1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-KANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THESECURITIES EXCHANGE ACT OF 1934For the fiscal year ended February 3,2024orTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THESECURITIES EXCHANGE ACT OF
2、1934For the transition period from _ to _Commission File Number 001-08897BIG LOTS,INC.(Exact name of registrant as specified in its charter)Ohio 06-1119097(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)4900 E.Dublin-Granville Road,Columbus,Ohio 43081
3、 (Address of principal executive offices)(Zip Code)(614)278-6800(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredCommon Shares$0.01 par valueBIGNew York Stock Excha
4、ngeIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.YesNoIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.YesNoIndicate by check mark whether the registrant(
5、1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was requiredto file such reports),and(2)has been subject to such filing requirements for the past 90 days.YesNoIndica
6、te by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(orfor such shorter period that the registrant was required to submit such
7、files).YesNoIndicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,a smaller reportingcompany,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reportingcompany,”and emerging gro
8、wth company in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filer Non-accelerated filer Smaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with
9、any new or revised financial accounting standards provided pursuant to Section 13(a)of the ExchangeAct.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of theeffectiveness of its internal control over financial reporting under Section
10、404(b)of the Sarbanes-Oxley Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of theregistrant included in the filing reflect t
11、he correction of an error to previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive officers during the relevant recovery peri
12、od pursuant to240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).YesNoThe aggregate market value of the Common Shares held by non-affiliates of the Registrant(assuming for these purposes that all executive officersand directors
13、 are“affiliates”of the Registrant)was$294,902,033 on July 28,2023,the last business day of the Registrants most recentlycompleted second fiscal quarter(based on the closing price of the Registrants Common Shares on such date as reported on the New York StockExchange).The number of the Registrants co
14、mmon shares,$0.01 par value,outstanding as of April 12,2024,was 29,512,551.Documents Incorporated by Reference2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm1/122Portions of the Registrants Proxy Statement for its 2024 Annual Meeting of Sh
15、areholders are incorporated by reference into Part III of thisAnnual Report on Form 10-K.2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm2/122Table of ContentsBIG LOTS,INC.FORM 10-KFOR THE FISCAL YEAR ENDED FEBRUARY 3,2024TABLE OF CONTENTS
16、Part IPageItem 1.Business2Item 1A.Risk Factors9Item 1B.Unresolved Staff Comments17Item 1C.Cybersecurity18Item 2.Properties19Item 3.Legal Proceedings20Item 4.Mine Safety Disclosures20Supplemental Item.Information about our Executive Officers21 Part II Item 5.Market for Registrants Common Equity,Relat
17、ed Stockholder Matters and Issuer Purchases of EquitySecurities23Item 6.Reserved24Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations25Item 7A.Quantitative and Qualitative Disclosures About Market Risk41Item 8.Financial Statements and Supplementary Data42Repor
18、t of Independent Registered Accounting Firm(PCAOB ID No.34)42Consolidated Statements of Operations and Comprehensive(Loss)Income46Consolidated Balance Sheets47Consolidated Statements of Shareholders Equity48Consolidated Statements of Cash Flows49Notes to Consolidated Financial Statements50Item 9.Cha
19、nges in and Disagreements With Accountants on Accounting and Financial Disclosure73Item 9A.Controls and Procedures73Item 9B.Other Information73Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections73 Part III Item 10.Directors,Executive Officers and Corporate Governance74Item 11
20、.Executive Compensation74Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters75Item 13.Certain Relationships and Related Transactions,and Director Independence75Item 14.Principal Accountant Fees and Services75 Part IVItem 15.Exhibits and Financial St
21、atement Schedules76Item 16.Form 10-K Summary79Signatures8012025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm3/122Table of ContentsPart IItem 1.BusinessThe CompanyBig Lots,Inc.,an Ohio corporation,through its wholly owned subsidiaries is a ho
22、me discount retailer operating in the United States(“U.S.”).At February 3,2024,we operated a total of 1,392 stores and an e-commerce platform.Our mission is to help people LiveBIG and Save LOTS.Our vision is to be the BIG difference for a better life by delivering unmistakable value to customers,bui
23、lding a“best places to grow”culture,rewarding shareholders with top tier growth and returns,and doing good in localcommunities.Our principal executive offices are located at 4900 E.Dublin-Granville Road,Columbus,Ohio 43081,and our telephone number is(614)2786800.Unless this Annual Report on Form 10-
24、K(“Form 10-K”)otherwise indicates or the context otherwise requires,the terms the“Company,”“we,”“us,”and“our”refer to Big Lots,Inc.and its subsidiaries.Similar to many other retailers,our fiscal year ends on the Saturday nearest to January 31,which results in some fiscal yearsconsisting of 52 weeks
25、and some fiscal years consisting of 53 weeks.Unless otherwise stated,references to years in this Form 10-Krelate to fiscal years rather than to calendar years.The following table summarizes our fiscal year calendar and the number ofweeks in each fiscal year:Fiscal YearNumber of WeeksYear Begin DateY
26、ear End Date202452February 4,2024February 1,2025202353January 29,2023February 3,2024202252January 30,2022January 28,2023202152January 31,2021January 29,2022202052February 2,2020January 30,2021201952February 3,2019February 1,2020We manage our business on the basis of one segment:discount retailing.We
27、 use the following six merchandise categories,whichare consistent with our internal management and reporting of merchandise net sales:Food;Consumables;Soft Home;Hard Homeand Other;Furniture;and Seasonal.The Food category includes our beverage&grocery;specialty foods;and candy&snacksdepartments.The C
28、onsumables category includes our health,beauty and cosmetics;plastics;paper;pet;infant;stationery;andchemical departments.The Soft Home category includes our apparel;hosiery;jewelry;frames;fashion bedding;utility bedding;bath;window;decorative textile;and area rugs departments.The Hard Home and Othe
29、r category includes our small appliances;table top;food preparation;home maintenance;home organization;toys;and electronics departments;and other offerings.TheFurniture category includes our upholstery;mattress;ready-to-assemble;home dcor;and case goods departments.The Seasonalcategory includes our
30、lawn&garden;summer;Christmas;and other holiday departments.In 2023,we realigned certain departments within select merchandise categories to be consistent with the realignment of ourmerchandising team and changes to our management reporting.In order to provide comparative information,we have reclassi
31、fiedour results into the new alignment for all periods presented.See the reclassifications section of Note 1 to the consolidated financialstatements for further discussion.We periodically assess,and make minor adjustments to,our product hierarchy,which can impact the roll-up of our merchandisecatego
32、ries.Our financial reporting process utilizes the most current product hierarchy in reporting net sales by merchandisecategory for all periods presented.Therefore,there may be minor reclassifications of net sales by merchandise category comparedto previously reported amounts.22025/2/11 22:17big-2024
33、0203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm4/122Table of ContentsMerchandisingOur merchandising strategy primarily focuses on product sourcing,particularly closeout sourcing and global sourcing.Weimplement our merchandising strategy through(1)Bargains and Ex
34、treme Bargains,by seeking to deliver unmatched value in all ofour merchandise categories through high quality closeouts on name brand items,affordable opening price points and low prices onour own brand assortment and(2)complementing our bargain offerings with an assortment of essentials,by seeking
35、to offer areliable assortment of simple-to-shop staple products that we believe our customers rely on and that bring consistency to ourproduct mix.We evaluate our product offerings to ensure we are providing quality and unmistakable value,and exceeding ourcustomers expectations.We believe that focus
36、ing on our customers expectations will improve our ability to provide a morerelevant and desirable assortment of offerings in our merchandise categories.We utilize traditional sourcing methods in purchasing imported and domestic products.We also take advantage of closeoutchannels to enhance our abil
37、ity to offer products that provide unmistakable value to our customers,which we refer to as“ExtremeBargains.”Further,we offer products that we believe provide a good value at lower prices,which we refer to as“Bargains.”Wegenerally source closeouts from production overruns,packaging changes,discontin
38、ued products,order cancellations,liquidations,returns,and other disruptions in the supply chains of manufacturers,but also from engineered closeouts and other sourcing options.We have increased our sourcing and purchasing of high quality closeout merchandise directly from manufacturers and othervend
39、ors,typically at prices lower than those paid by traditional discount retailers,to enhance our ability to deliver unmistakablevalue.We believe our strong vendor relationships support this sourcing model,and we intend to continue to grow our Bargainmerchandise offerings during 2024.Our global sourcin
