opportunistic buys and other source products where we have a significant comparable price advantage was nearly 50% of sales in Q3, well exceeding our goal of over one-third by the end of the year. We achieved this by procuring products from over-inventoried in distressed retailers and vendors and through new factory direct sourcing partners domestically and overseas. That said, our path to offer more compelling bargains across a broad range of categories is by no means complete. Our next phase is to offer more extreme bargains, whereas a typical bargain would be at a price that's significantly below most retailers prices and extreme bargain would be priced significantly below price leading retailers to help us accelerate our progress on owning bargains.

我現在想回顧一下我們最近在五項關鍵行動上取得的一些進展，這些行動將繼續推動我們業務的發展勢頭，因為它與擁有便宜貨有關。第三季度標誌著我們旅程中的一個重要里程碑為了提供令人難以置信的價值，我們的討價還價組合（包括清倉商品、機會主義購買和我們具有顯著可比價格優勢的其他來源產品）佔第三季度銷售額的近50%，遠遠超出了我們三分之一以上的目標年底。我們透過從陷入困境的零售商和供應商庫存過剩的產品以及透過國內外新的工廠直接採購合作夥伴採購產品來實現這一目標。也就是說，我們在廣泛的品類中提供更具吸引力的特價商品的道路還遠未完成。我們的下一階段是提供更極端的特價商品，而典型的特價商品的價格將大大低於大多數零售商的價格，而極端特價商品的價格將大大低於領先零售商的價格，以幫助我們加快擁有特價商品的進度。

Earlier today, we announced the creation of a new role, Senior Vice President of extreme value sourcing to help lead our growing team of close-out buyers, and this leader will report directly to me. Pathmark's is a highly seasoned closeout merchant who will rejoin us next week after having spent time with our company earlier in his career, Seth brings almost 30 years of experience in off-price and closeout sourcing and was with Big Lots when we were the clear market leader in broadline closeout retailer. He returns to Big Lots with a wealth of strategic sourcing experience, deep industry relationships and merchandising background and extreme bargains as it relates to communicating unmistakable value. Our recent marketing efforts continue to bear fruit. Customers are increasingly recognizing the value of the bargains we are delivering every day while also responding well to our promotions in early October, we launched a Black Friday is every Friday series of events with up to 50% of deals through December 22. This is one example of how we are using extreme bargains events to engage customers, drive traffic and create a positive halo around price perception. And we have accelerated our efforts to showcase value in our stores by emphasizing comparable value for our bargain offers, as well as increasing the penetration of bargains in our endcap and the drive aisle. As a result, we saw further increase in our net customer value perception scores. We rolled out new promotional tools and processes in June, which is helping us eliminate nonproductive promotions and target our promotional spend where we will see the greatest return and we expect to continue to accelerate this progress into 2024. We're also getting better at refining our messages to our key customer segments to improve the effectiveness of marketing such as furniture and mattress focused campaigns that promote Comvalue price points delivered to homes segment customers. We continue to focus on increasing store relevance. We are continuing to flex our assortment to capture customer demand. These efforts have shown encouraging results. Flexing our assortment encompasses increasing inventory in top-performing categories in stores as well as taking inventory out of bottom performing categories in stores creating whitespace opportunities such as in pet to grow frequency and optimizing our space with more productive SKUs, particularly in food and consumables. It also means introducing more newness and trend right product in our assortment, such as the rollout of our new Broyhill collections, additional modern furniture styles, many of our stores, accent furniture and expansion of the core, which began in the last year. New products as a share of total SKUs are up year over year. And while it's still early, overall, we are seeing a sales and gross margin uplift from new items similar to the flexing of our assortment in areas such as consumables, where we've seen success. We're also experimenting with new store formats, showcasing expanded selections of trendy, stylish and quality home decor and furniture with amazing comparable values. The intent is to provide us with learnings that can be applied to our broader store base. Improvement in store execution is also critical to increasing our relevance to help us on that journey. We are thrilled that Kristin Cox will join the leadership team next week as our Senior Vice President, Chief Stores Officer, Kristen has significant experience at running highly productive. Off-price stores were flexible, branding and assortment at the store level is critical. Most recently she was the Senior Vice President at Burlington Stores and before that at Macy's. So we're excited about our ability to drive the continuing evolution of our store base to better showcase our assortment, value offerings and messaging. And we have been improving the customer experience to help us win with omnichannel. We continue to focus our omnichannel efforts on leveraging our store base and improving our customers' experience across our digital platforms. For example, our new landing page launched in August showcases clear value messaging, easier navigation and an elevated design that she is responding to. We've added comp values to the site to better communicate the value the Big Lots provides every day. We also added a bias landing page which are closeouts that feature some of our best bargains that are often available only in stores. That said, we have more work to do to enhance our platform with special attention to our big ticket Furniture and Seasonal Products as it comes to Big Lots.com to research. First, we're excited with our progress and even more excited with the opportunity we have to positively influence her home shopping journey. We've also upgraded capabilities through our new order management system. This system provides a single view of inventory availability, which in turn improves product availability and promise states for our customers. We recently went live with the next phase of the rollout, which is to intelligently route and allocate orders to minimize split shipments to customers enhancing their experience while also reducing shipping costs. We're also focused on extending our brand into new and untapped spaces to engage new customers just in time for the holiday season, we're making it easier to take advantage of the bargains we're known for by adding two briefs to our suite of marketplace. This partnership will allow us to engage new and younger customers with our brand and bolster our marketplace. Sales growth already up nearly 75% year to date through Q3. These four key actions will be important traffic drivers in the future. The last key action is to drive productivity through structural cost reductions, inventory turns and CapEx efficiencies. As I mentioned, we're well on track with these efforts, and Jonathan will speak more about what we are doing to drive productivity in a few minutes.

