Big Lots Inc (BIG) 2024 Q1 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 first quarter conference call. (Event Instructions) 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 第一季電話會議。 （活動說明）溫馨提示，本次會議正在錄製中。今天與我通話的是總裁兼執行長 Bruce Thorn；喬納森·拉姆斯登（Jonathan Ramsden），執行副總裁、財務長兼行政官。

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。

I would 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 first quarter earnings release presentation and financial information is available at bigots.com/corporate/investors. A question and answer session will follow the prepared remarks. I will now turn the call over to Bruce.

我還想指出，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。第一季財報和財務資訊可在 bigots.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. While we've made substantial progress on improving our business operations in Q1, we missed our sales goal due largely to continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items. The consumer environment softened in the first quarter as both consumer confidence and sentiment has declined since January due in part to concerns about inflation, unemployment and interest rates. Also, personal saving rates have been declining while credit card balances have grown, indicating the pressure our core consumer is under as they tried to manage their strained budget.

大家早安，感謝您加入我們。雖然我們在第一季改善業務營運方面取得了實質進展，但我們未能實現銷售目標，這主要是由於我們的核心客戶的消費支出持續減少，特別是在高價非必需品方面。第一季消費者環境疲軟，消費者信心和情緒自一月份以來均有所下降，部分原因是對通膨、失業和利率的擔憂。此外，個人儲蓄率一直在下降，而信用卡餘額卻在成長，這表明我們的核心消費者在試圖管理緊張的預算時面臨壓力。

We remain focused on managing through the current economic cycle by controlling the controllables, our operational initiatives to offer a large assortment of new and exciting extreme bargains, cut costs and increase productivity exceeded our targets in Q1. This enabled us to improve consumer perceptions about our brand and the value we offer and to deliver a year-over-year improvement in gross margin rate and operating expenses. Despite the significant sales pressure this quarter.

我們仍然專注於透過控制可控因素來管理當前的經濟週期，我們的營運措施提供了大量新的、令人興奮的極端便宜貨，削減成本和提高生產力超出了我們第一季的目標。這使我們能夠改善消費者對我們品牌和我們提供的價值的看法，並實現毛利率和營運費用的同比改善。儘管本季銷售壓力巨大。

We were also pleased with our actions to preserve and enhance liquidity in Q1, which included aggressive efforts to manage OpEx, CapEx, and inventory and the execution of a new $200 million term loan facility, which provides us with significant additional financial flexibility as we move forward. We're taking aggressive actions to drive positive comp sales growth later in the year and grow the year-over-year gross margin rate through the end of this year and into next high, substantially progressing our five key actions.

我們也對第一季維持和增強流動性的行動感到滿意，其中包括積極努力管理營運支出、資本支出和庫存，以及執行新的2 億美元定期貸款安排，這為我們在行動過程中提供了顯著的額外財務彈性。我們正在採取積極行動，推動今年稍後的同銷量積極增長，並在今年年底前將同比毛利率提高到下一個高點，從而實質性地推進我們的五項關鍵行動。

To sum it up, the current financial performance does not yet reflect the stronger business model that we've created through our five key actions, but we expect the fruits of those efforts to become more apparent in the back half of the year. As a reminder, the five key actions are to own bargains to communicate unmistakable values to increase store relevance to win customers for life with our omnichannel efforts and to drive productivity. We remain confident that the five key actions are putting us on the right path to turnaround our business.

綜上所述，目前的財務表現尚未反映出我們透過五項關鍵行動創建的更強大的商業模式，但我們預計這些努力的成果將在今年下半年變得更加明顯。提醒一下，五個關鍵行動是擁有便宜貨、傳達明確的價值觀、提高商店相關性、透過我們的全通路努力贏得終身客戶以及提高生產力。我們仍然相信，這五個關鍵行動將使我們走上扭轉業務的正確道路。

So we still have a lot of work ahead of us. We need to continue to elevate our brand relevance to drive more traffic. So we are moving quickly to achieve 75% bargain penetration and within that, substantially grow our extreme bargain penetration to 50% by year end. Extreme bargains provides significant savings over price leaders and are working as we've seen the sales trend shift favorably in several categories, along with a better gross margin outcome. And we're making it easier for our customers to know we've got these deals through better signings, ads and store layout, along with more effective digital campaigns that are more relevant and inspiring to customers.

所以我們還有很多工作要做。我們需要持續提升我們的品牌相關性以吸引更多流量。因此，我們正在迅速採取行動，以實現 75% 的討價還價滲透率，並在此基礎上，到年底將我們的極端討價還價滲透率大幅提高到 50%。與價格領先者相比，極端便宜的商品可以節省大量費用，我們已經看到銷售趨勢在多個類別中發生了有利的變化，而且毛利率也更好了。我們透過更好的簽約、廣告和商店佈局，以及更有效的數位行銷活動，讓客戶更容易知道我們已經獲得了這些優惠，這些活動對客戶來說更具相關性和啟發性。

Although we've seen solid results out of our extreme bargain offers. Our overall results have been muted due to our high assortment mix in the home furnishing categories for even though we've held share, there has been a significant consumer pullback in big ticket items, particularly within the furniture and patio furniture categories. While most of our store base has healthy unit economics with around 70% of our stores generating positive four-wall adjusted EBITDA. There are still a significant number of underperforming stores that we are working hard to address.

儘管我們已經從我們的超值優惠中看到了可觀的成果。由於我們在家居用品類別中的產品種類繁多，我們的整體業績表現不佳，儘管我們佔有份額，但大件商品的消費者大幅減少，特別是在家具和庭院家具類別中。雖然我們的大多數商店基地都具有健康的單位經濟效益，但我們大約 70% 的商店產生了正的四牆調整後 EBITDA。仍有大量表現不佳的商店需要我們努力解決。

A key part of that work is to realize most of the $200 million of bottom line opportunities through Project Springboard this year. And on that front, we are ahead of schedule. In fact, we are raising our targets to $185 million of cumulative benefits by year end versus $175 million previously. Through the five key actions, which Project Springboard is a significant part of And under the leadership of Kristen Cox, our Chief Stores Officer, who joined in December, we're implementing a simplified store operations strategy focused on investing in talent, operational excellence and improving the customer experience among other things.

這項工作的關鍵部分是今年透過「Springboard 計畫」實現 2 億美元的利潤機會中的大部分。在這方面，我們比計劃提前了。事實上，我們正​​在將年底前累積福利目標提高到 1.85 億美元，而先前為 1.75 億美元。透過五項關鍵行動（Springboard 專案是其中的重要組成部分），在12 月加入的首席門店長克里斯汀·考克斯(Kristen Cox) 的領導下，我們正在實施簡化的門市營運策略，重點關注人才投資、卓越營運和改善客戶體驗等。

Now onto the first quarter results and outlook. There are three key messages I want to convey this morning. First, our Q1 comp sales trends of down 9.9% missed our guidance of down mid-single digits. The monthly trends coincided with volatility in consumer sentiment where February was the weakest month of the quarter with a rebound in March and a deceleration in April to a smaller extent. Weather challenges also unfavorably impacted our sales in February and April. And Q2 to date, comp sales have improved sequentially relative to Q1.