40、g team and overseas vendor relationships continue to represent important components of our merchandisingstrategy.We expect our import partners to responsibly source goods that our merchandising teams identify as having our desiredmix of quality and value.During 2023,we purchased approximately 21%of
41、our merchandise,at cost,directly from overseasvendors,including approximately 13%from vendors located in China.Additionally,a significant amount of our domestically-purchased merchandise is manufactured abroad.As a result,a significant portion of our merchandise supply is subject to certainrisks des
42、cribed in“Item 1A.Risk Factors”of this Form 10-K.Advertising and MarketingWe believe that our brand image is an important part of why our customers choose to shop Big Lots.We also believe our brandimage is important to the value proposition that we convey through all of our customer touchpoints.We e
43、mploy an integratedapproach for our marketing touchpoints and investments consisting of:(1)paid media,including television,print,digital,socialmedia,internet,e-mail,and payment card-linked marketing;(2)earned media,including public relations and organic social media;and(3)owned media,including our w
44、ebsite,customer loyalty programs,and in-store signage.Total advertising expense as apercentage of total net sales was 1.9%,1.8%,and 1.6%in 2023,2022,and 2021,respectively.We have conducted extensive consumer research to enhance our understanding of why customers shop us and the reasons whyothers do
45、not shop us.We have used this research to refine our brand positioning and implement changes to our messaging acrossall marketing touchpoints.Our research shows that our customers believe we excel in four key areas or brand pillars:unmistakablevalue,surprising products,easy shopping,and a delightful
46、 experience.Accordingly,our marketing strategy is grounded in thesebrand pillars.Our marketing tactics are intended to:(1)communicate bargains and extreme bargains;(2)drive incremental visitsfrom new and existing customers;(3)increase our brand awareness,brand consideration and customers;and(4)drive
47、 personalizedmarketing based on our customer data platform.Our consumer research also influences how we merchandise our stores,invest inomnichannel capabilities,design our shopping experience,and invest in our business.Our customer data is an important marketing tool that allows us to communicate wi
48、th our customers in a cost-effective,personalized,and relevant manner,including through e-mail delivery of our circulars,announcement of flash sales,and product-specific promotions.At February 3,2024,our customer loyalty program,which we call the“BIG Rewards Program,”includedapproximately 20 million
49、 active members who had made a purchase in our stores in the last 12 months,compared to approximately21 million active members at January 28,2023.In addition to the customer communications mentioned above,our BIG RewardsProgram rewards our customers for making frequent and high-ticket purchases and
50、offers a special birthday reward.We utilizeinsights gained through the BIG Rewards Program to evaluate the effectiveness of our promotions,tailor promotions to ourcustomers shopping habits,and gain consumer insights.Our research shows that membership in the BIG Rewards Program helpsdrive net sales,a
51、nd we have incentivized our store associates to encourage customer enrollment into the program.2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm5/12232025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026
52、/big-20240203.htm6/122Table of ContentsWe believe our approach to retailing differentiates us from the competition and allows us to make a difference in the communitieswe serve.Our community-oriented approach to retailing includes“doing good as we do well,”which means supporting both localand nation
53、al causes that aid the communities in which we do business.We invest in point-of-sale campaigns in each of ourgeographic regions,the beneficiaries of which are selected based on their impacts on local customers and associates.We serve thecommunity on a national level through our Big Lots Foundation,
54、which focuses on healthcare,housing,hunger,and education.Inaddition,we are pleased to support our local community in Columbus,OH through our partnership with Nationwide ChildrensHospital,to which the Company committed$40 million and the Big Lots Foundation committed$10 million to the Big LotsBehavio
55、ral Health Pavilion,a state-of-the-art medical facility dedicated to child and adolescent mental and behavioral health,which opened in 2020.CompetitionWe operate in the highly competitive retail industry.We face strong sales competition from other general merchandise,discount,home,food,furniture,art
56、s and crafts,and dollar store retailers,which operate in traditional brick and mortar stores and/or online.Additionally,we compete with a number of companies for retail site locations and,distribution site locations,to attract and retainquality employees,and to acquire our broad merchandising assort
57、ment from vendors.We operate an e-commerce platform whichfaces additional competition for customers,fulfillment capabilities,and technological innovation from a wider range of retailers ina highly competitive marketplace.Real EstateThe following table compares the number of our stores in operation a
58、t the beginning and end of each of the last five fiscal years:20232022202120202019Stores open at the beginning of the year1,425 1,431 1,408 1,404 1,401 Stores opened during the year15 56 50 24 54 Stores closed during the year(48)(62)(27)(20)(51)Stores open at the end of the year1,392 1,425 1,431 1,4
59、08 1,404 For additional information regarding our real estate strategy,see the discussion under the caption“Operating Strategy-RealEstate”in the accompanying“Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations”(“MD&A”)in this Form 10-K.42025/2/11 22:17big-2024
60、0203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm7/122Table of ContentsThe following table details our U.S.stores by state at February 3,2024:Alabama29 Maine5 Ohio102 Arizona34 Maryland27 Oklahoma20 Arkansas12 Massachusetts23 Oregon14 California109 Michigan46 Penn
61、sylvania73 Colorado14 Minnesota2 Rhode Island1 Connecticut16 Mississippi12 South Dakota1 Delaware5 Missouri25 South Carolina38 Florida107 Montana3 Tennessee47 Georgia51 Nebraska3 Texas116 Idaho6 Nevada13 Utah7 Illinois29 New Hampshire6 Vermont4 Indiana45 New Jersey27 Virginia43 Iowa3 New Mexico12 Wa
62、shington26 Kansas7 New York64 West Virginia16 Kentucky40 North Carolina75 Wisconsin12 Louisiana19 North Dakota1 Wyoming2Total stores1,392 Number of states48Of our 1,392 stores,31%operate in four states:California,Texas,Florida,and Ohio,and net sales from stores in these statesrepresented 32%of our 2
63、023 net sales.We have a concentration in these states based on their size,population,and customer base.Warehouse and DistributionWhile certain of our merchandise vendors deliver directly to our stores,the large majority of our inventory is staged and deliveredfrom our distribution centers to facilit
64、ate prompt and efficient distribution and transportation of merchandise to our stores and helpmaximize our sales and inventory turnover.The majority of our merchandise offerings are processed for retail sale and distributed to our stores from five regional distributioncenters located in Alabama,Cali
65、fornia,Ohio,Oklahoma,and Pennsylvania.We selected the locations of our regional distribution centers to help manage transportation costs and to minimize the distance fromour distribution centers to our stores.In addition to our regional distribution centers that handle store merchandise,we operate t
66、wo other warehouses within our Ohiodistribution center.One warehouse distributes fixtures and supplies to our stores and our five regional distribution centers and theother warehouse serves as a fulfillment center for our direct-ship e-commerce operations.To supplement our e-commercefulfillment cent
67、er,we also fulfill direct-ship e-commerce orders from 66 of our store locations,which we strategically selectedbased on geographic location,size,and other relevant factors.We also fulfill some of our e-commerce orders using supplier directfulfillment,a process in which the customer purchases merchan
68、dise through our e-commerce platform,but the merchandise isshipped directly from the supplier to the customer.Supplier direct fulfillment is primarily used for bulky items that are more costlyto warehouse and ship.We also direct-ship a limited assortment out of our distribution center in California
69、to fulfill some of our e-commerce orders.We continue to evaluate our e-commerce fulfillment capabilities to reduce shipping times and expenses.In 2021 and 2022,we opened four small-format forward distribution centers(“FDC”)located in Georgia,Pennsylvania,Washington,and Indiana to divert processing a
70、nd logistics for bulk goods out of our regional distribution centers into our FDCsand to increase the efficiency and capacity of our regional distribution centers,which were designed to efficiently process cartonsas opposed to bulk goods.In 2023,we ceased all business operations at our FDCs,sublease
71、d our Georgia and Indiana FDClocations to third-party tenants,and terminated the lease for the FDC located in Lacey,WA.We ceased all business operations atour FDCs due to the decline in sales volume,and to reduce operational expenses and right size our warehouse and2025/2/11 22:17big-20240203https:/
72、www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm8/12252025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm9/122Table of Contentsdistribution network.We are actively marketing the remaining FDC site in Pennsylvania for
73、sublease,which has a remaining leaseterm of approximately 2.7 years.For additional information regarding our warehouses and distribution facilities and relatedinitiatives,see the discussion under the caption“Warehouse and Distribution”in“Item 2.Properties”of this Form 10-K.We will continue to evalua
74、te our supply chain needs based on projected purchasing volumes and adjust the capacity of ourdistribution and fulfillment network accordingly.SeasonalityWe have historically experienced seasonal fluctuations in our sales and profitability,with a larger percentage of our net sales andoperating profi