今天早些時候，我們宣佈設立一個新職位，即極值採購高級副總裁，以幫助領導我們不斷壯大的結清買家團隊，該領導者將直接向我匯報。 Pathmark's 是一位經驗豐富的清倉商人，在職業生涯早期曾在我們公司工作過，他將於下週重新加入我們。Seth 帶來了近30 年的折扣和清倉採購經驗，當我們還是清倉市場時，他就在Big Lot 工作廣泛清倉零售商的領導者。他帶著豐富的策略採購經驗、深厚的產業關係和銷售背景以及與傳達明確價值相關的極端討價還價回到 Big Lot。我們最近的營銷努力繼續取得成果。顧客越來越意識到我們每天提供的特價商品的價值，同時也對我們 10 月初的促銷活動反應良好，我們在每週五推出了黑色星期五系列活動，截至 12 月 22 日，優惠高達 50%。我們如何利用極端特價活動來吸引客戶、增加流量並在價格認知周圍創造積極的光環的示例。我們還加快了在商店中展示價值的努力，強調我們的特價商品的可比價值，以及增加特價產品在端蓋和驅動器通道中的滲透率。結果，我們看到客戶淨價值感知得分進一步提高。我們在6 月推出了新的促銷工具和流程，這有助於我們消除非生產性促銷，並將促銷支出瞄準我們將獲得最大回報的目標，我們預計到2024 年將繼續加速這一進展。我們在精煉方面也做得越來越好我們向主要客戶群傳達的訊息是為了提高行銷的有效性，例如以家具和床墊為重點的活動，以促進向家庭細分客戶提供 Comvalue 價格點。我們繼續專注於提高商店相關性。我們將繼續豐富我們的產品種類，以滿足客戶的需求。這些努力已展現出令人鼓舞的成果。靈活調整我們的品類包括增加商店中表現最好的品類的庫存，以及減少商店中表現最差的品類的庫存，從而創造空白機會（例如寵物）以增加頻率，並通過更高效的SKU（尤其是食品和消費品）優化我們的空間。這也意味著在我們的產品系列中引入更多新穎和潮流的產品，例如推出新的 Broyhill 系列、其他現代家具風格、我們的許多商店、特色家具以及去年開始的核心擴張。新產品佔 SKU 總數的比例逐年上升。雖然現在還為時過早，但總體而言，我們看到新產品的銷售額和毛利率有所上升，類似於我們在消耗品等領域的產品組合的擴展，我們在這些領域已經取得了成功。我們也正在嘗試新的商店模式，展示更多具有令人驚嘆的可比價值的時尚、時尚和優質的家居裝飾和家具選擇。目的是為我們提供可以應用於更廣泛的商店基礎的知識。商店執行力的改進對於提高我們的相關性以幫助我們完成這趟旅程也至關重要。我們很高興克里斯汀考克斯 (Kristin Cox) 將於下週加入領導團隊，擔任我們的高級副總裁兼首席商店官，克里斯汀在高效運營方面擁有豐富的經驗。折扣店非常靈活，商店層面的品牌和品種至關重要。最近，她擔任伯靈頓百貨公司的高級副總裁，此前曾擔任梅西百貨公司的高級副總裁。因此，我們很高興能夠推動我們商店基礎的持續發展，以更好地展示我們的品種、價值產品和資訊。我們一直在改善客戶體驗，以幫助我們透過全通路獲勝。我們繼續將全通路工作重點放在利用我們的商店基礎並改善客戶在數位平台上的體驗。例如，我們在八月推出的新登陸頁面展示了清晰的價值訊息、更輕鬆的導航以及她所回應的升級設計。我們在網站上添加了補償值，以便更好地傳達 Big Lot 每天提供的價值。我們還添加了一個偏向登陸頁面，該頁面是清倉頁面，其中包含一些通常僅在商店中提供的最佳特價商品。也就是說，我們還有更多工作要做來增強我們的平台，特別關注我們在 Big Lot.com 上進行研究的大件家具和季節性產品。首先，我們對我們的進步感到興奮，更興奮的是我們有機會積極影響她的家庭購物之旅。我們也透過新的訂單管理系統升級了功能。該系統提供了庫存可用性的單一視圖，從而提高了產品可用性和對客戶的承諾狀態。我們最近開始實施下一階段的部署，即智慧地路由和分配訂單，以最大程度地減少向客戶的分批發貨，從而增強他們的體驗，同時降低運輸成本。我們也致力於將我們的品牌擴展到新的和未開發的空間，以便在假期期間及時吸引新客戶，我們透過在套房中添加兩條內褲，讓人們更容易利用我們聞名的特價商品的市場。這種合作關係將使我們能夠利用我們的品牌吸引新的和年輕的客戶，並增強我們的市場。今年第三季迄今為止，銷售額成長已接近 75%。這四項關鍵措施將成為未來重要的交通驅動力。最後一個關鍵行動是透過結構性成本降低、庫存週轉和資本支出效率來提高生產力。正如我所提到的，我們的這些努力進展順利，喬納森將在幾分鐘內詳細介紹我們為提高生產力所做的工作。

So to sum, it up, we are confident that the five key actions will translate into continued sequential improvement and financial performance in the near to medium term.

總而言之，我們有信心這五項關鍵行動將在中短期內轉化為持續的持續改善和財務表現。

I will now make a few more comments about Q3, which, as I noted a moment ago, was in line or ahead of our guidance in all key metrics. Comp sales were down 13.2% in line with our guidance of down low 10s trends improved sequentially relative to the second quarter, driven primarily by an improvement in seasonal sales. That said, we're clearly not happy that comps were negative customers continue to be cautious on high ticket purchases such as furniture and traffic-driving categories such as food and consumables, were impacted by fierce competition in the space where there is less product differentiation, a point where I will come back to in a moment. First, margins were up by 240 basis points versus last year despite the sales decline, which was above our guidance of up 200 basis points year over year. Improvement was due to a significant benefit from lower freight costs and reduced markdown activity.

我現在將對第三季發表更多評論，正如我剛才指出的那樣，第三季的所有關鍵指標都符合或領先於我們的指導。比較銷售額下降了 13.2%，符合我們對第二季下降 10 % 趨勢的指導，這主要是由於季節性銷售的改善。話雖如此，我們顯然不滿意的是，負面客戶繼續對家具等高價購買以及食品和消費品等交通驅動類別保持謹慎，受到產品差異化較少的領域激烈競爭的影響，我稍後會回到這一點。首先，儘管銷售額下降，利潤率仍比去年增長了 240 個基點，高於我們同比增長 200 個基點的指導。改善是由於貨運成本降低和降價活動減少的顯著效益。

Looking at specific category performance in the quarter. Seasonal comps declined 15% in Q3 as a result of comping high promotions from last year due to an oversized seasonal buy. That said, the rate improved relative to Q2, aided by solid sales of Halloween and Christmas items. Sequentially, improved sell-through rate combined with a material reduction in promotional activity versus last year in seasonal, gave a major boost to our overall gross margin rate and Christmas items, new products and expansion of lower-priced outdoor home decor and glitzy styles performed well and benefited from being featured as an extreme bargain on one of our Black Friday is every Friday events in Q4. We are continuing to see strong sell-through and Christmas items on a significantly lower base than last year. Our furniture Soft Home and Hard Home categories were each down double digits, with furniture slightly better sequentially relative to Q2 on a year-over-year basis. In furniture, we have seen significant improvement in comps in Q4 to date, which is a very encouraging sign for our overall business improvement is a result of better in-stocks and newness in Broyhill items as well as clearing through United Furniture mitigation products, which were less optimal as we scramble to procure assortments to fill the void and were not able to feature complete sets or pieces we would have wanted as a reminder, we are just starting to lap the abrupt closure of United Furniture previously, our largest furniture vendor, which created significant headwinds for us beginning in Q4 last year, improvement in furniture is also providing a positive halo effect on soft home sales. Also, our new assortments in areas such as access to core and modern styles, started to rollout in the third quarter, and we expect sales momentum to continue to build as we lean into newness and value offerings in food and consumables, we were not aggressive enough with offering bargains in these highly competitive categories. So we are focused on accelerating the penetration of IQstream bargains, particularly in the food category. This will be one of the areas of focus for SAP as it begins to accelerate our close-out along with our ongoing efforts to optimize and reset our consumable assortment. We're already seeing an improvement in these categories, which we expect to gain momentum in Q4.

查看本季特定類別的表現。由於季節性購買量過大，導致去年的促銷活動較多，因此第三季季節性比較下降了 15%。儘管如此，由於萬聖節和聖誕節商品的強勁銷售，這一比率相對於第二季度有所改善。因此，售貨率的提高，加上季節性促銷活動的大幅減少，大大提高了我們的整體毛利率，聖誕商品、新產品以及低價戶外家居裝飾和炫目的風格的擴張很好，並受益於我們第四季每個星期五的黑色星期五活動之一的極度便宜。我們繼續看到強勁的銷售量和聖誕商品的基數明顯低於去年。我們的家具「軟家居」和「硬家居」類別都下降了兩位數，其中家具年比略好於第二季。在家具方面，迄今為止，我們在第四季度看到了比較的顯著改善，這對我們的整體業務改善來說是一個非常令人鼓舞的跡象，這是由於Broyhill 商品的庫存增加和新穎性以及透過United Furniture 緩解產品進行清算的結果，這不太理想，因為我們爭先恐後地採購品種來填補空白，並且無法提供我們想要的完整套裝或件作為提醒，我們剛剛開始接受我們最大的家具供應商聯合家具公司的突然關閉，從去年第四季開始，這給我們帶來了巨大的阻力，但家具的改善也為軟住宅銷售帶來了積極的光環效應。此外，我們在獲得核心和現代風格等領域的新品種已於第三季度開始推出，隨著我們傾向於食品和消費品的新穎性和價值產品，我們預計銷售勢頭將繼續增強，但我們並不積極進取在這些競爭激烈的類別中提供便宜貨就足夠了。因此，我們專注於加速 IQstream 特價商品的滲透，特別是在食品類別中。這將是 SAP 關注的領域之一，因為它開始加速我們的收尾工作，同時我們不斷努力優化和重置我們的耗材品種。我們已經看到這些類別的改善，我們預計將在第四季度獲得動力。

In regards to Q3, although the overall sales performance was not where we would like it to be, we saw benefit from flexing food assortments up in high demand areas as well as an optimized and reset consumables assortment, particularly in Personal Care categories such as hygiene and haircare. That was again a standout performer with positive comp growth aided by the expansion of our assortment in the fall.