現在談談第一季的業績和展望。今天早上我想傳達三個關鍵訊息。首先，我們第一季的銷售趨勢下降了 9.9%，低於我們下降中個位數的指引。月度趨勢與消費者信心的波動一致，2 月是本季最弱的月份，3 月出現反彈，4 月則出現較小程度的減速。天氣挑戰也對我們二月和四月的銷售產生了不利影響。迄今為止，第二季的銷售額相對於第一季有所改善。

Our gross margin rate in Q1 improved 190 basis points year-over-year, primarily due to lower markdowns, as well as benefits from Project Springboard efforts, but slightly missed our guidance range due to the sales mix. Adjusted SG&A was down 4% versus last year compared with our guidance of down low single digits. Second, we continue to expect quarterly year-over-year gross margin improvements to continue in 2024 and see a path to positive comparable sales in the latter part of the year.

我們第一季的毛利率年增了 190 個基點，這主要是由於降價幅度降低以及 Springboard 專案的努力帶來的好處，但由於銷售組合的原因，毛利率略低於我們的指導範圍。與去年相比，調整後的 SG&A 下降了 4%，而我們的指導則為低個位數。其次，我們繼續預期 2024 年季度毛利率年比將持續改善，並預計在今年下半年實現正可比銷售額。

These improvements will be driven by our five key actions, which will continue to gain momentum, including realizing most of the $200 million-plus of bottom line opportunities through Project Springboard and growing our penetration of bargains and extreme bargains. We exceeded our Q1 targets for Project Springboard. So we're off to a great start this year and have found opportunity to realize more savings in 2024 than we originally planned.

這些改進將由我們的五項關鍵行動推動，這些行動將繼續獲得動力，包括透過 Project Springboard 實現 2 億多美元的利潤機會中的大部分，以及提高我們對特價商品和極端特價商品的滲透率。我們超越了 Springboard 專案第一季的目標。因此，我們今年有了一個良好的開端，並找到了在 2024 年實現比原計劃更多的節省的機會。

In regard to extreme bargains, we exceeded our penetration goal in Q1, and we're accelerating our extreme value sourcing efforts further by resourcing the business with the right talent and an improved infrastructure. In fact, we launched Asia-based buying offices in April, which will enhance our competitiveness to source extreme bargains as well as reduce cost by millions of dollars annually, bringing the operation in-house. We're moving quickly and aggressively to solidify our position as America's discount home store.

在極端便宜方面，我們超越了第一季的滲透目標，我們正在透過為業務提供合適的人才和改進的基礎設施來進一步加速我們的極端價值採購工作。事實上，我們在四月設立了亞洲採購辦事處，這將增強我們採購極其便宜的商品的競爭力，並每年降低數百萬美元的成本，將營運業務納入內部。我們正在迅速而積極地採取行動，以鞏固我們作為美國折扣家居商店的地位。

Third, our efforts to aggressively manage cost inventory, capital expenditures and increase our borrowing capacity have enabled us to grow liquidity through a challenging period. Our net liquidity at the end of the first quarter was $289 million higher than the $254 million in the fourth quarter. While the soft Q1 performance resulted in net use of cash in the quarter, we boosted liquidity with increased borrowing capacity of up to $200 million in April with a new first in last out five-year term loan facility, which is incremental to the borrowing capacity within that $900 million asset-based revolving loan facility.

第三，我們積極管理成本庫存、資本支出和提高借貸能力的努力使我們能夠在充滿挑戰的時期增加流動性。第一季末我們的淨流動性比第四季的 2.54 億美元增加了 2.89 億美元。雖然第一季業績疲軟導致本季現金淨使用，但我們透過新的先入後出五年期定期貸款便利，在4 月份將借貸能力增加至2 億美元，從而提高了流動性，這是藉貸能力的增量在該 9 億美元的基於資產的循環貸款安排中。

While near term conditions have been challenging, we're not slowing down, I'm making progress to transform our business. I'd like now to circle back to highlight some of the recent progress we've made on the five key actions, which will drive momentum in the business. As it relates to our first key action owning bargains, our mix of bargains, which are close-out items, opportunistic buys and other source products where we believe we have a significant comparable price advantage was nearly two-thirds of sales in Q1. So we're well on our way to getting to achieving our goal of 75% by year end.

儘管近期情況充滿挑戰，但我們並沒有放慢腳步，而是在業務轉型方面取得進展。現在我想回顧一下我們最近在五項關鍵行動上取得的一些進展，這些行動將推動業務發展。由於這與我們擁有便宜貨的第一個關鍵行動有關，我們的便宜貨組合（包括平倉商品、機會主義購買和其他我們認為具有顯著可比價格優勢的來源產品）佔第一季銷售額的近三分之二。因此，我們正在順利實現年底前 75% 的目標。

Within that, we offered an expanded assortment of extreme bargains, which represented about 28% of our sales in Q1 and should be 50% by year end. We achieved this by procuring products from over-inventoried and distressed retailers and vendors through new factory direct sourcing partners and exclusive distributors. Our extreme bargain pipeline is growing, and we have sourced the largest amount of extreme bargain closeouts since I've been with the company.

其中，我們提供了更多的極端特價商品，約占我們第一季銷售額的 28%，到年底應該會達到 50%。我們透過新的工廠直接採購合作夥伴和獨家經銷商從庫存過多和陷入困境的零售商和供應商採購產品來實現這一目標。我們的超值特價商品管道正在不斷成長，自我加入公司以來，我們已經採購了最大數量的極值特價清倉商品。

As I mentioned earlier, extreme bargains are already favorably changing the sales trajectory of several departments while also being margin accretive. In fact, the Hearthsong extreme bargain deal resulted in bringing the toy department for negative sales in Q4 to up plus-5% year-to-date with a 900 basis point improvement in gross margin relative to Q4. That sales momentum has carried into May with the plus-25% increase in sales and demonstrates that introducing newness at an extreme bargain can bring positive transformation while simultaneously building margins.

正如我之前提到的，極端便宜已經有利地改變了幾個部門的銷售軌跡，同時也增加了利潤。事實上，Hearthsong 極端特價交易導致玩具部門第四季的負銷售額今年迄今成長了 5%，毛利率較第四季提高了 900 個基點。這種銷售勢頭一直持續到 5 月份，銷售額增長了 25% 以上，這表明以極其便宜的價格推出新品可以帶來積極的轉變，同時增加利潤。

We've seen transactions improve with extreme bargains as well, such as in the grocery category where the skew count has grown and where we're leveraging more everyday low pricing in our assortment. For example, in April, we partnered with a national branded beverage vendor to launch an everyday low price program priced at or better than price leaders, which has driven positive comp growth in beverages since then. The categories with the highest improvement and extreme bargain penetration rates such as grocery and toys, had an average of 1,100 basis point increase in transaction comp trend in Q1 relative to the fall of 2023 and an accretive margin rate.

我們還看到交易量因極端便宜而有所改善，例如在雜貨類別中，偏差數量有所增加，並且我們在品種中利用了更多日常低價。例如，四月份，我們與一家全國品牌飲料供應商合作，推出了每日低價計劃，定價等於或優於價格領先者，此後推動了飲料的積極增長。與 2023 年秋季相比，食品雜貨和玩具等改善程度最高且討價還價滲透率極高的類別在第一季度的交易比較趨勢平均增加了 1,100 個基點，利潤率也不斷增加。

As we move forward, we'll be growing our extreme value penetration with a focus on newness and excitement at exceptional prices while reducing our non-differentiated never out assortments with the aim of making our assortment mix more productive and relevant to customers. Our merchants are laser focused on more breadth and less depth along with more consumer solutions in our assortments. For example, we're rapidly growing our extreme bargain skew count in core grocery and personal care categories. With greater breadth and less depth to create more reasons for customers to frequently visit and take advantage of deals while supplies last, less depth in these categories and more choices allows us to curate a more robust extreme bargain treasure hunt experience.