75、t realized in our fourth fiscal quarter,which includes the Christmas holiday selling season.Our quarterly net salesand operating profit(loss)can be affected by the timing of new store openings and store closings,advertising,and certain holidays.We historically receive a higher proportion of merchand
76、ise,carry higher inventory levels,and incur higher outbound shipping andpayroll expenses as a percentage of sales in our third fiscal quarter in anticipation of increased sales activity during our fourth fiscalquarter.Performance during our fourth fiscal quarter typically reflects a leveraging effec
77、t which has a favorable impact on ouroperating results because net sales are higher and certain of our costs,such as rent and depreciation,are fixed and do not vary assales levels escalate.If our sales performance is significantly better or worse during the Christmas holiday selling season,we woulde
78、xpect a more pronounced impact on our annual financial results than if our sales performance is significantly better or worse in adifferent season.The seasonality of our net sales in the last three years was generally aligned with our historical seasonality.The seasonality of ouroperating results,ho
79、wever,differed significantly due to our recording an operating loss in the first,second,and fourth quarters of2023 and every quarter of 2022,compared to only one quarter in 2021.This change in the seasonality of our operating results isprimarily attributable to inflationary and macroeconomic pressur
80、es experienced throughout 2022 and 2023,which resulted indecreased net sales,decreased gross margin as a percentage of net sales,and increased selling and administrative expenses.Foradditional information regarding our operating results,see the discussion under the caption“Results of Operations”in t
81、heaccompanying MD&A in this Form 10-K.The following table sets forth the seasonality of net sales and operating profit(loss)for 2023,2022,and 2021 by fiscal quarter:First Second Third FourthFiscal Year 2023Net sales as a percentage of full year23.8%24.1%21.7%30.4%Operating(loss)profit as a percentag
82、e of full year(67.4)(31.5)5.1(6.2)Fiscal Year 2022Net sales as a percentage of full year25.1%24.6%22.0%28.3%Operating loss as a percentage of full year(5.2)(41.7)(50.0)(3.1)Fiscal Year 2021Net sales as a percentage of full year26.4%23.7%21.7%28.2%Operating profit(loss)as a percentage of full year51.
83、1 22.5(1.7)28.1(a)The first,third,and fourth quarters of 2023 included asset impairment charges of$84.5 million,$55.3 million,and$11.7million,respectively.The first quarter of 2023 included$53.6 million in lease exit costs associated with our prior syntheticlease for our Apple Valley,CA distribution
84、 center(“AVDC”).The first,second,third,and fourth quarters of 2023 includedcontract termination costs and expenses related to closure of our FDCs of$8.6 million,$9.0 million,$2.8 million,and$2.2million,respectively.The second,third,and fourth quarters of 2023 included fees related to a cost reductio
85、n and productivityinitiative(“Project Springboard”)of$5.4 million,$14.4 million,and$11.5 million,respectively.For additional informationregarding“Project Springboard,”see the discussion under the caption“Project Springboard”within the“Operating Strategy”section within the accompanying MD&A in this F
86、orm 10-K.The third quarter of 2023 included a gain on sale of real estateand related expenses of$204.7 million related to the sale and leaseback of 23 owned stores and AVDC.(b)The second,third,and fourth quarters of 2022 included asset impairment charges of$24.1 million,$21.7 million,and$22.6million
87、,respectively.The fourth quarter of 2022 also included a gain on sale of real estate and related expenses of$16.8million related to the sale of 20 owned store locations and one unoccupied land parcel.(a)(b)62025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/b
88、ig-20240203.htm10/122Table of ContentsHuman CapitalAt February 3,2024,we had approximately 30,300 active associates comprised of 10,000 full-time and 20,300 parttime associates.Approximately 67%of the associates we employed during 2023 were employed on a part-time basis.Temporary associates hiredfor
89、 the holiday selling season increased the total number of associates to a peak of approximately 32,200 in 2023.We are not aparty to any labor agreements.We require all of our associates to adhere to our Code of Business Conduct and Ethics andworkplace safety protocols.We believe our associates are a
90、mong our most important resources.We evaluate our human capital management at our stores,distribution centers,and corporate headquarters on the basis of associate engagement,diversity,equity,and inclusion,compensation and benefits,talent development and health and safety.Associate EngagementWe send
91、an associate engagement survey to each of the associates in our corporate headquarters and to our field and distributioncenter leadership on an annual basis to assess our associate engagement and obtain the thoughts of those associates regardingmanager effectiveness,performance enablement,and our di
92、versity and inclusion efforts.In 2023,91%of the associates surveyedresponded to the survey with a 76%favorable engagement rate.Based on results of the annual survey,our leaders create actionplans to address areas where our associates have told us we can improve.Diversity,Equity,and InclusionWe recog
93、nize the value of creating a diverse,equitable,and inclusive workplace.As a result,diversity,equity,and inclusion(“DEI”)is a significant component of our human capital management.As part of our commitment to DEI,we established aDiversity,Equity,and Inclusion Council(“DEI Council”)in 2020 to lead the
94、 development and advancement of our DEI strategy.The DEI Council is comprised of associates from our stores,distribution centers,and corporate headquarters who represent variousjob levels,locations,ages,genders,languages,work shifts,races,sexual orientations,and leadership styles.Additionally,ourDiv
95、ersity,Equity,and Inclusion Executive Advisory Committee,which is comprised of senior leaders,provides guidance to theDEI Council,approves our DEI strategy and promotes its achievement throughout our organization.In 2022 and 2023,weintegrated our conscious inclusion program into the onboarding proce
96、ss for all of our associates,which we developed to buildawareness of our DEI strategy,educate our associates on how we can improve DEI,and further promote the already strong cultureof belonging and empowerment for all associates.Compensation and BenefitsWe offer a competitive compensation and benefi
97、ts package to our eligible associates including,among other benefits,incentivecompensation,performance-based merit pay,paid holidays,paid vacation,401(k)match,and healthcare coverage,includingmedical,dental,and vision insurance with health savings account and flexible savings account options.Our com
98、pensation andbenefits packages are designed to attract and retain high-performing talent.Additionally,we provide our associates with a companydiscount on our merchandise and our associates redeemed over$22 million in corporate discounts in 2023.Talent DevelopmentTalent development is critical to dev
99、eloping the high-performance culture that we seek to foster.Each of our associates participatesin an annual goal-setting process and completes an annual performance review,which is followed by periodic discussionsthroughout the year to assess progress.Each of our managers also completes an individua
100、l development plan on an annual basis toset and track long-term goals.Additionally,our business leaders participate in a succession planning process that serves as a toolfor identifying and developing high-potential individuals within our organization as well as ensuring business continuity.We alsoo
101、ffer a robust catalog of training and development programs to our associates through our Big Lots University training tool,whichcovers topics including,but not limited to,workplace harassment,safety,ethics,leadership,and job skills.All associates areresponsible for upholding the Companys Code of Bus
102、iness Conduct and Ethics and Human Rights Policy which form thefoundation of our policies and practices and ethical business culture.Health and SafetyThe health and safety of our associates is of the utmost importance.We have implemented comprehensive safety protocols in eachof our stores,distributi
103、on centers,and corporate offices to ensure the safety of associates,customers,and other visitors in eachfacility.We require each of our associates to complete safety training courses relevant to their jobs,which we track using e-learningtools to ensure compliance.In addition to traditional safety tr
104、aining,we require all of our associates to participate inaggressor/active shooter training and we require our store associates to participate in argumentative and de-escalating conversationstraining.We reinforce safety standards with re-training requirements and regular,engaging communications.2025/
105、2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm11/12272025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm12/122Table of ContentsEnvironmental,Social and Governance PracticesThe Board has
106、primary responsibility for overseeing environmental,health and safety,corporate social responsibility,corporategovernance,sustainability and other public policy matters relevant to the Company(“ESG Matters”),including overseeing themanagement of risks relating to ESG matters.The Board executes its o
107、versight duties in part by assigning responsibility tocommittees of the Board to oversee the management of ESG Matters and ESG risks that fall within their respective areas.OurNominating/Corporate Governance Committee assists the Board in fulfilling the Boards oversight responsibility relating to th
108、eevaluation of ESG risk and has responsibility under its charter to oversee ESG Matters.Our Environmental,Social and GovernanceCommittee supports the Companys ongoing commitment to ESG Matters.The Environmental,Social and Governance Committeetakes a leadership role in(1)developing the Companys gener