關於第三季度，儘管整體銷售業績未達到我們希望的水平，但我們看到了在高需求領域靈活調整食品品種以及優化和重置消耗品品種的好處，特別是在衛生等個人護理類別中和護發。這又是一個表現出色的公司，在秋季我們品種的擴大的幫助下，公司業績實現了積極的成長。

Before I pass it over to Jonathan, I'd like to take a moment to thank our over 30,000 associates or as I like to call them value creators for all of their hard work and efforts. Despite the challenges we continue to navigate, I know we can count on them all to bring their big every day I'd also like to welcome our new value creators, Seth marks and Kristin Cox to the team. I will now pass it over to Jonathan and I will return in a few moments to make some closing comments before taking your questions.

在將其交給 Jonathan 之前，我想花點時間感謝我們 30,000 多名員工，或者我喜歡稱他們為價值創造者，感謝他們的辛勤工作和努力。儘管我們繼續面臨挑戰，但我知道我們可以依靠他們所有人每天都帶來精彩。我還要歡迎我們的新價值創造者 Seth Marks 和 Kristin Cox 加入團隊。我現在將其轉交給喬納森，稍後我將返回，在回答您的問題之前發表一些結束語。

Good morning, everyone, and I would like to echo Bruce's thanks to the entire team here at Big Lots for their outstanding efforts as we continue through our turnaround. As Bruce noted, we are encouraged by the progress we have made to stabilize and turn our business and look forward to deliver an adjusted Q4 operating result ahead of last year for the first time in almost three years. We are confident that the five key actions and the excellent progress we are making on Project SpringBoard will continue this forward momentum in 2024.

大家早安，我也想向 Big Lot 的整個團隊表達 Bruce 的感謝，感謝他們在我們繼續扭虧為盈的過程中所做的傑出努力。正如布魯斯所指出的那樣，我們對穩定和轉變業務所取得的進展感到鼓舞，並期待近三年來首次提前於去年實現調整後的第四季度經營業績。我們相信，SpringBoard 計畫的五項關鍵行動和取得的出色進展將在 2024 年繼續保持這一前進勢頭。

I will now provide some more detail on our Q3 results, which I will discuss on an adjusted basis. Excluding distribution center closure costs, impairment charges, gains on the sale of real estate and related expenses and fees related to Project SpringBoard.

我現在將提供有關第三季度業績的更多詳細信息，我將在調整後的基礎上進行討論。不包括配送中心關閉成本、減損費用、房地產銷售收益以及與 SpringBoard 專案相關的相關費用和費用。

The third quarter summary can be found on page 9 of our quarterly results presentation. Going into the quarter, we expected continued weakness in the sales environment due to inflation and weak overall demand for discretionary items. However, trends improved sequentially relative to the second quarter, driven by easier prior-year comparisons and improvements in our seasonal business, particularly Halloween and Christmas items, as well as effective promotional events. As a result, our inventories are at an appropriate level down similar to sales and leaving us well positioned coming into Q4.

第三季摘要可在我們季度業績簡報的第 9 頁找到。進入本季度，我們預計由於通貨膨脹和非必需品整體需求疲軟，銷售環境將持續疲軟。然而，由於與上年相比更容易以及我們的季節性業務（特別是萬聖節和聖誕節商品）以及有效的促銷活動的改善，趨勢相對於第二季度有所改善。因此，我們的庫存處於與銷售額類似的適當水平，這使我們在進入第四季度時處於有利地位。

Q3 net sales were $1.03 billion, a 14.7% decrease compared to $1.2 billion a year ago. The decline versus 2022 was driven by a comparable sales decrease of 13.2%, which was in line with our guidance range our third quarter adjusted net loss was $127.9 million, resulting in an adjusted diluted loss per share for the quarter of $4.38. The gross margin rate for the quarter was 36.4%, up 240 basis points to last year and above our guidance. The improvement versus last year was driven primarily by lower freight costs and a reduced level of markdowns, particularly in seasonal items.

第三季淨銷售額為 10.3 億美元，比去年同期的 12 億美元下降 14.7%。與2022 年相比，這一下降是由於可比銷售額下降13.2%，這符合我們的指導範圍，我們第三季調整後淨虧損為1.279 億美元，導致本季調整後攤薄每股虧損為4.38 美元。本季毛利率為 36.4%，比去年上升 240 個基點，高於我們的指引。與去年相比的改善主要是由於貨運成本下降和降價幅度減少，特別是季節性商品。

Turning to adjusted SG&A, total expenses for the quarter, including depreciation were $487.7 million, down 6% versus $518.5 million last year and better than our guidance of down low single digits. SG&A included rent of approximately $6 million resulting from our recent sale leaseback, which also had the effect of reducing depreciation expense by around $750,000. Our strong performance on SG&A was driven across multiple line items and included some initial benefits from Project Springboard.

談到調整後的銷售及管理費用，本季的總費用（包括折舊）為 4.877 億美元，比去年的 5.185 億美元下降了 6%，優於我們的低個位數指引。 SG&A 包括我們最近的售後回租產生的約 600 萬美元的租金，這也減少了約 75 萬美元的折舊費用。我們在 SG&A 方面的強勁表現是由多個項目推動的，其中包括來自 Project Springboard 的一些初步收益。

Adjusted operating margin for the quarter was negative 11.1%. Interest expense for the quarter was $13.6 million, up from $6.3 million in the third quarter last year due to higher average amounts drawn on our credit facility and higher interest rates year over year. Adjusted income tax for the quarter was $0.5 million. Recall that last quarter we recorded a valuation allowance against deferred tax assets resulting from the company being in a three-year cumulative loss position at the end of the quarter. As a result, this quarter and going forward, we are not able to record a tax benefit related to loss carry forwards until we are in a three-year cumulative income position. As a result, we expect the tax rate to be in the near zero range in Q4 as well.

此季度調整後營業利益率為負 11.1%。本季的利息支出為 1,360 萬美元，高於去年第三季的 630 萬美元，原因是我們的信貸額度平均提取金額較高，且利率同比較高。該季度調整後所得稅為 50 萬美元。回想一下，上個季度我們記錄了因公司在季度末處於三年累計虧損而產生的遞延所得稅資產的估值備抵。因此，本季及今後，我們無法記錄與虧損結轉相關的稅務優惠，直到我們達到三年累積收入狀況。因此，我們預計第四季的稅率也將接近零。

Total ending inventory at cost was down 12.5% last year and $1.18 billion. This was driven by both lower on-hand units and average unit cost and also lower in-transit inventory. During the third quarter, we opened eight new stores and closed two stores. The openings were all projects we committed to some time back.

去年，以成本計算的期末庫存總額下降了 12.5%，達到 11.8 億美元。這是由於現有單位和平均單位成本較低以及在途庫存較低所致。第三季度，我們開設了八家新店並關閉了兩家店。這些空缺職位都是我們之前承諾的項目。

We ended Q3 with 1,428 stores and total selling square footage of 33 million. Capital expenditures for the quarter were $15 million compared to $38 million last year. Depreciation expense in the quarter was $33.1 million, down $4 million for the same period last year.

截至第三季度，我們擁有 1,428 家商店，總銷售面積為 3,300 萬平方米。本季的資本支出為 1500 萬美元，而去年為 3800 萬美元。該季度折舊費用為 3,310 萬美元，比去年同期減少 400 萬美元。

We ended the quarter with $46.6 million of cash and cash equivalents and $533 million of long-term debt. At the end of Q3 2022, we had $62.1 million of cash and cash equivalents and long-term debt of $459.9 million. Our debt position at the end of Q3 reflects the impact of the completion of the sale leaseback on our California DC and 23 owned stores.

截至本季末，我們的現金和現金等價物為 4,660 萬美元，長期債務為 5.33 億美元。截至 2022 年第三季末，我們擁有 6,210 萬美元的現金和現金等價物，以及 4.599 億美元的長期債務。我們第三季末的債務狀況反映了售後回租的完成對我們加州特區和 23 家自營商店的影響。

Turning to the outlook, we continue to expect sales comps to improve sequentially in the fourth quarter into the down high single digit range as our key merchandising and marketing actions continue to gain traction and as we lap easier comparisons. The 53rd week is expected to contribute approximately 400 basis points of sales benefit compared to the fourth quarter of 2022. This benefit will be partially offset by a net decrease in store count, which will have an unfavorable impact of approximately 300 basis points on sales.