隨著我們的前進，我們將提高我們的極端價值滲透力，重點關注新穎性和令人興奮的優惠價格，同時減少我們的非差異化永不過時的品種，目的是使我們的品種組合更具生產力和與客戶的相關性。我們的商家專注於更廣度和更少深度以及我們產品種類中更多的消費者解決方案。例如，我們在核心雜貨和個人護理類別中的極端特價商品數量正在迅速增加。透過更大的廣度和更少的深度，為客戶創造更多理由頻繁訪問並利用售完即止的優惠，這些類別的深度更小，選擇更多，使我們能夠策劃更強大的極端便宜尋寶體驗。

We are also providing more consumer solutions by adding new categories of business such as home air filters, portable air conditioners, automotive, fitness, and stationary. In March, we made a series of organizational updates to our merchandising team designed to help the team act quickly operate more efficiently and win in the fast-paced off-price retail environment with a full pipeline of extreme bargains. Our head merchants include Seth Marks, who is focused on food and consumables, as well as the [front end], Kevin Keil, who focuses on soft home and hard home and Shelly Trosclair, who focuses on furniture, [decor], lawn and garden and seasonal.

我們還透過增加家用空氣濾清器、便攜式空調、汽車、健身和文具等新業務類別來提供更多消費者解決方案。 3 月份，我們對銷售團隊進行了一系列組織更新，旨在幫助團隊快速行動、更有效率地運營，並透過完整的超低價產品管道在快節奏的折扣零售環境中獲勝。我們的首席商人包括專注於食品和消費品以及[前端]的Seth Marks、專注於軟家居和硬家居的Kevin Keil以及專注於家具、[裝飾]、草坪和花園和季節性。

All are deeply focused on expanding extreme bargains in the respective categories and acquiring and developing deep close-out experience throughout the ranks. With a highly focused extreme value merchant team that will continue to flex our open-to-buy. We are quickly expanding our relationship with vendors for the bigger seat at the close-out table.

所有人都專注於擴大各自類別的極端討價還價，並在整個隊伍中獲取和發展深厚的結束經驗。擁有高度專注的極值商家團隊，將繼續靈活地開放購買。我們正在迅速擴大與供應商的關係，以獲得更大的成交席次。

As it relates to our second key action communicating unmistakable value. Our recent marketing efforts continue to show promise. Our net customer value perception score improved again in Q1 across all key trip types. This was a result of our increased penetration in extreme bargains and displaying these items more prominently in our end caps and drive out and campaigns such as your deal your day and a friends and family event, select category coupons and bargains to brag about.

因為它關係到我們傳達明確無誤的價值的第二個關鍵行動。我們最近的營銷努力繼續顯示出希望。第一季度，我們所有主要旅行類型的淨客戶價值感知分數再次提高。這是因為我們在極端特價商品中的滲透率不斷提高，並在我們的端蓋和促銷活動中更突出地展示這些商品，例如您的一天優惠和朋友和家人活動、選擇類別優惠券和值得吹噓的特價商品。

Also our top of mind brand awareness and the perception as a discount home store among consumers increased sequentially in April versus January. These are positive steps to getting more traffic and new customers in our stores. Our marketing efforts are focused on driving value perception with bargains and extreme bargains, a key component of our extreme bargains or closeout deals that we call big [buys].

此外，我們的首要品牌知名度和消費者對折扣家居店的認知在四月比一月份連續增長。這些都是為我們的商店吸引更多客流量和新客戶的積極舉措。我們的行銷工作重點是透過特價商品和極端特價商品來推動價值認知，這是我們稱之為「大買」的極端特價商品或清倉交易的關鍵組成部分。

We've increased big [buys] Signage at the store level, launch, new video and digital ads as well as new in-store announcements. We're also increasing dedicated big buyout emails, which are highest engagement e-mails in 2024 to date. We've also been partnering with social media influencers to highlight monthly bargains and buyers through authentic and inspiring bargain shopping content, which has led to a higher engagement rate. We are continuing to leverage promotional tools and processes to help us eliminate non-productive promotions and target our promotional spend, where we will see the greatest return. And we expect to continue to accelerate this program into 2024.

我們在商店層級增加了大型[購買]標牌、發布、新影片和數位廣告以及新的店內公告。我們還增加了專門的大型收購電子郵件，這是 2024 年迄今參與度最高的電子郵件。我們也與社群媒體影響者合作，透過真實且鼓舞人心的特價購物內容來突出每月的特價商品和買家，從而提高了參與率。我們將繼續利用促銷工具和流程來幫助我們消除非生產性促銷，並確定我們的促銷支出目標，這樣我們就能獲得最大的回報。我們預計將繼續加速該計劃到 2024 年。

As it relates to our third key action. We continue to focus on increasing store relevance. We are increasingly featuring extreme bargains in the queue line, drive aisle and endcap. And as we hit critical mass and extreme bargain penetration. We will accelerate our progress in improving consumer value perception and traffic. For example, on the queue line, we have been moving fast to showcase our great bargain items with price points under $10 with increased flexibility on the featured items at the store level. Some recent examples include pet bargains, close-out candy, and water bottles We estimate this to be a $25 million annual opportunity and sales.

因為它涉及我們的第三個關鍵行動。我們繼續專注於提高商店相關性。我們越來越多地在排隊、車道和末端提供極度便宜的商品。當我們達到臨界質量和極端的討價還價滲透率時。我們將加快提升消費者價值感知和流量。例如，在排隊時，我們一直在快速展示價格低於 10 美元的超值特價商品，並在商店層面提高特色商品的靈活性。最近的一些例子包括寵物特價商品、清倉糖果和水瓶。

Our ongoing efforts to flex our assortment to capture customer demand are showing encouraging results. As a reminder, we've been flexing our assortment by increasing inventory and top-performing categories in stores as well as taking inventory out of bottom performing categories in stores, creating whitespace opportunities and optimizing our space with more productive SKUs. We've had recent success with a new statistical model for allocation in our seasonal category, which our test indicates maybe a $20 million annual gross margin benefit will be implementing this model in other categories in Q2.

我們不斷努力調整產品種類以滿足客戶需求，並且取得了令人鼓舞的成果。提醒一下，我們一直在通過增加庫存和商店中表現最好的類別以及從商店中淘汰表現最差的類別中的庫存來靈活我們的品種，創造空白機會並通過更高效的 SKU 優化我們的空間。最近，我們在季節性類別中採用了新的分配統計模型，取得了成功，我們的測試表明，在第二季度的其他類別中實施該模型可能會帶來 2000 萬美元的年毛利率收益。

It also means introducing more bargains, newness and trend right products in our assortment across all categories, new products as a share of total SKUs were up year-over-year in Q1. This is helping as newness at a great bargain, helped drive improvement in our upholstery furniture business as we continue to increase extreme bargain penetration across the enterprise. This will simultaneously increase newness within the assortment.

這也意味著我們在所有類別的產品中引入更多便宜、新穎和潮流的產品，第一季新產品佔總 SKU 的比例同比上升。隨著我們繼續提高整個企業的極端討價還價滲透率，這有助於推動我們的軟體家具業務的改善。這將同時增加品種的新穎性。

As it relates to our fourth key action, we've been improving the customer experience to help us win customers for life. Our goal is to win customers for life by attracting them, retaining them and growing their shopping frequency with us. Our omnichannel platform is a crucial enabler for this and it differentiates us from our off-price peers. As I mentioned earlier, we're implementing a simplified store operation strategy in regard to the talent component, we're focused on investing in training and coaching. We'll improve operational excellence by getting new products to the floor faster, optimizing schedules and tightening processes.