109、al strategy with respect to ESG Matters,(2)overseeing thedevelopment of policies and practices relating to ESG Matters based on such strategy and the integration of such policies andpractices into the Companys business operations and strategy,(3)overseeing communications with employees,investors and
110、stakeholders regarding ESG Matters and(4)monitoring and assessing developments relating to,and improving the Companysunderstanding of,ESG Matters.The Environmental,Social and Governance Committee is comprised of our Chief Legal andGovernance Officer,our Chief Financial and Administrative Officer and
111、 the leaders of our Compliance/Social,Diversity,Equity&Inclusion,Investor Relations,Public Relations and Sustainability functions.The duties and responsibilities of the Environmental,Social and Governance Committee are further described in its charter,which is available in the Investor Relations sec
112、tion of ourwebsite()under the“Corporate Governance”caption.Our vision is to be the BIG difference for a better life,and we deliver on that vision by building stronger communities where allfamilies can thrive.Through our culture of philanthropy,we remain dedicated to making a positive impact on the p
113、laces we callhome.The Big Lots Foundation is focused on improving the lives of families and children facing challenges in four key areashunger,housing,healthcare,and educationwhich we believe are the most basic needs of any community.We carry out ourphilanthropy strategy through key programs and rel
114、ationships,including national point-of-sale donation campaigns that engage ourcustomers and associates around the country to raise dollars and awareness for causes that impact all of us;Big Lots Foundationgiving to invest in organizations that are fulfilling the Big Lots Foundations mission in commu
115、nities where our stakeholders liveand work;volunteerism and community engagement that empowers our associates to give their time and talents to the causes theycare about most;and in-kind donations of our products to nonprofit partners,which allows us to support local communities andreduce our enviro
116、nmental impact.To date,the Big Lots Foundation has donated approximately$25.0 million to help fulfil ourphilanthropic vision.In April 2023,we published our second corporate social responsibility report,titled“BIG Cares,”which addressed ourenvironmental,social and governance policies,initiatives and
117、achievements.A copy of this report is available on our website().The contents of our website,including the Big Cares reports,are not incorporated into,or otherwise made apart of,this Form 10-K.Available InformationWe make available,free of charge,through the“Investors”section of our website()under t
118、he“SEC Filings”caption,our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,and amendments tothose reports filed or furnished pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934,as amended(“ExchangeAct”),as well as our definitive proxy material
119、s filed pursuant to section 14 of the Exchange Act,as soon as reasonably practicableafter we file such material with,or furnish it to,the Securities and Exchange Commission(“SEC”).These filings are also availableon the SECs website at http:/www.sec.gov.The contents of our website,including the Big C
120、ares report,are not incorporated into,or otherwise made a part of,this Form 10-K.82025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm13/122Table of ContentsItem 1A.Risk FactorsThe statements in this item describe material risks to our business
121、 and should be considered carefully.In addition,these statementsconstitute cautionary statements under the Private Securities Litigation Reform Act of 1995.This Form 10-K contains forward-looking statements that set forth anticipated results based on managements plans andassumptions.From time to tim
122、e,we provide forward-looking statements in other materials we release to the public and in oralstatements that may be made by us.Such forward-looking statements give our current expectations or forecasts of future events.They do not relate strictly to historical or current facts.Such statements are
123、commonly identified by using words such as“anticipate,”“estimate,”“continue,”“could,”“approximate,”“expect,”“objective,”“goal,”“project,”“intend,”“plan,”“believe,”“will,”“should,”“may,”“target,”“forecast,”“guidance,”“outlook,”and similar expressions in connection with any discussion offuture operati
124、ng or financial performance.In particular,forward-looking statements include statements relating to future actions,future performance,or results of current and anticipated products,sales efforts,expenses,interest rates,the outcome ofcontingencies,such as legal proceedings and financial results.We ca
125、nnot guarantee that any forward-looking statement will be realized.Achievement of future results is subject to risks,uncertainties,and potentially inaccurate assumptions.If known or unknown risks or uncertainties materialize,or should underlyingassumptions prove inaccurate,actual results could diffe
126、r materially from past results or those anticipated,estimated,or projectedresults set forth in the forward-looking statements.You should bear this in mind as you consider forward-looking statements madeor to be made by us.You are cautioned not to place undue reliance on forward-looking statements,wh
127、ich speak only as of the date made.We undertakeno obligation to publicly update forward-looking statements,whether as a result of new information,future events,or otherwise.You are advised,however,to consult any further disclosures we make on related subjects in our future Annual Reports on Form 10-
128、K,Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.The following cautionary discussion of material risks,uncertainties,and assumptions relevant to our businesses describes factorsthat,individually or in the aggregate,we believe could cause our actual results to diffe
129、r materially from expected and historicalresults.Additional risks not presently known to us or that we presently believe to be immaterial also may adversely impact us.Should any risks or uncertainties develop into actual events,these developments could have material adverse effects on ourbusiness,fi
130、nancial condition,results of operations,and liquidity.Consequently,all forward-looking statements made or to be madeby us are qualified by these cautionary statements,and there can be no assurance that the results or developments we anticipate willbe realized or that they will have the expected effe
131、cts on our business or operations.This discussion is provided as permitted by thePrivate Securities Litigation Reform Act of 1995.Our ability to achieve the results contemplated by forward-looking statements is subject to a number of factors,any one or acombination of which could materially affect o
132、ur business,financial condition,results of operations,and liquidity.These factorsmay include,but are not limited to:Operational and Supply Chain RisksOur strategy depends on initiatives designed to increase sales and improve the efficiencies,costs and effectiveness of ouroperations.Failure to achiev
133、e these goals could affect our performance adversely.We have implemented a cost reduction and productivity initiative that we refer to as“Project Springboard,”with the goal ofimproving our operating income by over$200 million by reducing our cost of goods sold,improving gross margin and reducingsell
134、ing and administrative expenses.The initiatives intended to reduce cost of goods sold are expected to be achieved primarilythrough reduced input costs as a result of improved purchasing practices and competitive bidding processes,among otherimprovements.The gross margin improvements are primarily ex
135、pected to be achieved through optimization of our inventoryallocation processes and improved marketing,pricing,and promotion,among other improvements.The selling and administrativeexpense savings are expected to be achieved through optimization of store payroll,improved efficiency in our supply chai
136、n,procurement improvements,and other workforce efficiencies.We may not meet or exceed our operating performance targets andgoals if our strategies and initiatives are unsuccessful.Our ability to execute and/or refine our operating and strategic plans,asnecessary,including cost savings initiatives,co
137、uld impact our ability to meet our operating performance targets.Additionally,wemust effectively adjust our operating and strategic plans over time to adapt to the evolving marketplace.See the discussion underthe caption“Operating Strategy”within MD&A in this Form 10-K for additional information con
138、cerning our operating strategy.2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm14/12292025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm15/122Table of ContentsOur arrangements with o
139、ur suppliers and vendors may be materially and adversely affected by changes in our financial resultsor financial position or changes in consumer demand,which could materially and adversely affect our business.Substantially all of our merchandise suppliers and vendors sell to us on open account purc
140、hase terms.There is a risk that oursuppliers and vendors could respond to any actual or apparent decrease in,or any concern with,our financial results or liquidity byrequiring or conditioning their sale of merchandise to us on more stringent or more costly payment terms,such as by requiringearlier o
141、r advance payment of invoices,payment upon delivery or other assurances or credit support or by choosing not to sellmerchandise to us on a timely basis or at all.In addition,if demand for our products declines,the volume of merchandise wepurchase from suppliers may decrease,which could result in sma
142、ller discounts from our vendors or the elimination of suchdiscounts.Our arrangements with our suppliers and vendors may also be impacted by media reports regarding our financialposition or other factors relating to our business.Our need for additional liquidity could materially increase and our supp