談到前景，我們繼續預計第四季度的銷售業績將連續改善，進入較低的個位數區間，因為我們的關鍵銷售和行銷行動繼續獲得關注，並且我們進行了更容易的比較。與2022年第四季相比，第53週預計將貢獻約400個基點的銷售效益。這項效益將被商店數量的淨減少部分抵消，這將對銷售產生約300個基點的不利影響。

With regard to gross margin, we continue to expect our fourth quarter gross margin rate to improve and to be around 38% driven by reduced markdown activity, lower freight costs, and cost reduction and productivity initiatives. For Q4, we expect SG&A dollars to be down low single digits versus 2022. This includes approximately $8 million of rent expense related to the sale leaseback, which will be partially offset by lower depreciation depreciation of around $1.1 million. We expect interest expense to be approximately $8 million in Q4, slightly ahead of last year.

就毛利率而言，我們繼續預計第四季度毛利率將有所改善，在降價活動減少、貨運成本降低以及成本削減和生產力舉措的推動下達到 38% 左右。對於第四季度，我們預計 SG&A 美元將比 2022 年下降低個位數。這包括與售後回租相關的約 800 萬美元的租金費用，這將被約 110 萬美元的折舊降低部分抵消。我們預計第四季的利息支出約為 800 萬美元，略高於去年。

With regard to CapEx, we continue to expect around $75 million for the year. We have opened 15 stores in 2023, including three in the fourth quarter to date and expect 48 closures with the closures heavily concentrated in this quarter. We currently expect for store openings in 2024, three of which were projects originally slated for 2023 to which we were already committed and one due to a relocation of a store where we are losing our lease in general on a new store commitments remain on hold until our business situation improves.

關於資本支出，我們繼續預期今年資本支出約為 7,500 萬美元。我們在 2023 年開設了 15 家門市，其中 3 家是在第四季度開設的，預計將關閉 48 家門市，其中關閉數量主要集中在本季度。我們目前預計2024 年將開設門市，其中三個是原定於2023 年開業的項目，我們已經承諾了這一項目，還有一個是由於商店搬遷，我們在新店承諾中總體上失去了租約，但仍處於擱置狀態，直到我們的業務狀況有所改善。

We expect full year depreciation of around $140 million including approximately $36 million in Q4. We expect a share count of approximately 29.3 million for Q4. We expect Q4 total inventory to be down mid teens, representing a very favorable spread to sales as we continue our aggressive approach to managing inventory levels. Again, all of our commentary on Q4 excludes the potential impact of impairment charges and other items, including distribution center closure costs, gains on the sale of real estate and related expenses and consulting fees related to Project Springboard. We expect the 53rd week will benefit our Q4 sales by approximately $65 million and EPS by a few cents.

我們預計全年折舊約為 1.4 億美元，其中第四季折舊約為 3,600 萬美元。我們預計第四季的股票數量約為 2,930 萬股。我們預計第四季度的總庫存將下降到十幾歲左右，這對銷售來說是非常有利的，因為我們將繼續採取積極的方法來管理庫存水準。同樣，我們對第四季度的所有評論均排除了減損費用和其他項目的潛在影響，包括配送中心關閉成本、房地產銷售收益以及與 Springboard 專案相關的相關費用和諮詢費。我們預計第 53 週將使我們第四季的銷售額增加約 6,500 萬美元，每股收益增加幾美分。

I'd now like to turn to spend a few moments to provide more details on our cost reduction and productivity efforts. We have now secured over $100 million of structural SG&A savings in 2023 prior to the initial benefits from from Project SpringBoard. Overall, we are progressing in line with plan on Project Springboard, which we expect to drive 2$00 million or more of bottom line benefits across SG&A and gross margin, approximately 40% of the Project SpringBoard benefits are expected to come from cost of goods sold 40% from other gross margin, driving activities such as inventory optimization, pricing and promotions, and 20% from SG&A savings in store and field operations, supply chain and general office. We expect a high proportion of this broad Project SpringBoard benefits we realized in 2024.

現在我想花一些時間提供有關我們降低成本和提高生產力工作的更多細節。在從 SpringBoard 專案中獲得初步收益之前，我們已在 2023 年實現了超過 1 億美元的結構性 SG&A 節省。總體而言，我們正在按照 Springboard 專案的計劃取得進展，我們預計該專案將在 SG&A 和毛利率方面帶來 2 億美元或更多的底線收益，預計 SpringBoard 專案收益的約 40% 將來自銷售商品成本40% 來自其他毛利率，用於推動庫存優化、定價和促銷等活動，20% 來自商店和現場營運、供應鏈和綜合辦公室的SG&A 節省。我們預計 SpringBoard 計畫的廣泛收益將在 2024 年實現。

Turning to liquidity, we ended the quarter with $258 million of net liquidity despite the seasonal use of cash in Q3 as we build inventories ahead of the holiday season, we are comfortable with our position coming into the fourth quarter and expect to generate substantial free cash flow in the quarter.

談到流動性，儘管在第三季度季節性使用現金，但我們在假期季節之前建立庫存，但本季末我們的淨流動性為2.58 億美元，我們對進入第四季度的狀況感到滿意，並預計將產生大量自由現金本季的流量。

With regard to working capital, we are working towards a step change in how we manage inventory turns targeting an improvement of 15% to 20% over the next year and more over time, a few items to cover as it relates to our sale leaseback transaction. The transaction completed in the third quarter encompassed our Apple Valley, California distribution center and 23 owned store locations, generating proceeds of $306 million.

關於營運資金，我們正在努力改變管理庫存週轉的方式，目標是明年提高 15% 至 20%，隨著時間的推移，需要涵蓋一些與我們的售後回租交易相關的項目。第三季完成的交易涵蓋了我們位於加州蘋果谷的配送中心和 23 家自營商店，收益達 3.06 億美元。

We used $101 million of the proceeds to fully pay down the synthetic lease on the Apple Valley distribution center, and a further $4 million to pay closing expenses and taxes. The balance of the proceeds provided us with additional liquidity to support our ongoing operations. We will continue to evaluate other asset monetization opportunities, including six remaining owned store locations our Columbus headquarters building and other assets, which combined we believe would have a monetizable value over $100 million. We will disclose more details on the accounting for the sale leaseback in our upcoming 10 Q filing. For book purposes, we will need to straight-line the rent and make other adjustments, which will create an initial annual incremental net rent expense for approximately $33 million, which will be partially offset by an initial annual reduction of approximately $4 million in depreciation expense and approximately $21 million in lower interest expense at current rates resulting from debt paydown. I will also note that through Q1 of this year, we were incurring rent expense on a synthetic lease on the Apple Valley distribution center. Since the synthetic lease rent expense was $6.3 million for the 2022 fiscal year, including $2.3 million in Q4 of 2022 and $2.3 million in Q1 2023, from which points in load synthetic lease payments were reclassified as interest expense until the essence and the synthetic lease was fully paid down on completion of the sale lease back in August. As a result, not all of the sale lease back rent is incremental.

我們用所得收益中的 1.01 億美元全額支付了 Apple Valley 配送中心的綜合租賃費用，另外 400 萬美元用於支付結算費用和稅金。所得款項餘額為我們提供了額外的流動性以支持我們的持續營運。我們將繼續評估其他資產貨幣化機會，包括我們哥倫布總部大樓剩餘的六個自有商店地點和其他資產，我們相信這些資產加起來的可貨幣化價值將超過 1 億美元。我們將在即將發布的 10 季度文件中披露有關售後回租會計處理的更多詳細資訊。出於帳面目的，我們需要對租金進行直線調整併進行其他調整，這將產生約 3300 萬美元的初始年度淨租金支出增量，這將被初始每年約 400 萬美元的折舊費用減少所部分抵消按當前利率計算，由於償還債務，利息支出減少約2,100 萬美元。我還要指出的是，今年第一季度，我們在蘋果谷配送中心的綜合租賃中產生了租金費用。由於2022 財年的綜合租賃租金費用為630 萬美元，其中包括2022 年第四季的230 萬美元和2023 年第一季的230 萬美元，從這些點起，綜合租賃付款額被重新分類為利息費用，直到實質內容和綜合租賃費用被重新分類為利息費用。八月銷售租賃完成後，已全額付款。因此，並非所有售後租賃租金都是增量的。

Turning back to overall outlook, we will believe we are in a strong position to return the Company to growth and profitability as we continue to execute on our five key actions, we have made significant progress in lowering our costs, managing capital and bolstering our balance sheet. As a result, we remain confident we can weather a continued period of macro-driven driven challenges until then as our turnaround continues to gain traction. I will now turn the call back over to Bruce.