由於這與我們的第四個關鍵行動有關，我們一直在改善客戶體驗，以幫助我們贏得終身客戶。我們的目標是透過吸引、留住客戶並提高他們在我們這裡的購物頻率來贏得終身客戶。我們的全通路平台是實現這一目標的關鍵推動者，它使我們有別於低價同行。正如我之前提到的，我們正在針對人才部分實施簡化的商店營運策略，我們專注於培訓和輔導。我們將透過更快推出新產品、優化時間表和收緊流程來提高卓越營運。

We are emphasizing a customer first culture focused on building loyalty in regards to presentation, we aim to inspire through strong merchandising and present value better on that last note, we're also empowering stores to showcase their best value and most seasonally relevant product at the front of the store, and we can now be extremely agile in our presentations. So far, our stores and customers love the new flexibility. We're continuing to enhance the online experience and showcasing extreme bargain deals through the weekly ad, big bargains and big buy out sections heavily featured on the site.

我們強調顧客至上的文化，專注於在展示方面建立忠誠度，我們的目標是透過強大的商品推銷來激發靈感，並在最後一點上更好地呈現價值，我們還授權商店在商店前面，我們現在可以非常敏捷地進行演示。到目前為止，我們的商店和客戶都喜歡這種新的靈活性。我們將繼續增強線上體驗，並透過網站上的每週廣告、大減價和大買斷部分展示超值優惠。

We remain focused on influencing her home shopping journey through enabling customers to browse more products online and now offer a coming soon preview in store inventory and have started the ability to pre-order for core big ticket items in furniture and seasonal at the end of Q2.

我們仍然致力於透過讓顧客在線瀏覽更多產品來影響她的家庭購物之旅，現在在商店庫存中提供即將推出的預覽，並在第二季度末開始提供家具和季節性核心大件商品的預訂功能。

These four actions will be important traffic drivers in the future. The fifth key action is to drive productivity through structural cost reductions, inventory turns and CapEx efficiency. 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.

這四項舉措將成為未來重要的交通驅動力。第五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, despite the soft consumer environment, we are gaining ground with our five key actions, getting on the path to positive comp sales and growing our gross margin rate every quarter is of critical importance to us and we are moving quickly and aggressively to make it happen. I now will make a few comments on specific category performance in the quarter.

總而言之，儘管消費環境疲軟，但我們正在透過五個關鍵行動取得進展，走上正向銷售的道路並提高每個季度的毛利率對我們至關重要，我們正在迅速採取行動，積極地去實現它。我現在將就本季度特定類別的表現發表一些評論。

Seasonal comps decelerated relative to Q4 on a year-over-year basis as consumers continue to pull back on high ticket discretionary items such as patio furniture and gazebos, customers responded positively to the core items in the seasonal assortments such as Planters, plant stands, tools and other gardening accessories. While big ticket patio furniture and gazebos continue to underperform in Q2, we are taking aggressive promotional action on select underperforming products and will deliver margin rate improvement versus last year for the spring season.

由於消費者繼續減少庭院家具和涼亭等高價非必需品的購買，季節性商品對比第四季度同比有所放緩，消費者對季節性品種中的核心商品反應積極，例如花盆、植物架、工具和其他園藝配件。雖然大件露台家具和涼亭在第二季度繼續表現不佳，但我們正在對部分錶現不佳的產品採取積極的促銷行動，並將在春季提高利潤率。

Our furniture and soft home categories also decelerated sequentially relative to Q4 on a year-over-year basis for the same reasons, we are seeing sequential comp improvement in the furniture business in Q2, driven by a upholstery case goods [decor] mattresses. Hard home accelerated relative to Q4 on a year-over-year basis due to increased bargain offerings, the Hearthsong closeout deal drove a significant improvement in toy sales, providing nearly 50% increase in April and new category sales and swing sets, trampoline, sandboxes and outdoor games and activities.

基於同樣的原因，我們的家具和軟家居類別也相對於第四季度同比連續減速，我們看到第二季度家具業務的業績連續改善，這是由室內裝飾箱商品[裝飾]床墊推動的。由於討價還價產品的增加，硬質家居相對於第四季度同比加速增長，Hearthsong 清倉交易推動了玩具銷售的顯著改善，4 月份增加了近 50%，新類別的銷售以及鞦韆、蹦床、沙盒以及戶外遊戲和活動。

We're also seeing early Q2 sales benefit with newness in automotive, home maintenance, tabletop, and food prep. Therefore, we expect comp sales to improve in the category as 2024 progresses.

我們也看到第二季初期的銷售受益於汽車、家庭維護、桌面和食品準備領域的新產品。因此，我們預計隨著 2024 年的進展，該類別的同類產品銷售額將有所改善。

In food and consumables, comps decelerated sequentially relative to Q4 on a year-over-year basis as we faced fierce competition in these categories. In response, we are focused on accelerating the penetration of extreme bargains, particularly in the food category with more breadth and less depth, which are driving significant improvements and should benefit us going forward.

在食品和消費品領域，由於我們在這些類別中面臨激烈的競爭，與第四季度相比，較去年同期成長速度連續放緩。為此，我們專注於加速極端便宜商品的滲透，特別是在廣度較廣、深度較淺的食品類別中，這正在推動顯著的改進，並且應該有利於我們的未來。

In Q1, we had a 100% increase in skew count in grocery and increased our extreme value skew count and personal care by sevenfold versus last year. For the quarter pet was again a standout performer with positive comp growth, which makes it now [6] out of the past seven quarters of growth aided by the expansion of our assortment in the fall.

第一季度，我們的雜貨品傾斜數量增加了 100%，極值傾斜數量和個人護理品數量比去年增加了七倍。在本季度，寵物再次表現出色，業績正增長，這使其在過去七個季度的增長中[6]擺脫了秋季品種擴張的幫助。

Before handing it over to Jonathan, I'd like to take a moment to once again thank our associates for working hard to drive progress on our key actions and for their hand in helping shape our more simplified and impactful store strategy. I'd also like to thank our vendors for their incredible partnership and support and helping us bring more great bargains to our customers. We look forward to seeing them at our vendor summit in July.

在將其交給喬納森之前，我想花點時間再次感謝我們的員工努力推動我們關鍵行動的進展，並幫助我們制定更簡化和更有影響力的商店策略。我還要感謝我們的供應商提供的令人難以置信的合作夥伴關係和支持，並幫助我們為客戶帶來更多優惠。我們期待在七月的供應商高峰會上見到他們。

2024 has started off with significant challenges, and there are still many uncertainties. We will continue to focus on controlling the controllable and pressing forward in our efforts to create a stronger and healthier business as the year progresses.

2024年開局充滿挑戰，仍有許多不確定性。新的一年，我們將持續聚焦可控、砥礪前行，把企業做強做優。

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.

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. I would like to start by expressing my gratitude to the entire team here at Big Lots for their outstanding efforts to improve our performance for the first quarter. As Bruce noted, we were disappointed to miss our guidance on comp sales. So we were off to a slower start than we expected. We continue to see a path to positive comps towards the latter part of the year and expect significant gross margin rate improvement in every quarter versus last year.