143、ly ofinventory could be materially disrupted if any of our key suppliers or vendors,or a significant portion of our other suppliers orvendors,takes one or more of the actions described above,which could result in increased operating costs and decreased net sales,customer satisfaction and profits.We
144、are subject to payments-related risks that could increase our operating costs,expose us to fraud,subject us to potentialliability,and potentially disrupt our business.We accept payments using a variety of methods,including credit cards,debit cards,credit accounts,our private label credit cards,gift
145、cards,direct debit from a customers bank account,consumer invoicing,and physical bank checks,and we may offer differentpayment options over time.These payment options subject us to many compliance requirements,including,but not limited to,compliance with payment card association operating rules,data
146、 security rules,certification requirements,rules governing electronicfunds transfers,and Payment Card Industry Data Security Standards.They also subject us to potential fraud by criminal elementsseeking to discover and take advantage of security vulnerabilities that may exist in some of these paymen
147、t systems.For certainpayment methods,including credit and debit cards,we pay interchange and other fees,which may increase over time and raise ouroperating costs and lower profitability.We rely on third parties to provide payment processing services,including the processing ofcredit cards,debit card
148、s,electronic checks,gift cards and promotional financing,and our business may be disrupted if thesecompanies become unwilling or unable to provide these services to us.If we fail to comply with these rules or requirements oradequately encrypt payment transaction data,or if our data security systems
149、are breached or compromised,we may be liable forcard issuing banks costs,become subject to fines and higher transaction fees,and lose our ability to accept credit and debit cardpayments from our customers,process electronic funds transfers,or facilitate other types of online payments,and our busines
150、s andoperating results could be adversely affected.Disruption to our distribution network,the capacity of our distribution centers,and our timely receipt of merchandise inventorycould adversely affect our operating performance.We rely on our ability to replenish depleted merchandise inventory throug
151、h deliveries to our distribution centers and from thedistribution centers to our stores by various means of transportation,including shipments by sea,rail and truck carriers.A decreasein the capacity of carriers,labor strikes or shortages,or disruptions in the transportation industry could negativel
152、y affect ourdistribution network,our timely receipt of merchandise and/or our transportation costs.In addition,disruptions to the U.S.andinternational transportation infrastructure from wars or conflicts(including the Russian invasion of Ukraine and the Israel-Hamaswar),political unrest,terrorism,na
153、tural disasters(including extreme weather),pandemic diseases,governmental budget constraintsand other significant events that lead to delays or interruptions of service could adversely affect our business.Although the Israel-Hamas war has not yet had a material impact on our business or operations,t
154、he expansion of the geographic or economic scope ofthe conflict could create supply chain inefficiencies,increase shipping costs and delay shipments of merchandise,any of whichcould have an adverse impact in our ability to receive merchandise.In addition,a fire,earthquake,or other disaster(including
155、extreme weather)at one of our distribution centers could disrupt our timely receipt,processing and shipment of merchandise to ourstores which could adversely affect our business.Additionally,as we seek to expand our operations through sales growth andadvancement of our online retail capabilities,we
156、may face increased or unexpected demands on distribution center operations,aswell as new demands on our distribution network.We rely on manufacturers located in foreign countries,including China,for significant amounts of merchandise,including asignificant amount of our domestically-purchased mercha
157、ndise.Our business may be materially adversely affected by risksassociated with international trade,including the impact of tariffs and/or sanctions imposed by the U.S.with respect to certainconsumer goods imported from China.Global sourcing of many of the products we sell is an important factor in
158、driving higher operating profit.During 2023,wepurchased approximately 21%of our products,at cost,directly from overseas vendors,including 13%from vendors located inChina.Additionally,a significant amount of our domestically-purchased merchandise is manufactured abroad.Our ability to2025/2/11 22:17bi
159、g-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm16/122102025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm17/122Table of Contentsidentify qualified vendors and to access products in a timely and effi
160、cient manner is a significant challenge,especially with respectto goods sourced outside of the U.S.Global sourcing and foreign trade involve numerous risks and uncertainties beyond ourcontrol,including increased shipping costs,increased import duties,more restrictive quotas,loss of most favored nati
161、on tradingstatus,currency and exchange rate fluctuations,work stoppages,transportation delays,economic uncertainties such as inflation,foreign government regulations,political unrest,pandemic diseases,natural disasters,war,terrorism,trade restrictions and tariffs(including retaliation by the U.S.aga
162、inst foreign practices or by foreign countries against U.S.practices),the financial stability ofvendors,or merchandise quality issues.U.S.policy on trade restrictions frequently changes and may result in new laws,regulations,or treaties that increase the costs of importing goods and/or limit the sco
163、pe of available foreign vendors.These andother issues affecting our international vendors could materially adversely affect our business and financial performance.The majority of our products and components of our products imported from China are currently subject to tariffs and proposedtariffs.As a
164、 result,we are continually evaluating the potential impact of the effective and proposed tariffs on our supply chain,costs,sales,and profitability,and are considering strategies to mitigate such impact,including reviewing sourcing options,exploring first sale valuation strategies,filing requests for
165、 exclusion from the tariffs with the U.S.Trade Representative for certainproduct lines,and working with our vendors and merchants.Given the volatility and uncertainty regarding the scope and durationof these tariffs,as well as the potential for additional trade actions by the U.S.or other countries,
166、the impact on our operations andresults is uncertain and could be significant.We can provide no assurance that any strategies we implement to mitigate the impactof such tariffs or other trade actions will be successful.To the extent that our supply chain,costs,sales,or profitability arenegatively af
167、fected by the tariffs or other trade actions,our business,financial condition and results of operations may be materiallyadversely affected.Our inability to properly manage our inventory levels and offer merchandise that meets changing customer demands maymaterially impact our business and financial
168、 performance.We must maintain sufficient inventory levels to successfully operate our business.However,we also must seek to avoidaccumulating excess inventory to maintain appropriate in-stock levels based on evolving customer demands.We obtainapproximately 21%of our merchandise directly from vendors
169、 outside of the U.S.These foreign vendors often require us to ordermerchandise and enter into purchase order contracts for the purchase of such merchandise well in advance of the time we offerthese products for sale.As a result,we may experience difficulty in rapidly responding to a changing retail
170、environment,whichmakes us vulnerable to changes in price and in consumer preferences.In addition,we attempt to maximize our operating profit andoperating efficiency by delivering proper quantities of merchandise to our stores in a timely manner.If we do not accuratelyanticipate future demand for a p
171、articular product or the time it will take to replenish inventory levels,our inventory levels may notbe appropriate and our results of operations may be negatively impacted.In addition,maintaining sufficient inventory levels involves relying on our vendors to timely deliver merchandise in the quanti
172、tieswe ordered.In November 2022,United Furniture Industries,Inc.(“UFI”)unexpectedly and without notice to us ceased operationsand terminated its employees.Furniture products supplied by UFI to the Company represented approximately 6%of ourmerchandise purchases in 2022.By the end of 2023,we have full
173、y mitigated the impact of UFIs closure,but the closure did havean adverse impact on our operations in both 2022 and 2023.We cannot provide any assurance that our vendors will timely deliverthe merchandise we have ordered from them and their failure to do so could adversely impact our results of oper
174、ations.If we are unable to successfully appeal to and engage with our target consumers,our business and financial performance maybe materially and adversely affected.We operate in the consumer retail industry through brick-and-mortar stores and digitally through an e-commerce platform.As aresult,our
175、 success depends on,among other things,our ability to identify and successfully market products through variouschannels that appeal to our current and future target customer segments,align our offerings with consumer preferences andmaintain favorable perceptions of our brand image by our target cust
176、omers.If we are unable to successfully appeal to and engagewith our target customers,our business and results of operations may be materially and adversely affected.If we are unable to maintain or upgrade our information technology or computer systems or if such systems are damaged orcease to functi