回到整體前景，我們相信，隨著我們繼續執行五項關鍵行動，我們有能力使公司恢復成長和獲利，我們在降低成本、管理資本和加強平衡方面取得了重大進展床單。因此，我們仍然有信心能夠經受住宏觀驅動的持續挑戰，直到那時我們的扭虧為盈繼續獲得動力。我現在將把電話轉回布魯斯。

Thank you, Jonathan. So to sum it up, our trajectory continues to improve and we delivered in the face of the challenging consumer environment, it's becoming more evident that the key drivers of our improvement are the five key actions which will enable us to return to growth and profitability over time. In the meantime, we are well-positioned to weather prolonged macroeconomic challenges due to our aggressive actions to strengthen our balance sheet.

謝謝你，喬納森。總而言之，我們的發展軌跡持續改善，面對充滿挑戰的消費者環境，我們取得了成果，越來越明顯的是，我們改進的關鍵驅動因素是五項關鍵行動，這些行動將使我們能夠在時間。同時，由於我們採取積極行動加強資產負債表，我們已準備好應對長期的宏觀經濟挑戰。

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

我現在將把電話轉回給主持人，以便我們可以開始解決您的問題。謝謝。

Joe Feldman with Telsey Advisory. Please proceed with your question.

特爾西諮詢公司的喬·費爾德曼。請繼續你的問題。

Because that. My second question, I'm wondering to get a little more understanding of the hiring of Seth marks to run the extreme value. And I guess how does that fit in with the chief, your Chief Merchandising Officer. And because I know you I think you said that's going to be reporting to you, but will he have a different buying group or how will that work mechanically, I guess, within the organization to improve the merchandising and the closeout side of things?

因為那個。我的第二個問題，我想對聘請賽斯馬克來運行極值有更多的了解。我猜想這與首席行銷長（首席行銷長）的關係如何。因為我認識你，我想你說過這將向你匯報，但他會有不同的採購團隊嗎？或者我想，在組織內部，這將如何機械地工作，以改善商品推銷和收尾方面的工作？

And good morning, Joe, this is Bruce. I'll take that question. We're really excited about SAP. Mark's joining the company. As we mentioned in our opening remarks, he brings a lot of great experience from the extreme value sourcing, INDUSTRY close-outs and was with us years ago when Big Lots was the leader in that area and he is going to join our team actually next week. He is going to lead a continuing on ground continuously growing group of close-out buyers. He'll have a matrix reporting relationship with Margarita agenda and Tony, our Chief Merchant and myself and the and the embedded close-out buyers under that DMM structure and that type of sourcing, as you probably know, is a little bit different than just some of the other sourcing we do for never out type of product as well as some of the (unk), our off-price type of sourcing we get from factories across the across the globe, and it requires relationship building, and we've been building that. So bringing in SAP he'll add a lot of value to it. One of the main reasons he'll be reporting to me is to get very quick decision making capability how many times these deals require 24, 48 hour turns and getting the finances right, making sure the supply chain and all those things can coordinate. And so that just gives some faster access to making the deal get done, but Margarita sets and I will be glued to our reps getting this done, and we're really excited about what it can bring.

早安，喬，我是布魯斯。我來回答這個問題。我們對 SAP 感到非常興奮。馬克加入公司。正如我們在開場白中提到的，他從極端價值採購、行業收尾中帶來了很多豐富的經驗，幾年前，當Big Lot 是該領域的領導者時，他就和我們在一起了，他接下來實際上將加入我們的團隊星期。他將領導一個持續成長的實地買家群體。他將與瑪格麗塔議程和托尼、我們的首席商人和我本人以及在 DMM 結構下嵌入的結束買家建立矩陣報告關係，正如您可能知道的那樣，這種採購類型與僅僅有點不同我們為永不過時的產品進行的其他一些採購以及我們從全球各地的工廠獲得的一些（unk）、折扣類型的採購，這需要建立關係，我們已經一直在建造那個。因此，引入 SAP 將為他增加許多價值。他向我報告的主要原因之一是獲得非常快速的決策能力，這些交易需要 24、48 小時週轉多少次，並確保財務正確，確保供應鍊和所有這些事情能夠協調。這樣就可以更快地完成交易，但瑪格麗塔和我將密切關注我們的代表完成這項工作，我們對它能帶來什麼感到非常興奮。

As we mentioned in the opening remarks, we're already at 50% penetration on bargains, which are great value against most retailers. And now we're really focusing on this extreme bargains were set plays his third generation and his family doing this business. And we've seen and we believe it will accelerate that penetration as well.

正如我們在開場白中提到的，我們的特價商品滲透率已經達到 50%，這對大多數零售商來說都是非常有價值的。現在我們真正關注的是他的第三代和他的家人從事這項業務所設定的極端便宜貨。我們已經看到並相信它也會加速這種滲透。

Thank you. And maybe just as a quick follow-up on how are you guys, you mentioned food and consumables and you're maybe missing the mark a little bit there and having some opportunity to improve. And I guess in the strategy in food and consumables, seems like it's changed a little bit over the past couple of years. And I'm just curious what your how you view that fitting in going forward.

謝謝。也許只是為了快速跟進你們的情況，你們提到了食物和消耗品，你們可能有點沒有達到目標，並且有一些改進的機會。我想在食品和消費品方面的策略在過去幾年中似乎發生了一些變化。我只是好奇你如何看待這種適合未來的發展。

We like the food and consumables marketplace right now as peers compare a fiercely competitive marketplace and for us to be able to compete better in very much requires us to get more extreme bargains, close outs if you will, high quality closeouts, we weren't as aggressive in pursuing those in the quarters before Q. three, we have changed our stance on that. We're making room for our open to buy in those areas has increased, and we've got a team working on it and that should start changing this quarter. And we've got new leadership leading food in that respect as well focused on that, which is really important for us to differentiate ourselves in food, especially with extreme value better than the leading price retailers and the grocery stores. And we have every ability to do that. Seth will play a big part in that as well and out. And the other way we differentiate ourselves is having more of a manufacturer label a good value compared to a national brand, but we'll also have national brands for consistency of shop, but we're changing the mix to be much better value assortment and still good good quality and that will start changing. It is changing already, and we'll start seeing the effects of that in the middle of Q4.

我們現在喜歡食品和消費品市場，因為同行比較競爭激烈的市場，為了我們能夠更好地競爭，我們需要獲得更極端的討價還價，如果你願意的話，可以清倉，高質量的清倉，我們沒有在第三在季度之前的幾個季度中，我們積極追求這些目標，但我們已經改變了對此的立場。我們正在為這些領域的開放購買空間增加，我們有一個團隊致力於此，這應該會在本季開始改變。我們在這方面有了領導食品的新領導層，並專注於這一點，這對於我們在食品方面脫穎而出非常重要，尤其是比領先價格零售商和雜貨店更好的極端價值。我們完全有能力做到這一點。賽斯也將在其中發揮重要作用。我們與眾不同的另一種方式是，與全國品牌相比，更多的製造商標籤具有良好的價值，但我們也將擁有全國品牌，以確保商店的一致性，但我們正在改變組合，以提供更好的價值分類和品質仍然很好，而且這種情況將會開始改變。它已經在改變，我們將在第四季度中期開始看到其影響。

Our next question is from the line of Brad Thomas with KeyBanc Capital Markets. Please proceed with your question.

我們的下一個問題來自 KeyBanc Capital Markets 的 Brad Thomas。請繼續你的問題。

Good morning, Tom, I wanted to first ask about gross margin. That's been a nice bright spot for the Company.

早安，湯姆，我想先問一下毛利率。這對公司來說是一個很好的亮點。

And Jonathan, I was hoping you could just give us a little more context about maybe how much more runway you think there is as we look out for next year in terms of the benefits from the container rates and some of the more disciplined markdowns.