大家，早安。首先，我謹向 Big Lot 的整個團隊表示感謝，感謝他們為提高我們第一季的業績所做的傑出努力。正如布魯斯指出的那樣，我們很失望地錯過了對公司銷售的指導。所以我們的起步比我們預期的還要慢。我們繼續看到今年下半年實現積極業績的道路，並預計每季的毛利率將比去年顯著提高。

As Bruce referenced, we are making strong progress on our five key actions, particularly with regard to Project Springboard, where we have found opportunities to accelerate our efforts. As a result, we're raising our target to $185 million in cumulative savings by the end of the year versus $175 million previously, of which approximately $150 million will be incremental in 2024.

正如布魯斯所提到的，我們在五項關鍵行動上取得了巨大進展，特別是在「跳板計畫」方面，我們找到了加速努力的機會。因此，我們將在年底累積節省的目標提高到 1.85 億美元，而先前為 1.75 億美元，其中約 1.5 億美元將在 2024 年增加。

I will now provide some detail on our Q1 results, which I will discuss on an adjusted basis, excluding impairment charges, fees related to Project Springboard and DC closure costs.

我現在將提供有關我們第一季業績的一些詳細信息，我將在調整後的基礎上進行討論，不包括減值費用、與 Project Springboard 相關的費用和 DC 關閉成本。

First quarter summary can be found on page 9 of our quarterly results presentation. Comp sales were softer than we expected and more volatile over the course of the quarter. As Bruce mentioned, our trends correlated with the softness in consumer sentiment and to a smaller extent were unfavorably impacted by weather. Q1 net sales were $1.01 billion, the 10.2% decrease compared to $1.12 billion a year ago, driven by a comparable sales decrease of 9.9%.

第一季摘要可在我們季度業績簡報的第 9 頁找到。該季度的比較銷售比我們預期的要疲軟，而且波動性更大。正如布魯斯所提到的，我們的趨勢與消費者信心的疲軟有關，並且在較小程度上受到天氣的不利影響。第一季淨銷售額為 10.1 億美元，與去年同期的 11.2 億美元相比下降 10.2%，原因是可比銷售額下降 9.9%。

Net reduction in the store count offset by a favorable sales shift due to the 53rd week in 2023 had an unfavorable impact of approximately 30 basis points. Our first quarter adjusted net loss was $132.3 million, resulting in an adjusted diluted loss per share for the quarter of $4.51. The gross margin rate for the quarter was 36.8%, up 190 basis points to last year with the improvement versus last year, driven primarily by a reduced level of markdowns as well as benefits from Project Springboard.

商店數量的淨減少被 2023 年第 53 週的有利銷售變化所抵消，產生了約 30 個基點的不利影響。我們第一季調整後淨虧損為 1.323 億美元，導致該季度調整後稀釋每股虧損為 4.51 美元。本季毛利率為 36.8%，較去年上升 190 個基點，年比有所改善，主要是由於降價幅度減少以及 Project Springboard 的好處。

Turning to adjusted SG&A, total expenses for the quarter, including depreciation were $491.8 million, down 3.6% versus $510.5 million last year. SG&A included a rent of approximately $7 million, resulting from our 2023 sale leaseback, which also had the effect of reducing depreciation by around $1 million.

就調整後的銷售、管理及行政費用而言，包括折舊在內的本季總支出為 4.918 億美元，比去年的 5.105 億美元下降了 3.6%。 SG&A 包括約 700 萬美元的租金，這是我們 2023 年售後回租產生的，這也減少了約 100 萬美元的折舊。

Our strong performance on expenses was driven across multiple line items and included benefits from Project Springboard. Adjusted operating margin for the quarter was negative 11.9%. Interest expense for the quarter was $12 million up from $9.1 million in the first quarter last year due to higher average amounts drawn on our credit facilities and higher interest rates. Adjusted income tax expense for the quarter was $0.2 million. Recall that in the second quarter of 2023, 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.

我們在支出方面的強勁表現是由多個項目推動的，其中包括來自 Project Springboard 的收益。此季度調整後營業利益率為負 11.9%。由於我們的信貸額度平均提取金額較高且利率較高，本季的利息支出為 1,200 萬美元，高於去年第一季的 910 萬美元。本季調整後所得稅費用為 20 萬美元。回想一下，在 2023 年第二季度，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。

As a result, 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. Total ending inventory at cost was down 12.7% last year versus our down low teens guidance and driven by lower on-hand units and average unit cost. We ended Q1 with 1,392 stores, unchanged from Q4 and total selling square footage of $32.3 million.

因此，展望未來，直到我們達到三年累計收入狀態之前，我們才能記錄與損失結轉相關的稅收優惠。去年，由於現有數量和平均單位成本下降，以成本計算的期末庫存總額比我們的低點指導值下降了 12.7%。第一季末，我們擁有 1,392 家商店，與第四季持平，總銷售面積為 3,230 萬美元。

CapEx for the quarter was $15 million compared to $17 million last year. Depreciation expense in the quarter was $32 million, down from adjusted depreciation of $36 million last year. We ended the first quarter with $44 million in cash and cash equivalents similar to the fourth quarter. At the end of the quarter, we had $573.8 million in long-term debt versus $501.6 million a year ago.

本季資本支出為 1500 萬美元，而去年為 1700 萬美元。本季折舊費用為 3,200 萬美元，低於去年調整後的折舊費用 3,600 萬美元。第一季結束時，我們的現金和現金等價物為 4,400 萬美元，與第四季類似。截至本季末，我們的長期債務為 5.738 億美元，而一年前為 5.016 億美元。

Turning to the outlook, we expect sequential comp sales improvement in the second quarter into the negative mid to high single digit range. With regard to gross margin, we expect our Q2 gross margin rate to improve year-over-year and to be up by at least 300 basis points sequentially, well ahead of the 190 basis point year-over-year improvement in Q1. And driven by reduced markdown activity and benefits from Project Springboard.

談到前景，我們預計第二季的同期銷售將改善至負中高個位數範圍。毛利率方面，我們預計第二季毛利率將年比改善，較上季至少提高 300 個基點，遠超過第一季 190 個基點的年比改善。受到降價活動減少和 Springboard 專案帶來的好處的推動。

For Q2, we expect SG&A dollars to be down low to mid-single digits versus 2023. Again, this includes approximately $7 million of rent expense related to the 2023 sale leaseback, which will be partially offset by lower depreciation of around $1 million. We expect interest expense to be approximately $15 million in Q2, higher than last year due to higher average borrowings and interest rates. With regard to CapEx, we continue to expect 2024 to be in line with or somewhat below 2023 with necessary IT investments offsetting lower store openings.

對於第二季度，我們預計SG&A 美元將比2023 年下降到中個位數。折舊所部分抵銷。由於平均借款和利率較高，我們預計第二季的利息支出約為 1500 萬美元，高於去年。就資本支出而言，我們繼續預期 2024 年將與 2023 年持平或略低於 2023 年，必要的 IT 投資將抵銷門市開張率的下降。

We now expect three store openings in 2024, all of which will be in the third quarter. Two of these projects were originally slated for 2023 and one is due to a relocation of a store where we are losing our lease in general or new store commitments remain on hold until our business situation improves. We expect full year depreciation of around $130 million, including approximately $32 million in Q2.