177、on properly,our operations may be disrupted or become less efficient.We depend on a variety of information technology and computer systems for the efficient functioning of our business.We rely oncertain hardware,telecommunications and software vendors to maintain and periodically upgrade many of the
178、se systems so that wecan continue to support our business.Various components of our information technology and computer systems,includinghardware,networks,and software,are licensed to us by third party vendors.We rely extensively on our information2025/2/11 22:17big-20240203https:/www.sec.gov/Archiv
179、es/edgar/data/768835/000076883524000026/big-20240203.htm18/122112025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm19/122Table of Contentstechnology and computer systems to process transactions,summarize results,and manage our business,includi
180、ng management anddistribution of our inventory.Our information technology and computer systems are subject to damage or interruption from poweroutages,computer and telecommunications failures,computer viruses,cyberattacks or other security breaches,obsolescence,catastrophic events and extreme weathe
181、r conditions such as fires,floods,earthquakes,tornados and hurricanes,acts of war orterrorism,and usage errors by our employees or our contractors.In recent years,we have begun using vendor-hosted solutions forcertain of our information technology and computer systems,which are more exposed to telec
182、ommunication failures.If our information technology or computer systems are damaged or cease to function properly,we may have to make a significantinvestment to fix or replace them,and we may suffer loss of critical data and interruptions or delays in our operations as a result.Any material interrup
183、tion experienced by our information technology or computer systems could negatively affect our business andresults of operations.Costs and potential interruptions associated with the implementation of new or upgraded systems andtechnology or with maintenance or adequate support of our existing syste
184、ms could disrupt or reduce the efficiency of our business.If we are unable to retain existing and/or secure suitable new store locations under favorable lease terms,our financialperformance may be negatively affected.We lease almost all of our stores,and a significant number of the store leases expi
185、re or are up for renewal each year,as noted belowin“Item 2.Properties”and in MD&A in this Form 10-K.Our strategy to improve our financial performance includes increasingsales while managing the occupancy cost of each of our stores.A primary component of our sales growth strategy is increasing ourcom
186、parable store sales,which requires renewing many leases each year.Additional components of our sales growth strategyinclude opening new store locations,either as an expansion in an existing market or as an entrance into a new market,andrelocating certain existing stores to new locations within exist
187、ing markets.If we are unable to negotiate favorable lease renewalsand/or new store leases under unfavorable lease terms or at all,our financial position,results of operations,and liquidity may benegatively affected.Shareholder activism could result in potential operational disruption,divert our reso
188、urces and managements attention andhave an adverse effect on our business.Shareholder activism,which may arise in various forms and situations,could divert managements attention from its currentstrategies,require us to incur substantial legal,consulting,and public relations fees,and could result in
189、potential operationaldisruption.Further,any perceived uncertainties as to our future direction and control could result in the loss of potential businessopportunities and may make it more difficult to attract and retain qualified employees,any of which could adversely affect ourbusiness and operatin
190、g results.Any perceived uncertainties could also adversely affect the price and volatility of our stock.Market and Competitive RisksFurther deterioration in general economic conditions,disposable income levels,and other conditions,such as inflation,unseasonable weather,pandemic diseases,or global ev
191、ents,could lead to reduced consumer demand for our merchandise,andmaterially adversely affect our revenues and gross margin.Our results of operations are directly and materially impacted by the health of the U.S.economy.Our business and financialperformance may be adversely impacted by current and f
192、uture economic conditions,including factors that may restrict or otherwisenegatively impact consumer financing,disposable income levels,unemployment levels,energy costs and interest rates,recession,inflation,and other matters,such as tax reform,natural disasters,climate change,pandemic diseases,wars
193、,or terrorist activities,that influence consumer spending.Specifically,our Soft Home,Hard Home and Other,Furniture and Seasonal merchandisecategories are threatened when disposable income levels are negatively impacted by economic conditions.In 2022 and 2023,theU.S.experienced historically high infl
194、ation,which together with general economic conditions,negatively impacted disposableincome levels,the discretionary spending of our customers and our business and results of operation.If inflation remains athistorically high levels and/or general economic conditions further deteriorate,disposable in
195、come levels,discretionary spendingand our business and results of operations could be materially adversely affected.Additionally,the net sales of cyclical product offerings in our Seasonal category may be threatened when we experience extendedperiods of unseasonable or extreme weather,including unse
196、asonable weather caused by climate change.Inclement weather can alsonegatively impact our Furniture category,as many customers transport the product home personally.In particular,the economicconditions and weather patterns of four states(California,Texas,Florida,and Ohio)are important as approximate
197、ly 31%of ourcurrent stores operate and 32%of our 2023 net sales occurred in these states.122025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm20/122Table of ContentsIf we are unable to compete effectively in the highly competitive discount ret
198、ail industry,our business and results of operationsmay be materially adversely affected.The discount retail industry,which includes both traditional brick and mortar stores and online marketplaces,is highly competitive.As discussed in Item 1 of this Form 10-K,we compete for customers,products,employ
199、ees,real estate,and other aspects of ourbusiness with a number of other companies.Some of our competitors have broader distribution(e.g.,more stores and/or a moreestablished online presence),and/or greater financial,marketing,and other resources than us.It is possible that increasedcompetition,signi
200、ficant discounting,improved performance by our competitors,an inability to distinguish our brand from ourcompetitors,or failure to effectively promote our brand image to younger generations may reduce our market share,gross margin,and operating margin,and may materially adversely affect our business
201、 and results of operations.If we are unable to compete effectively in the omnichannel retail marketplace,our business and results of operations may bematerially adversely affected.Competition from other retailers in the online retail marketplace is intense and growing.Certain of our competitors,incl
202、udingseveral pure online retailers,have established online operations that we compete against for customers and products.It is possiblethat the competition in the online retail space may reduce our market share,gross margin,and operating margin,and maymaterially adversely affect our business and res
203、ults of operations in other ways.Our operations include an e-commerce platformwith multiple fulfillment options to enhance our omnichannel experience.Operating an e-commerce platform is a complex,rapidlyevolving and expensive undertaking.We must keep pace with changing customer expectations and new
204、developments.There is noguarantee that the resources we have applied to this effort will increase revenues or improve operating performance.If our onlineretailing initiatives do not meet our customers expectations,the initiatives may reduce our customers desire to purchase goodsfrom us both online a
205、nd at our brick and mortar stores and may materially adversely affect our business and results of operations.In addition,customers routinely use technology and digital platforms to rapidly compare products and prices and purchaseproducts,among other things.Once purchased,customers seek various deliv
206、ery options for those products.Customers often expectquick,timely,and low-price or free delivery and/or convenient pickup options.We must anticipate and adapt to these purchasingprocess changes.Further,more online sales with direct fulfillment or curbside pickup may reduce the amount of in-store tra
207、ffic,which could reducethe opportunities for cross-selling of merchandise in-store and could reduce our overall sales.Fluctuation in commodity prices,including but not limited to diesel fuel and other fuels used by utilities to generate power,could materially adversely impact our gross margin and op
208、erating profit.Transporting merchandise,supplies,fixtures,and other materials to and from our distribution centers and stores requires significantvolumes of diesel fuel and other fuels.As a result,fluctuations in the prices of diesel fuel and other fuels,including increases infuel prices,directly im
209、pact the carrying cost of inventory,the cost of outbound transportation from our distribution centers to ourstores,and the cost to transport other materials and supplies.Additionally,we consume significant volumes of electricity andnatural gas to heat,cool,and operate equipment in our stores and dis
210、tribution centers.Our utility providers depend on various fuelsto generate and transport electricity and natural gas,the cost of which is typically passed through to us as the consumer.A rise inthe cost of diesel fuels and other fuels,including fuels used to generate and transport electricity and na