喬納森，我希望你能給我們更多的背景信息，告訴我們你認為明年還有多少跑道，因為集裝箱費率和一些更嚴格的降價帶來的好處。

Yes, hey, good morning, Brad. Yes, we feel really good about the progress we're making on gross margin, a big sequential step up nice PTO to last year and our initial guidance coming into the quarter, we continued to see a nice freight benefit through Q3 and also a significant benefit from lower markdowns, particularly on seasonal, which, as you recall, were a big drag on margins earlier in the year. So we're really pleased to see that story holding and coming together as we go through the year and Q4 will continue to get year-over-year. Freight benefit will also get another benefit from lower markdowns in Q4. And then in the first half of 24, we will continue to see a fairly significant year-over-year freight benefit. The rates that we were paying in the spring of this year was still elevated relative to where we are today. So back over the next year, that will probably sort of even out. But the first half of the year, we should see a nice benefit. So we're expected to be at 38% in the fourth quarter. We think we're going to make good progress back towards 40% in 2024, and we won't get all the way there in 24, but we think we'll make further progress relative to where we were for the full year as a whole in 2023. So we feel good about the progress we're making on gross margin.

是的，嘿，早安，布拉德。是的，我們對毛利率方面取得的進展感到非常滿意，與去年相比，PTO 取得了很大的連續進步，並且我們進入本季度的初步指導，我們在第三季度繼續看到良好的貨運效益，並且也取得了顯著的進展。受益於較低的降價，特別是季節性降價，正如您所記得的那樣，這在今年早些時候對利潤率造成了很大的拖累。因此，我們真的很高興看到這個故事在我們度過這一年的過程中繼續發生並聚集在一起，並且第四季度將繼續逐年增長。貨運收益也將受益於第四季較低的降價。然後在24年上半年，我們將繼續看到相當顯著的年比貨運效益。與今天相比，我們今年春季支付的利率仍然較高。因此，明年，這種情況可能會趨於平衡。但今年上半年，我們應該會看到不錯的效益。因此，我們預計第四季度的成長率為 38%。我們認為，到 2024 年，我們將朝著 40% 的方向取得良好進展，而且我們不會在 24 年內完全實現這一目標，但我們認為，相對於全年的情況，我們將取得進一步的進展。過程將在2023 年完成。因此，我們對毛利率的進展感到滿意。

Yes, freight has been a really nice tailwind, but also getting markdowns down significantly. It's been has been really important.

是的，貨運確實是一個很好的推動力，但降價也大幅下降。這真的非常重要。

That's very helpful, Jonathan, thank you. And Bruce, if I could just follow up on some of the merchandising evolution and the deals and bargains that you're offering now, can you talk a little bit more about maybe how much you want the merchandise assortment to change over the next six to 12 months, which categories you're most focused on driving the deals. And then when you give us these percentages for the percentage of the business that's quick deals from, can you describe just a little bit more how much is really true close out versus product that's being manufactured just for you.

這非常有幫助，喬納森，謝謝你。布魯斯，如果我能跟進一些商品的演變以及您現在提供的交易和討價還價，您能多談談您希望商品種類在未來六年內發生多大變化嗎？在 12 個月內，您最關注推動交易的類別。然後，當您向我們提供快速交易的業務百分比時，您能否再多描述一下，與專門為您製造的產品相比，真正真正的成交量有多少。

Yes, Brad, look, the a the more that we can move our assortment to an off-price Comvalue, the better we'd like to move as much of it as possible. We set a goal this year to be a third of our assortment and in the bargain category, which means that we're beating most of our reference competitors in those prices that we have, we actually are trending, as you saw, up nearly 50%. So we've blown by that and we'll take that as high as we can get it really when I think about our assortment and margaritas, well, it's about having that clear value assortment at a great price points and then also having a mix of a collective, the collective items that are differentiated in our home categories and through furniture margins, margins are harder to shop and comp we've got a great value assortment. We always had a great value assortment there, but we're leaning into that even more and focusing on our goods, our better and best mix there over the over the time of COVID. And the inflation are good, had good selection, got a little bit out of whack, and we've had to restore those opening price points over the course of 2023. And we've made great progress. We've upgraded the quality across across our furniture items. I've just got a great assortment out there. So when I think about it. I'd love to see the store be a comp store in almost every respect and be differentiated with the with exciting quality products with Turning to the extreme value or the extreme bargain penetration that gets it, that gets into a definition that the prices will have on those types of items will not just be better than most other retailers or reference retailers, our competitive set, if you will, but better than the price leaders in the industry, much better than them. And so that gets into the type of extreme close out that we used to be known for. And so we want to get that penetration growing. When I joined the Company, that penetration was less than 10% back in late 2018 during the pandemic have dropped to mid-single digits, and it was only in food and consumables because of CPG companies just couldn't provide that type of as I close out during those times. So now we've we've grown that. We believe it's a it's back up to two and above where where we were and we want to double if not more than that and continue to expand our competitiveness in those areas as well. So we're excited about it. We're now curating it better in their store on end caps and the drive aisles on the furniture pad, putting those types of items right out front and center, our Customer Value Index continues to improve. As we do this, it's giving us more content to message to our customer segmentation. That has been much refined by our great marketing team. And so we feel like we'll just keep building on this. And, you know, it's one of the reasons why our margins improving to as we as we have these Comvalue items and a gross penetration in our box.

是的，布拉德，你看，我們越能將我們的品種轉移到低價 Comvalue，我們就越願意轉移盡可能多的商品。我們今年設定的目標是，我們的產品種類達到三分之一，並且屬於便宜貨類別，這意味著我們在價格方面擊敗了大多數參考競爭對手，正如您所看到的，我們實際上趨勢是上漲了近50% %。因此，當我想到我們的品種和瑪格麗塔酒時，我們對此感到震驚，我們會盡可能地做到這一點，嗯，這是關於以優惠的價格擁有清晰的價值品種，然後再進行混合就一個集體而言，我們的家居類別中的集體物品有所不同，透過家具利潤，利潤更難購買和比較，我們有一個有價值的品種。我們在那裡一直有很有價值的品種，但我們更傾向於這一點，並專注於我們的商品，在新冠疫情期間我們在那裡更好、最好的組合。通貨膨脹很好，有很好的選擇，但有點不正常，我們必須在 2023 年恢復這些開盤價。我們已經取得了很大進展。我們提升了家具產品的品質。我那裡有各種各樣的東西。所以當我想到這一點時。我很高興看到這家商店在幾乎所有方面都成為一家比較商店，並通過令人興奮的優質產品脫穎而出，轉向極端價值或極端討價還價滲透，這進入了價格的定義在這些類型的商品上，不僅比大多數其他零售商或參考零售商（我們的競爭產品）更好，而且比行業中的價格領導者更好，比他們好得多。這就進入了我們過去所熟知的極端接近類型。因此，我們希望提高滲透率。當我加入公司時，2018 年底疫情期間的滲透率還不到 10%，已降至中個位數，而且僅在食品和消費品領域，因為 CPG 公司無法提供我所了解的此類產品。在那段時間關閉。所以現在我們已經成長了。我們相信，它已經恢復到原來的兩倍或以上，我們希望翻倍（如果不是更多的話），並繼續擴大我們在這些領域的競爭力。所以我們對此感到興奮。我們現在在他們的商店中更好地策劃家具墊上的端蓋和驅動通道，將這些類型的物品放在前面和中心，我們的客戶價值指數不斷提高。當我們這樣做時，它為我們提供了更多內容來向我們的客戶群傳達訊息。我們優秀的行銷團隊對此進行了極大的改進。所以我們覺得我們會在此基礎上繼續發展。而且，你知道，這就是我們的利潤率隨著我們擁有這些 Comvalue 商品和盒子中的總滲透率而提高的原因之一。

Back to Jonathan's earlier answer to your question, it gives us less reason to have to mark down. And so we are becoming well known to be a place she can trust for extreme value all the time.

回到喬納森之前對你的問題的回答，它讓我們更有理由必須標記。因此，我們逐漸成為她始終可以信賴並提供極高價值的地方。

That's very helpful. Thank you, Bruce, and good luck this holiday season.

這非常有幫助。謝謝你，布魯斯，祝這個假期好運。

Our next questions are from the line of Kate McShane with Goldman Sachs. Please proceed with your question.