我們現在預計 2024 年將開設 3 家門市，所有門市都將在第三季開業。其中兩個項目原定於 2023 年實施，其中一個是由於一家商店搬遷，我們總體上失去了租約，或者新店承諾仍被擱置，直到我們的業務狀況改善為止。我們預計全年折舊約為 1.3 億美元，其中第二季折舊約為 3,200 萬美元。

We expect a share count of approximately $29.3 million for Q2. We expect Q2 total inventory to be down mid-single digits as we continue our aggressive approach to managing inventory levels. The inventory decline will be driven by lower units. Again, all of our commentary on Q2 excludes the potential impact of impairment charges and other items, including distribution center closure costs, gains on the sale, real estate and related expenses and fees related to Project Springboard.

我們預計第二季的股票數量約為 2,930 萬美元。隨著我們繼續採取積極的方法來管理庫存水平，我們預計第二季總庫存將下降中個位數。庫存下降將由單位數量減少推動。同樣，我們對第二季的所有評論都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、銷售收益、房地產和相關費用以及與 Project Springboard 相關的費用。

I'd now like to spend a few moments providing more details on our cost reduction and productivity efforts. Overall, we are progressing ahead of plan on Project Springboard and delivered $25 million in benefits across gross margin and SG&A in Q1 on top of $35 million in the back half of 2023, which was also above our initial estimate. As noted a moment ago, we are now increasing our target to an incremental benefit of around $150 million in 2024, bringing us to $185 million in cumulative savings by year end.

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。總體而言，我們在Springboard 專案上的進展超出了計劃，在2023 年下半年實現3500 萬美元的收益之外，第一季的毛利率和銷售及管理費用方面實現了2500 萬美元的收益，這也高於我們的初步估計。正如剛才所提到的，我們現在將目標提高到 2024 年增量效益約為 1.5 億美元，到年底我們的累積節省將達到 1.85 億美元。

We expect further benefits in 2025 that will take us to and likely beyond our overall goal of at least $200 million of cumulative run-rate benefits. As a reminder, in total, approximately 40% of Project Springboard benefits come from COGS reduction of approximately 40% from other gross margin driving initiatives and approximately 20% from SG&A.

我們預計 2025 年將帶來更多效益，這將幫助我們實現並可能超越我們至少 2 億美元的累積運行效益的總體目標。需要提醒的是，Springboard 專案的整體收益中約 40% 來自於其他毛利率驅動措施帶來的銷貨成本 (COGS) 降低，約 40% 來自於銷售管理費用 (SG&A) 降低。

Turning to liquidity. We ended the quarter with $289 million of net liquidity higher than the $254 million in Q4. The increase in liquidity relative to Q4 was driven by increasing our borrowing capacity by up to $200 million with a new FILO term loan facility we completed in April. This is incremental to the borrowing capacity under our $900 million asset-based revolving loan facility. New financing provides us with additional flexibility as we continue our focus on delivering extreme bargains and unmistakable value to our customers.

轉向流動性。本季結束時，我們的淨流動性為 2.89 億美元，高於第四季的 2.54 億美元。與第四季度相比，流動性有所增加，這是由於我們在 4 月完成了一項新的 FILO 定期貸款安排，使我們的借貸能力增加了多達 2 億美元。這是我們 9 億美元基於資產的循環貸款機制下借款能力的增量。新的融資為我們提供了額外的靈活性，因為我們繼續專注於為客戶提供極致的優惠和明確的價值。

I will now turn the call back over to Bruce.

我現在將把電話轉回布魯斯。

Thank you, Jonathan. Despite a challenging consumer environment, there was a lot to be proud of in terms of our progress in transforming the business with our five key actions and enhancing our financial flexibility, we are confident that our actions will put us on a path towards growth and profitability.

謝謝你，喬納森。儘管消費者環境充滿挑戰，但我們透過五個關鍵行動實現業務轉型並增強財務靈活性，取得了許多值得自豪的進展，我們相信我們的行動將使我們走上成長和獲利之路。

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。

(Operator Instructions) Greg Badishkanian, Wolfe Research.

（操作員說明）Greg Badishkanian，Wolfe Research。

Hey, guys. Thanks for the time here. This is Scott Stringer from Wolfe Research. You gave some good detail on the extreme bargains and bargain performance by category. I was wondering if you could quantify category as a whole, the performance and comps between bargains, extreme bargains and then the rest of the box?

大家好。感謝您抽出寶貴時間來到這裡。我是沃爾夫研究中心的史考特‧斯金格。您按類別提供了有關極端便宜貨和便宜貨表現的一些詳細資訊。我想知道你是否可以量化整個品類、特價商品、極端特價商品以及其他商品之間的表現和比較？

Hey, Scott, this is Bruce. Thanks for your question. Yeah, we're really excited about our continued penetration of extreme bargains. And as I mentioned on the call, it's now 28% at the end of Q1 and on an annualized run rate like that, that's nearly $1 billion in closeout sales. And I just want to reiterate that we're focused on getting to 50% of extreme bargains across the box by the end of the year, which gets us to about a $2 billion annualized run rate. So we're excited about that.

嘿，斯科特，這是布魯斯。謝謝你的提問。是的，我們對極端便宜商品的持續滲透感到非常興奮。正如我在電話會議上提到的，目前第一季末的成長率為 28%，以這樣的年化運行率計算，清倉銷售額接近 10 億美元。我只想重申，我們的目標是在今年年底實現 50% 的極端便宜，這使我們的年化運行率達到約 20 億美元。所以我們對此感到興奮。

The penetration of those extreme bargains, is happening across all our categories. Obviously, we've got a team now that is well experienced and closeout buying across all the categories and that penetration of resources deepen the merchandising organization across our three head merchants is really sound now. So we're at the table when it comes down to food, consumables, everyday essentials, our hard home, soft home, furniture, seasonal, all those categories and making a good impression.

這些極端便宜的商品正在滲透到我們所有的類別中。顯然，我們現在擁有一支經驗豐富的團隊，可以在所有類別中進行清倉採購，並且資源的滲透加深了我們三個主要商家的銷售組織，現在確實很健全。因此，當涉及食品、消耗品、日常必需品、我們的硬質家居、軟家居、家具、季節性以及所有這些類別時，我們都會參與其中，並給人留下良好的印象。

Some of the things I noted in our opening remarks were about the progress we're seeing just like in the toy department being able to take sales that were down during holiday in Q4 and toys and turn into a positive comp. And that's continuing to grow through hard home is amazing. We're also seeing the extreme bargain penetration we have with our Broyhill and Real Living lines in upholstery actually go to positive comps.

我在開場白中提到的一些事情是關於我們所看到的進展，就像玩具部門能夠將第四季度和玩具假期期間的銷售額下降轉變為積極的競爭一樣。在艱苦的家庭環境中不斷成長是令人驚奇的。我們也看到，我們的 Broyhill 和 Real Living 內裝系列的超低價滲透實際上帶來了積極的競爭。

We're seeing upholstery furniture and positive comps in Q1, and that's accelerating into Q2. So we're excited to see that penetration grow everywhere, hard home, soft home, all those attachments continue with it. I think the fiercest battleground is in the everyday essentials and food and consumables, you see all the headlines out there with people lowering prices and they're playing off that price leader, drafting off the mass retailers that set the price.

我們在第一季看到室內裝飾家具和積極的競爭，並且這種情況正在加速進入第二季度。因此，我們很高興看到滲透率在各地增長，硬家庭、軟家庭，所有這些依戀都隨之繼續。我認為最激烈的戰場是日常必需品、食品和消耗品，你會看到所有的頭條新聞都在報道人們降低價格，他們正在與價格領導者較量，以製定價格的大型零售商為目標。

Our job isn't to trying to draft off them. It's the leapfrog them and go below them. And the penetration we're seeing there under Mark's leadership it's just awesome. And so we expect to accelerate that and give our customers more reason to stretch their dollars at a Big Lots store. So very excited about it. Once again, Q1 was tough. It's a pull back, when you think about what the consumer was seeing Q1, the interest rates got pushed out and come down, maybe a little bit of a holiday hangover. We all had a good holiday. All those things come into play in Q1.