211、tural gas could materiallyadversely impact our gross margins and our operating profit.Cybersecurity RisksIf we are unable to secure customer,employee,vendor and/or company data,our systems could be compromised,our reputationcould be damaged,and we could be subject to penalties or lawsuits.In the nor
212、mal course of business,we process and collect relevant data about our customers,employees and vendors.The protectionof our customer,employee,vendor and company data and information is critical to us.We have implemented policies,proceduresand technologies designed to safeguard our customers debit and
213、 credit card information and other private data,our employees andvendors private data,and our records and intellectual property.We utilize third-party service providers in connection with certaintechnology related activities,including credit card processing,website hosting,data encryption and softwa
214、re support.We requirethese providers to take appropriate measures to secure such data and information and assess their ability to do so.2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm21/122132025/2/11 22:17big-20240203https:/www.sec.gov/Ar
215、chives/edgar/data/768835/000076883524000026/big-20240203.htm22/122Table of ContentsDespite our policies,technologies and other information security measures,we cannot be certain that our information technologysystems or the information technology systems of our third-party service providers are prev
216、enting,containing,or detecting,or willbe able to prevent,contain or detect all cyberattacks,cyberterrorism,or security breaches.As evidenced by other retailers who havesuffered serious security breaches,we may be vulnerable to data security breaches and data loss,including cyberattacks.A materialbre
217、ach of our security measures or our third-party service providers security measures,the misuse of our customer,employee,vendor and company data or information or our failure to comply with applicable privacy and information security laws andregulations could result in the exposure of sensitive data
218、or information,attract a substantial amount of negative media attention,damage our customer or employee relationships and our reputation and brand,distract the attention of management from their otherresponsibilities,subject us to government enforcement actions,private litigation,penalties and costl
219、y response measures,and resultin lost sales and a reduction in the market value of our common shares.While we have taken actions to mitigate our financial andoperational risk,in the event we experience a material data or information security breach,our protection may not be sufficient tocover the im
220、pact to our business.In addition,the data and information security and privacy regulatory environment is increasingly demanding,as new and revisedrequirements are frequently imposed across our business.Compliance,or failure to comply,with more demanding privacy andinformation security laws and stand
221、ards may result in significant expense due to increased investment in technology,developmentof new operational processes,and exposure to litigation or regulatory action.Human Capital RisksIf we are unable to attract,train,and retain highly qualified associates while also controlling our labor costs,
222、our financialperformance may be negatively affected.Our customers expect a positive shopping experience,which is driven by a high level of customer service from our associates and aquality presentation of our merchandise.Additionally,our customers expect merchandise to be in stock in our stores and
223、online,which is partially driven by the timely delivery of merchandise from our distribution centers to our stores.To grow our operationsand meet the needs and expectations of our customers,we must attract,train,and retain a large number of highly qualifiedassociates,and also control labor costs.We
224、compete with other retail businesses for many of our associates and many of our storeand distribution center positions have historically had high turnover rates,which can increase training and retention costs.Inaddition,our ability to control labor costs is subject to numerous external factors,inclu
225、ding the availability of a sufficient numberof qualified persons in the work force,prevailing wage rates,the impact of federal,state,or local minimum wage legislation,theimpact of legislation or regulations governing labor relations or benefits,and health insurance costs.We have experienced signific
226、ant turnover in our senior management team,and our loss of additional members of our seniormanagement team or our failure to attract and retain qualified personnel,skilled workers and key officers could have anadverse effect on us.We have recently experienced significant turnover in our senior manag
227、ement team and have promoted employees to fill certain keyroles.Our business may be adversely affected by such turnover and the transitions in our senior management team and turnover atthe senior management level may create instability within the Company,which could disrupt and impede our day-to-day
228、operations,internal controls and our ability to fully implement our business plan and growth strategy.In addition,managementtransition inherently causes some loss of institutional knowledge,which can negatively affect strategy and execution,and ourresults of operations and financial condition could
229、be negatively impacted as a result.Competition for key management personnelis intense.If we fail to successfully attract,train and retain senior management with the appropriate expertise,we could experienceincreased employee turnover and harm to our business,results of operations,cash flow and finan
230、cial condition.Like mostbusinesses,our employees are important to our success and we are dependent in part on our ability to retain the services of our keymanagement,operational,compliance,finance,administrative and store associate personnel.Regulatory and Legal Liability RisksChanges in federal or
231、state legislation and regulations,including the effects of legislation and regulations on product safety andhazardous materials,could increase our cost of doing business and adversely affect our operating performance.New federal or state legislation,including new product safety and hazardous materia
232、l laws and regulations,may negatively impactour operations,increase our cost of doing business and adversely affect our operating performance.Changes in product safetylegislation or regulations may lead to product recalls and the disposal or write-off of merchandise,as well as fines or penalties and
233、reputational damage.If our merchandise and food products do not meet applicable governmental safety standards2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm23/122142025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/00
234、0076883524000026/big-20240203.htm24/122Table of Contentsor our customers expectations regarding quality or safety,we could experience lost sales,increased costs,reputational damage,andincreased legal risk.In addition,if we discard or dispose of our merchandise,particularly merchandise which is non-s
235、alable,inconsistently withapplicable waste management standards,we could expose ourselves to certain fines and litigation costs related to hazardousmaterial regulations.Our inability to comply on a timely basis with regulatory requirements,execute product recalls in a timelymanner,or consistently im
236、plement waste management standards,may result in fines or penalties which could have a materialadverse effect on our financial results.In addition,negative customer perceptions regarding the safety of the products we sell couldcause us to lose market share to our competitors.If this occurs,it may be
237、 difficult for us to regain lost sales.We are subject to periodic litigation and regulatory proceedings,including Fair Labor Standards Act,state wage and hour,andshareholder class action lawsuits,which may adversely affect our business and financial performance.From time to time,we are involved in l
238、itigation and regulatory actions,including various collective,class action or shareholderderivative lawsuits that may be brought against us for alleged violations of the Fair Labor Standards Act,state wage and hour laws,sales tax and consumer protection laws,False Claims Act,federal securities laws
239、and environmental and hazardous wasteregulations among others.Due to the inherent uncertainties of litigation,we may not be able to accurately determine the impact onus of any future adverse outcome of such proceedings.The ultimate resolution of these matters could have a material adverseimpact on o
240、ur financial condition,results of operations,and liquidity.In addition,regardless of the outcome,these proceedingscould result in substantial cost to us and require us to devote substantial attention and resources to defend ourselves.For adescription of certain current legal proceedings,see Note 9 t
241、o the accompanying consolidated financial statements.We may be adversely affected by legal,regulatory or market responses to climate change.Growing concern over climate change has led policy makers in the U.S.to consider the enactment of legislative and regulatoryproposals that would impose mandator
242、y requirements on greenhouse gas emissions.Such laws,if enacted,are likely to impact ourbusiness in a number of ways.For example,we use natural gas,diesel fuel,gasoline and electricity in conducting our operations.Increased government regulations to limit carbon dioxide and other greenhouse gas emis
243、sions may result in increased compliancecosts and legislation or regulation affecting energy inputs,which could materially affect our profitability.Compliance with any newor more stringent laws or requirements,or stricter interpretations of existing laws,could require additional expenditures by us o
244、rour suppliers.Our inability to appropriately respond to such changes could adversely impact our business,financial condition,results of operations or cash flows.Our current insurance program may expose us to unexpected costs and negatively affect our financial performance.Our insurance coverage is