我們的下一個問題來自高盛的 Kate McShane。請繼續你的問題。

Hi, thank you. Good morning and thanks for taking our questions. I wondered if you could talk a little bit about the cadence of the quarter, what the comps were by month, how you saw traffic progress and how you're thinking about traffic specifically for the fourth quarter?

嗨，謝謝你。早安，感謝您提出我們的問題。我想知道您是否可以談談本季的節奏、每月的比較情況、您如何看待流量進展以及您如何考慮第四季度的流量？

Hi, Kate. This is Bruce, and I'm sure Jonathan will add a lot more color, but we're pleased to see the comps in Q3 gets sequentially better from August through October. And what's more is through November, they continue to see that sequentially improve and traffic as well. So we're pleased with the things we're doing with momentum to go is going in the right direction. Our five key actions are working, how the teams run together very nicely and the customers responding to the value assortment we're providing you covered it, Bruce.

嗨，凱特。這是布魯斯，我相信喬納森會添加更多的色彩，但我們很高興看到第三季的比較從八月到十月連續變得更好。更重要的是，到了 11 月，他們繼續看到流量和流量都在持續改善。因此，我們對正在做的事情感到高興，並有動力朝著正確的方向前進。我們的五個關鍵行動正在發揮作用，團隊如何很好地合作，以及客戶對我們為您提供的價值組合的反應，布魯斯。

And then we wanted to follow up with the second question with regards to furniture, you mentioned you're lapping the closure of the furniture manufacturer, but we were wondering if furniture inventories are back to normalized levels and if not, when will they return to normalized levels? And can you talk to that big ticket discretionary demand and if you have seen any kind of stabilization and within furniture for the bigger ticket?

然後我們想跟進有關家具的第二個問題，您提到您正在關閉家具製造商，但我們想知道家具庫存是否恢復到正常水平，如果沒有，什麼時候會恢復到正常水平標準化水平？您能否談談大宗可自由支配的需求，以及您是否看到任何形式的穩定以及家具內部的大宗需求？

Okay. Maybe I'll take the first piece and I think Bruce will become in.

好的。也許我會選擇第一首，我想布魯斯會加入。

So in terms of furniture, yes, both in terms of the level of firm trim-a-tree and the assortment, we feel much better than we felt for a long time. We're really pretty much back to where we'd like to be. And that's important coming into the fourth quarter because as you know, we just lapped the closure of United Furniture and that didn't have an immediate impact. But by the time we got into January of last fiscal year, we're starting to have a pretty significant impact, which then continued certainly into Q1 and Q2 and really only now we kind of fully mitigated that. So that will be a tailwind for us, particularly as we get to January. But even prior to that, we feel much better about our furniture assortment that we have for a while, and the level of inventory is appropriate.

因此，就家具而言，是的，無論是在修剪樹木的強度還是在品種方面，我們的感覺都比長期以來的感覺要好得多。我們真的已經回到了我們想要的狀態。這在第四季度非常重要，因為如您所知，我們剛剛關閉了聯合家具公司，但這並沒有立即產生影響。但到上一財年一月時，我們開始產生相當重大的影響，然後這種影響肯定會持續到第一季和第二季度，直到現在我們才完全緩解了這種影響。因此，這對我們來說將是一個順風車，特別是當我們進入一月份時。但即使在此之前，我們對暫時擁有的家具品種感覺好多了，庫存水準也合適。

And we started to see some good momentum improvement in furniture as we referenced in the prepared remarks, and I'll just add that, you know, having Broyhill back is is great. Going into Q4, 75% of Broyhill upholstery was new. We had strong promotional support for the new Broyhill, our campaign in Q3 that resonated well gave us strength into Q4. I have to read through to just stated, we have seven core collections and six monitor collections and new new styles coming in late in the fall. That's just been a great thing to have come back. And like I said earlier of just having the opening price points and a strong good position and a better and stronger, better and best position and furniture is starting to resonate with her with our customers. We're starting to see some nice upticks in that regard.

正如我們在準備好的評論中提到的那樣，我們開始看到家具方面出現了一些良好的勢頭改善，我只想補充一點，你知道，布羅伊希爾回來真是太棒了。進入第四季度，布羅伊希爾 75% 的內部都是新的。我們為新的 Broyhill 提供了強有力的促銷支持，我們在第三季度的活動引起了良好的反響，為我們進入第四季度提供了動力。我必須仔細閱讀剛才所說的，我們有七個核心系列和六個顯示器系列以及將於秋季末推出的新款式。回來真是一件偉大的事。正如我之前所說，只要擁有開盤價、強大的良好地位以及更好、更強、更好、最好的地位和家具，她就開始與我們的客戶產生共鳴。我們開始看到這方面出現了一些不錯的成長。

Yes, yes.

是的是的。

Our next questions come from the line of Peter Keith with Piper Sandler. Please proceed with your question.

我們的下一個問題來自彼得·基思和派珀·桑德勒的對話。請繼續你的問題。

Hey, good morning, everyone. I'm just looking at Project SpringBoard. You've got the $100 million of cost takeouts in SG&A that are complete. I guess I was hoping you could talk a bit more about the the additional cost takeouts that are more COGS and gross margin focused. Are there any early signs of success there as those seem a bit more operational in nature?

嘿，大家早安。我只是在關注 SpringBoard 專案。您已完成 SG&A 中 1 億美元的成本支出。我想我希望你能多談談更多關注銷貨成本和毛利率的額外成本支出。是否有任何成功的早期跡象，因為這些看起來本質上更具操作性？

Yes, Peter, I'll jump in on that one.

是的，彼得，我會參與其中。

So there were really two separate things that $100 million plus of SG&A savings we generated in 2023, which, as you noted, is complete, we will come in above that number going to come in above that number. And we're really pleased with the results of those efforts. You see that showing up in our SG&A, which was down mid-single digits in each of Q2 and Q. three, we guided to down low single digits in Q4. But don't forget there's an extra week of expense in there as well as a full quarter of the sale leaseback expense or one handle on an underlying basis in Q4, SG&A is going to be down more like high-single digits. So we feel really good about that progress we made an important point is Project SpringBoard is then completely on top of all of that, we were expecting a further $200 million of benefit from Project SpringBoard. We have got some of that in Q3 and Q4, probably about $20 million between the two quarters, mainly factoring into SG&A, but some of it getting into into gross margin. And then as we as we talked about in the script, the $200 million is about 40% COGS, 40% of the gross margin impact and about 20% SG&A, and we expect to realize a majority of that in fiscal 2024. There's a couple of hundred different initiatives that there are many individual work streams that I won't go into detail on them, but there are many different initiatives. We have work closely with an external partner, as you know, and we're really happy about the progress we're making still still a lot of work to do, but we've already approved a significant number of projects that will go a long way towards hitting our goal of a majority of the $200 million hitting 2024.

因此，我們在 2023 年節省了 1 億美元的 SG&A 節省，這實際上是兩個獨立的事情，正如您所指出的，這已經完成，我們將超過這個數字。我們對這些努力的結果感到非常滿意。您可以看到，我們的銷售管理及行政管理費用（SG&A）在第二季和第三季均下降了中個位數，我們指引第四季下降了低個位數。但不要忘記，其中還有額外一周的費用以及整個季度的售後回租費用或第四季度基礎上的一個處理，SG&A 將下降得更像是高個位數。因此，我們對我們所取得的進展感到非常滿意，重要的是 SpringBoard 專案完全超越了所有這些，我們預計 SpringBoard 專案還會帶來 2 億美元的收益。我們在第三季和第四季獲得了其中的一部分，兩個季度之間可能約為 2000 萬美元，主要計入 SG&A，但其中一些計入毛利率。然後，正如我們在腳本中討論的那樣，2 億美元約佔 COGS 的 40%、毛利率影響的 40% 以及 SG&A 的約 20%，我們預計將在 2024 財年實現其中的大部分。在數百在不同的舉措中，有許多單獨的工作流程，我不會詳細介紹它們，但有許多不同的舉措。如您所知，我們與外部合作夥伴密切合作，我們對所取得的進展感到非常高興，仍然有很多工作要做，但我們已經批准了大量項目，這些項目將在距離2024 年實現2 億美元的大部分目標還有很長的路要走。

Okay. And then you, Jonathan, that you had also referenced plans for a targeted 15% to 20% inventory reduction over the next year. I was hoping you could provide a little more insight on what you guys are working on for that level of reduction. And then just to push back on it, I guess wouldn't the push to greater extreme value and closeouts actually create greater inventory and working capital commitments on a bigger base?