我們的工作不是試圖選拔他們。這是超越他們並低於他們。在馬克的領導下，我們看到的滲透率真是太棒了。因此，我們希望加快這一速度，讓我們的顧客有更多理由在 Big Lot 商店裡花更多的錢。對此非常興奮。第一季再次變得艱難。這是一個回調，當你考慮消費者在第一季看到的情況時，利率被推出並下降，可能有點假期宿醉。我們都度過了一個愉快的假期。所有這些因素都會在第一季發揮作用。

But that's not what we're seeing in Q2. As we look at Q2, it's going to definitely be better than Q1 we're already seeing improvements from May to June as we go through Q2, our big ticket and extreme bargain products, even in seasonal, starting to pick up with the weather gets warmer in the Northeast, and that's all being driven by those bargains. We expect our trend in June, July might actually be better than what we're even guiding to. We're cautiously optimistic about it. But what we're seeing as we go into Q2 is just really good momentum in the big ticket picking up and across the board.

但這不是我們在第二季看到的情況。當我們看到第二季度時，它肯定會比第一季更好，隨著我們經歷第二季度，我們已經看到從5 月到6 月的改善，我們的大件商品和極其便宜的產品，即使在季節性，也開始隨著天氣的好轉而回升東北地區變暖，而這一切都是由這些便宜貨推動的。我們預計六月、七月的趨勢實際上可能比我們的指導更好。我們對此持謹慎樂觀態度。但進入第二季時，我們看到的是大額全面回升的良好勢頭。

That's all really great detail. Maybe just switch topics really quick. I think last quarter you mentioned that you had $200 million in assets that could be monetized? Is there any of that left, can you kind of give us an update there?

這些都是非常詳細的內容。也許只是很快地轉換話題。我想上個季度您提到您有 2 億美元的資產可以貨幣化？還有剩下的嗎，您能給我們更新一下嗎？

Hey, good morning, Scott. It's Jonathan. Yeah, part of that was included in the collateral for the FILO term loan that we executed during the quarter. We still have a small number of owned stores, probably with a value around $20 million. Others beyond that, we have some equipment in our Apple Valley, California, DC, but most of the remainder of that $200 million project was collateral for the FILO term loan.

嘿，早上好，史考特。這是喬納森。是的，其中一部分包含在我們本季執行的 FILO 定期貸款的抵押品中。我們仍然擁有少量自營商店，價值可能在 2000 萬美元左右。除此之外，我們在加州蘋果谷擁有一些設備，但該 2 億美元項目的其餘大部分都是 FILO 定期貸款的抵押品。

Great. Super helpful. Thanks, guys.

偉大的。超有幫助。多謝你們。

Thanks, Scott.

謝謝，斯科特。

Brad Thomas, KeyBanc Capital Markets.

Brad Thomas，KeyBanc 資本市場。

Hey, good morning, everyone. It's [Taylor Zick] for Brad. Jonathan, could you talk a little bit more about gross margin improvement. And throughout the year, you saw pretty good improvement in 1Q and guiding to see good improvement in 2Q, can you just elaborate a little bit more on? that

嘿，大家早安。這是布拉德的[泰勒·齊克]。喬納森，您能多談談毛利率的改善嗎？在這一年中，您在第一季看到了很好的改善，並指導第二季度看到了良好的改善，您能詳細說明一下嗎？那

Yeah, absolutely. We think the gross margin rate improvement actually going to accelerate from Q1 to Q2, as we've guided to, we had 190 basis points of improvement in Q1, we said at least 300 basis points of improvement in Q2 were up against a more favorable prior year -- comparison in Q2 because we were highly promotional last year in Q2, which boosted comps, but degraded gross margin rate.

是的，絕對是。我們認為毛利率改善實際上會從第一季到第二季加速，正如我們所指導的那樣，第一季我們有190 個基點的改善，我們說第二季至少有300 個基點的改善，這是相對於更有利的去年——與第二季進行比較，因為我們去年第二季進行了大力促銷，這提高了業績，但降低了毛利率。

So that effect will reverse and we'll get a significant gross margin improvement will be a little bit of a drag on comps as we lap some of those aggressive promotions and markdowns from last year. But even with that, we still expect to achieve a significant improvement in comps in Q2 relative to Q1.

因此，這種影響將會逆轉，我們將獲得顯著的毛利率改善，因為我們從去年開始進行了一些積極的促銷和降價，這將對公司造成一點拖累。但即便如此，我們仍預期第二季的業績將較第一季會有顯著改善。

And as you look out to the back of the year, we continue to see significant gross margin rate improvement from last year, more like what we're seeing for Q2 and we think markdowns and promotions are going to be lower year-over-year. We think freight is pretty much stabilized. So that has some significant benefit we're getting from Project Springboard later into the year.

展望今年下半年，我們繼續看到毛利率比去年顯著提高，更像是我們在第二季度看到的情況，我們認為降價和促銷將同比下降。我們認為貨運量基本上穩定。因此，今年稍後我們將從 Springboard 專案中獲得一些顯著的好處。

It started to impact us in Q1, and Q2 will be more significant in Q3 and Q4 on cost of goods, in particular as well as some of the other gross margin driving components of Project Springboard. So yeah, we feel really good about gross margin rate up nicely in Q2, continuing to be up in that kind of range in the back half of the year.

它從第一季開始對我們產生影響，第二季在第三季和第四季的商品成本方面將更加重要，特別是以及 Springboard 專案的其他一些毛利率驅動因素。所以，是的，我們對第二季的毛利率上升感到非常滿意，並在今年下半年繼續保持在這個範圍內。

And Taylor, I would just add that as we continue to increase our penetration of extreme bargains, we're enjoying a nice accretive margin expansion. If you will against the never out assortment that we've had historically over the past decade or so. And you heard me talk a little bit about that in my opening remarks. But you know, it's not uncommon for us to see 500 basis points, 600 basis points margin expansion with extreme bargains versus the core store. And as that continues to grow at which it will nearly double that by the year end. It not only is exciting for our customers, but it's exciting for us because we see that margin expansion play out.

泰勒，我想補充一點，隨著我們繼續增加極端便宜商品的滲透率，我們正在享受良好的利潤成長。如果您反對我們在過去十年左右的歷史上從未過時的品種。你們聽到我在開場白中談到了這一點。但你知道，與核心商店相比，我們看到 500 個基點、600 個基點的利潤率擴張以及極其便宜的情況並不罕見。隨著這一數字繼續增長，到年底將幾乎翻倍。這不僅讓我們的客戶感到興奮，也讓我們感到興奮，因為我們看到利潤率的擴張正在發揮作用。

Got you. Thank you. And then just maybe on the positive comp later this year, does that require any improvement in the macro to get there? Or is that just a combination of all the bargains or trim margins and things like that.

明白你了。謝謝。然後也許在今年稍後的積極競爭中，是否需要宏觀方面的任何改進才能實現這一目標？或者這只是所有討價還價或削減利潤之類的事情的組合。

It doesn't assume any improvement or deterioration in the macros. The underlying trend is broadly consistent with what we've seen in the past couple of months, big drivers of the improvement are again, extreme bargains, which we expect will accelerate significantly in terms of their comp contribution. We're seeing that starting to take off in Q1 and will accelerate in Q2 and much more so in Q3 and Q4, there's also some Project Springboard driven benefit on comp. And then again, we're also up against, some promo headwinds from a year ago that will abate, as we get later in the year. So that's less of a drag on year-over-year comps. All three of those things, for example, we expect will help us to positive comps before the end of the year.

它不假設宏有任何改進或惡化。基本趨勢與我們過去幾個月所看到的情況大致一致，改善的主要推動力再次是極端便宜，我們預計這將在其補償貢獻方面顯著加速。我們看到，第一季開始起飛，第二季將加速，第三季和第四季更是如此，還有一些由 Project Springboard 驅動的比較優勢。話又說回來，我們還面臨著一年前的一些促銷阻力，這些阻力將在今年稍後減弱。因此，這對同比比較的影響較小。例如，我們預計所有這三件事將幫助我們在年底前取得積極的成果。

Thank you.

謝謝。

Kate McShane, Goldman Sachs.

凱特麥克肖恩，高盛。

Hey good morning. This is Mark Jordan on for Kate. Can you help us better understand the health of your core customer. Did you witness any changes in their purchasing behavior during the quarter? And are you seeing any decreases in maybe purchasing frequency?

嗨，早安。這是為凱特代言的馬克喬丹。您能否幫助我們更了解您的核心客戶的健康狀況？您在本季看到他們的購買行為有什麼變化嗎？您是否發現購買頻率有任何下降？

Yeah, I think the like I was saying just a moment ago, Mark, I think the core customer, the we over penetrate the lower household income customer. I think that they are they're still pulling back, they were pulling back on the large discretionary ticket items, and that's -- and that was prevalent in Q1, which kind of muted our gains everywhere else.

是的，我想就像我剛才所說的那樣，馬克，我認為核心客戶，我們過度滲透到較低家庭收入的客戶。我認為他們仍在撤回，他們正在撤回大型可自由支配的門票項目，這在第一季度很普遍，這削弱了我們在其他地方的收益。

I mean, when you think about it, inflation is still very high, sentiment is low, the credit card balances are high increasing. And you know the when you think about if you look at the headlines out there, people see the economy still growing. People are still spending well, there's a lot of fixed cost, gas, utilities, ramp, mortgage payments that are causing that high spend. But when you get down into lower income households they're hurting still. And we're seeing that you're probably hearing that as well. That played out in Q1 and we saw that pull back, especially when the interest rates had conversations got pushed out to the latter half of this year or into 2025.

我的意思是，仔細想想，通貨膨脹仍然很高，情緒低落，信用卡餘額不斷增加。你知道，當你看看新聞頭條時，人們會看到經濟仍在成長。人們的支出仍然良好，有大量的固定成本、天然氣、公用事業、坡道、抵押貸款支付導致了高支出。但當你進入低收入家庭時，他們仍然會受到傷害。我們發現您可能也聽到了這一點。這種情況在第一季就出現了，我們看到這種情況有所回落，特別是當利率談判被推遲到今年下半年或 2025 年。

We're not counting on that, but that put a chill on the big ticket. It's normalized a bit in Q2, and we're starting to see traction. And there, I believe we're also seeing trade down some of our best-selling items -- our items, Broyhill items that are priced over $1,000 gazebos are sectionals where we're seeing traction, like I said just a moment ago, our upholstery business positively comped in Q1 and continues to grow in Q2.

我們並不指望這一點，但這讓大額門票感到寒意。它在第二季度有所正常化，我們開始看到牽引力。在那裡，我相信我們也看到了一些最暢銷的商品的降價——我們的商品、價格超過 1,000 美元的 Broyhill 商品涼亭是我們看到吸引力的部分，就像我剛才所說的，我們的商品室內裝潢業務在第一季取得積極進展，並在第二季繼續成長。

So yeah, I think that customer, especially the lower household income customer, it's hurting that continue to hurt. I think they've normalized and adjusted accordingly with the news on the interest rates getting pushed out. And we're starting to see some trade down just ever so slightly, but we're pleased with the traction we're seeing as we go from May to June and in the back half of Q2.

所以，是的，我認為客戶，尤其是家庭收入較低的客戶，會繼續受到傷害。我認為隨著利率被取消的消息，他們已經正常化並進行了相應調整。我們開始看到一些交易略有下降，但我們對從 5 月到 6 月以及第二季後半段看到的牽引力感到滿意。

Okay, perfect. Thank you very much. And then just thinking about the closeout environment, how do you view supply for the remainder of the year? Are you seeing any areas where product is particularly attractive? And are you seeing any increased competition on deals?

好的，完美。非常感謝。然後考慮清倉環境，您如何看待今年剩餘時間的供應？您是否發現產品特別有吸引力的領域？您是否發現交易競爭加劇？

Yeah, we think it's a robust opportunity to continue to drive our close out. And remember, we call it margins, extreme bargains. It's really closeout opportunistic buys, factory source products, things we engineer. It's robust every single day. We've got things -- we've got a team out there that it's at the table, getting at the deals were fast or easy to do business with got a vast network, DC's and stores where we can take about any buy.

是的，我們認為這是一個繼續推動我們結束交易的絕佳機會。請記住，我們稱之為利潤，極端便宜。這確實是清倉機會主義購買、工廠來源產品、我們設計的東西。它每天都充滿活力。我們有東西——我們有一個團隊，可以快速達成交易，也可以輕鬆開展業務，擁有龐大的網路、配送中心和商店，我們可以在那裡進行任何購買。

So it's we see it as very opportunistic. We don't see it slowing down, we see it as a -- just start us getting our name back out there and when we get back out there, it's kind of like rekindling our relationships with people in the past, and it's exciting. You know, we've got Seth and Shelly and Kevin working it with their teams. But I see a robust pipeline. I don't see competition at this point, I see us getting back to our heritage in an accelerated manner. We're already exceeding our goals through first quarter. And like I said, our sights are dead on and for 50% penetration sales by the end of the year, which once again that's nearly $2 billion of annualized close up type value extreme bargain deals for the company.

所以我們認為這是非常機會主義的。我們並沒有看到它放緩，我們認為它只是開始讓我們的名字回到那裡，當我們回到那裡時，這有點像重新點燃我們與過去的人的關係，這是令人興奮的。你知道，我們有 Seth、Shelly 和 Kevin 與他們的團隊一起工作。但我看到了一個強大的管道。我目前沒有看到競爭，我看到我們正在加速回歸我們的傳統。第一季我們已經超越了我們的目標。正如我所說，我們的目標是在今年年底實現 50% 的滲透銷售，這再次為公司帶來近 20 億美元的年度特寫價值極端便宜的交易。

Our close-out rate or extreme bargain rate at 28% is the highest they've been, since I've been with the company and nearly 10-years. And so you can see where this is going. We're accelerating into this and we see no ceiling at this point potential.

我們的成交率或極端討價還價率為 28%，是我加入公司近 10 年以來的最高水準。所以你可以看到事情的發展方向。我們正在加速實現這一目標，我們認為目前的潛力沒有上限。

Thank you very much.

非常感謝。

Thank you. At this time, this does conclude today's teleconference. And webcast. A replay of this call will become available. You can access the replay until June 20. (Operator Instructions) You may now disconnect and have a great day. We thank you for your participation.

謝謝。至此，今天的電話會議就到此結束了。和網路廣播。將可重播此通話。您可以在 6 月 20 日之前觀看重播。我們感謝您的參與。