好的。然後，喬納森，您還提到了明年目標庫存減少 15% 至 20% 的計劃。我希望你們能夠更深入地了解你們為實現這一程度的減少所做的工作。然後只是反駁一下，我想推動更大的極端值和清倉實際上不會在更大的基礎上創造更大的庫存和營運資本承諾嗎？

Yes, it's a fair point. And second point, Peter, and actually we've previously been targeting targeting a somewhat higher increase in turns. So we've soften that a little bit to allow for the fact that the close our model may require some additional working capital investment. So you're absolutely right about that. I think when we look at our turn goals relative to where we've been historically, 15% improvement would be sort of kind of getting us back into that kind of zone. Some of the things from Project SpringBoard will influence that in terms of effectiveness of inventory allocation, where we think there's a significant opportunity there. But overall, we think that is a very realistic goal given our historic turn rates and over time, we'd like to do better than that. But you're absolutely right that from a business model standpoint, as we pivot to extreme bargains and close out, we need to make sure we fully account for that and how we're thinking about it going forward.

是的，這是一個公平的觀點。第二點，彼得，其實我們之前一直致力於提高輪流的增加量。因此，我們稍微軟化了這一點，以考慮到關閉我們的模型可能需要一些額外的營運資本投資。所以你的說法完全正確。我認為，當我們相對於歷史水準來審視我們的回合目標時，15% 的改進將讓我們回到那種區域。 SpringBoard 專案的一些內容將影響庫存分配的有效性，我們認為這方面存在重大機會。但總的來說，考慮到我們歷史上的轉變率，我們認為這是一個非常現實的目標，隨著時間的推移，我們希望做得更好。但從商業模式的角度來看，你絕對是對的，當我們轉向極端便宜並結束時，我們需要確保我們充分考慮到這一點以及我們如何考慮未來。

And I'll just add up as some of the other things helping in that productivity is our ability to now flex assortments in our stores. We've got some stores that obviously are stores that deal with more of the pantry customer in some stores that deal more with the Home Furniture customer. But in the past and those historic churn rates, we've pretty much peanut butter, the the assortment now we're flexing that, that gives us more productivity opportunity and open-to-buy for those close-outs. So all of that coming together produces at 15% to 20%.

我只想補充一下，其他一些有助於提高生產力的因素是我們現在在商店中靈活調整品種的能力。我們的一些商店顯然是與更多食品儲藏室顧客打交道的商店，而另一些商店則與家具顧客打交道更多。但在過去和那些歷史性的流失率中，我們幾乎有花生醬，現在我們正在展示它的品種，這為我們提供了更多的生產力機會和開放購買的機會。所以所有這些加在一起會產生 15% 到 20% 的效率。

I noticed a lot of the colon repeated, which is if you look at the end of Q4, we're guiding to a mid 10s reduction in inventory on a much lower reduction in sales that we're starting to see that meaningful improvement in turn at the end of Q4 this year.

我注意到很多重複的冒號，也就是說，如果你看看第四季度末，我們正在指導庫存減少 10 多歲，而銷售額的減少幅度要小得多，我們開始看到有意義的改善今年第四季末。

Thank you. Our final question today comes from the line of Krisztina Katai, Deutsche Bank. Please proceed with your question.

謝謝。我們今天的最後一個問題來自德意志銀行的 Krisztina Katai。請繼續你的問題。

Brian suggested Taylor on for Kristina. Thanks for taking our question. I was hoping that you could talk a little bit about the new collections in furniture that you've brought in and any initial reads on how that is driving traffic or sales performance in the stores and the team Margarita San Antonio leads just doing an outstanding job once again.

布萊恩建議泰勒代替克里斯蒂娜。感謝您提出我們的問題。我希望您能談談您引進的新家具系列，以及有關如何推動商店客流量或銷售業績的初步讀物，以及瑪格麗塔聖安東尼奧領導的團隊做得非常出色再次。

And we've got a great a great vendor alliance. And with respect to the new Broyhill line, a larger domestic vendor that's great partner along with a handful of others. And what we've brought is the heritage collections back in upgraded quality and style and fashion forward, along with modern styles and the other thing that we've done is added a lot of the teams added a lot of accent furniture, which is really resonating with our customers because it's not ready to assemble, but it's they're out on the out on the floor, great quality, marble tops have very good actual wood type of credentials and things like that. All of that stuff is coming in it and it's at a very good value, off-price value and the customers are are enjoying that the poultry line has gotten much, much better and we're actually seeing the comps in that improve greatly. So we're excited about how we are coming back into into a good stock position with great product that our customers can. I love as Loving and that will only get stronger as we put more time between us, the COVID-19 stimulus nesting pull forward that we saw over the last couple of years. And I'm feel good about the future Thank you.

我們有一個很棒的供應商聯盟。對於新的 Broyhill 系列，一個較大的國內供應商與其他一些供應商都是很好的合作夥伴。我們帶來的是傳統系列，以升級的品質、風格和時尚前衛，以及現代風格，我們所做的另一件事是添加了很多團隊添加了很多特色家具，這真的是與我們的客戶產生共鳴，因為它還沒有準備好組裝，但它們已經在地板上了，質量很好，大理石檯面具有非常好的實際木材類型的證書和類似的東西。所有這些東西都進來了，它的價值非常高，超值，客戶很高興家禽生產線已經變得好多了，我們實際上看到了這方面的競爭大大改善。因此，我們對如何透過客戶能夠提供的優質產品重新獲得良好的庫存狀況感到興奮。我愛如愛，隨著我們之間的時間越來越長，這種愛只會變得更強，過去幾年我們看到的 COVID-19 刺激嵌套拉動。我對未來感覺很好，謝謝。

And then just as a follow up on, you mentioned that that you're seeing a lot of promotional intensity. Can you talk a little bit more about what you're seeing in the promotional environment and with your competition?

然後，作為後續行動，您提到您看到了很多促銷活動。您能多談談您在促銷環境和競爭對手中看到的情況嗎？

I think promotional environment is always intense during this time but up, but we've been able to put front and center our comp value or extreme value. And that's helping us be smarter about promotions when we actually mark down. And so that's seen on customers at the end of the day, they shop everywhere at this point and they're looking for they price and value price quality value combination. I think we're showing a very nicely there. I think our fiercest competition is in pantry and the pantry prices across the board. It's what that's what she needs more than anything right now, especially at the low household income customer level. And that's an area where we're going to compete harder on very deliberately go after extreme value and value offering, and we'll expect to improve those. Are those those categories in short order.

我認為這段時間促銷環境總是很激烈，但我們已經能夠將我們的競爭價值或極端價值放在首位和中心。這有助於我們在實際降價時更明智地進行促銷。因此，最終客戶會看到這一點，他們此時到處購物，他們正在尋找價格和價值、價格、品質和價值的組合。我認為我們在那裡表現得非常好。我認為我們最激烈的競爭是食品儲藏室和食品儲藏室的全面價格。這就是她現在最需要的，特別是在低家庭收入客戶層面。在這個領域，我們將更刻意地追求極端價值和價值提供，我們將期望改進這些。這些類別是短期內的嗎？

Thank you. That does conclude today's teleconference and webcast. A replay of this call will be available. You can access the replay until December 14th by dialing toll-free eight seven seven six six zero six eight five three and enter replay confirmation one three seven four two five one nine, followed by pound sign. The total number is two zero one six one two seven four one five replay confirmation number one three seven four two five one nine, followed by the pound sign. You may now disconnect and have a great day.

謝謝。今天的電話會議和網路廣播到此結束。本次通話將會重播。您可以在 12 月 14 日之前訪問重播，方法是撥打免費電話 87766006853，然後輸入重播確認一三七四二五一九，然後輸入井號。總數字是二零一六一二七四一五重播確認數字一三七四二五一九，後面是英鎊符號。您現在可以斷開連接並度過愉快的一天。

We thank you for your participation.

我們感謝您的參與。