245、subject to deductibles,self-insured retentions,limits of liability and similar provisions that we believeare prudent based on our overall operations.We may incur certain types of losses that we cannot insure or that we believe are noteconomically reasonable to insure,such as losses due to acts of wa
246、r,employee and certain other crime,some natural disasters,andpandemic diseases.If we incur these losses and they are material,our financial condition and results of operations could suffer.Certain material events may result in sizable losses for the insurance industry and adversely impact the availa
247、bility of adequateinsurance coverage or result in excessive premium increases.To offset negative cost trends in the insurance market,we may electto self-insure,accept higher deductibles or reduce the amount of coverage in response to these market changes.In addition,we self-insure a significant port
248、ion of expected losses under our workers compensation,general liability,including automobile,and grouphealth insurance programs.Unanticipated changes in any applicable actuarial assumptions and management estimates underlyingour recorded liabilities for these self-insured losses,including potential
249、increases in medical and indemnity costs,could result insignificantly different expenses than expected under these programs,which could have a material adverse effect on our financialcondition and results of operations.Although we continue to maintain property insurance for catastrophic events,we ar
250、e self-insured for losses up to the amount of our deductibles.If we experience a greater number of self-insured losses than we anticipate,our financial performance could be adversely affected.Financial RisksIf we are unable to comply with the terms of the 2022 Credit Agreement and/or the Term Loan F
251、acility,our capital resources,financial condition,results of operations,and liquidity may be materially adversely affected.We borrow funds under our$900 million five-year asset-based revolving credit facility(as amended,the“2022 CreditAgreement”),from time to time depending on operating or other cas
252、h flow requirements.In addition,on April 18,2024 we entered2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm25/122into a Credit Agreement(the“Term Loan Facility”)that provides for a“first in,last out”delayed draw term loan facility in anaggr
253、egate committed amount of up to$200 million.152025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm26/122Table of ContentsThe 2022 Credit Agreement and the Term Loan Facility contain customary affirmative and negative covenants(including,whereap
254、plicable,restrictions on our ability to,among other things,incur additional indebtedness,pay dividends,redeem or repurchasestock,prepay certain indebtedness,make certain loans and investments,dispose of assets,enter into restrictive agreements,engagein transactions with affiliates,modify organizatio
255、nal documents,incur liens and consummate mergers and other fundamentalchanges)and events of default,including a cross default to other material indebtedness.In addition,both the 2022 CreditAgreement and the Term Loan Facility require us to comply with an Excess Availability Covenant(as defined in No
256、te 13 to theaccompanying consolidated financial statements).These covenants could impose significant operating and financial limitations andrestrictions on us,including restrictions on our ability to enter into particular transactions that we believe are advisable or necessaryfor our business.Our ab
257、ility to comply with these covenants and other provisions in the 2022 Credit Agreement and/or the TermLoan Facility may be affected by changes in our operating and financial performance,current general business and economicconditions or changes in those conditions,adverse regulatory developments,or
258、other events beyond our control.A violation ofthese covenants would result in a default under the 2022 Credit Agreement and/or the Term Loan Facility,which would permit thelenders to restrict our ability to further access the 2022 Credit Agreement and/or the Term Loan Facility for loans and,if appli
259、cable,letters of credit and could require the immediate repayment of any outstanding loans under the 2022 Credit Agreement and/or theTerm Loan Facility.Our failure to comply with these covenants may have a material adverse effect on our business,financialcondition,results of operations,and liquidity
260、.If we are unable to borrow under the 2022 Credit Agreement and/or the Term LoanFacility,we may not have the necessary cash resources for our operations and,if any event of default occurs under the 2022 CreditAgreement and/or the Term Loan Facility,there is no assurance that we would have the cash r
261、esources available to repay suchaccelerated obligations,refinance such indebtedness on commercially reasonable terms,or at all,or cash collateralize our letters ofcredit,which would have a material adverse effect on our business,financial condition,results of operations and liquidity.In addition,our
262、 ability to borrow under the 2022 Credit Agreement and the Term Loan Facility is limited by the amount of theapplicable borrowing base under each facility.The borrowing base under the Term Loan Facility is calculated based on specifiedpercentages of eligible inventory(including in-transit inventory)
263、,credit card receivables,real estate,fixtures,machinery andequipment,subject to customary exceptions and reserves.The borrowing base under the 2022 Credit Agreement is calculated basedon specified percentages of eligible inventory(including in-transit inventory)and credit card receivables,subject to
264、 customaryexceptions and reserves,including the Term Pushdown Reserve(as defined in Note 13 to the accompanying consolidated financialstatements).Any negative impact on the elements of our borrowing bases,including a further decline in our business,could reduce ourborrowing capacity under the 2022 C
265、redit Agreement and/or the Term Loan Facility,which could have a material adverse effect onour business,financial condition,results of operations,and liquidity.We may be unable to generate sufficient cash flow to satisfy our debt service obligations,which could have a material adverseeffect on our b
266、usiness,financial condition and results of operations.Our ability to make principal and interest payments when due,or refinance our indebtedness will depend on,among other things,our ability to generate cash in the future and other factors that affect our financial and operating performance includin
267、g economicconditions and other financial,competitive,legislative,regulatory,tax and other factors,many of which are beyond our control.Ifour business does not generate sufficient cash flow from operations,in the amounts projected(which are based on a number ofassumptions which involve significant ju
268、dgments and estimates of future performance,borrowing capacity and credit availability)or at all,or if future borrowings are not available to us in amounts sufficient to fund our liquidity needs,our business,financialcondition and results of operations could be materially adversely affected.There ca
269、n be no assurance that our cash flow fromoperations and other internal and external sources of liquidity will at all times be sufficient for our cash requirements.If we cannotgenerate sufficient cash flow from operations to make scheduled principal and interest payments,we may need to refinance all
270、or aportion of our indebtedness on or before maturity,sell assets,delay capital expenditures,seek additional debt or equity or take otheractions.There can be no assurance that any of these actions would be successful.In addition,our ability to obtain any additionalfinancing or refinance any of our i
271、ndebtedness would depend on many factors,including our existing level of indebtedness andrestrictions imposed by our indebtedness,historical business performance,financial projections,the value and sufficiency ofcollateral,prospects and creditworthiness,external economic conditions and general liqui
272、dity in the credit and capital markets.Theterms of the 2022 Credit Agreement,the Term Loan Facility,or future debt agreements may also restrict us from effecting any ofthese alternatives without an amendment or consent which may not be obtainable.Further,changes in the credit and capitalmarkets,incl
273、uding market disruptions and interest rate fluctuations,may increase the cost of financing,make it more difficult toobtain favorable terms,or further limit or restrict our access to these sources of future liquidity.Our inability to obtain additionalfinancing or refinance any of our indebtedness on
274、commercially reasonable terms or at all or to effect any other action relating toour indebtedness on satisfactory terms or at all could have a material adverse effect on our business,financial condition and resultsof operations.2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835
275、/000076883524000026/big-20240203.htm27/122162025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm28/122Table of ContentsBecause we do not intend to pay cash dividends in the near term,stockholders may not receive any return on investment unlesst
276、hey are able to sell their common stock for a price greater than their purchase price,and we cannot guarantee that we willcontinue to repurchase our common stock pursuant to our stock repurchase program.The continued operation and expansion of our business will require substantial funding.Accordingl
277、y,we do not anticipate that wewill pay any cash dividends on shares of our common stock in the near term.Any determination to pay dividends in the future willbe at the discretion of our Board of Directors and will depend upon results of operations,financial condition,contractualrestrictions,includin
278、g those under agreements governing our existing indebtedness,any potential future indebtedness we mayincur,restrictions imposed by applicable law and other factors our Board of Directors deems relevant.Accordingly,if stockholderspurchase shares of our common stock,a gain on investment will depend on
279、 an increase in the price of our stock,which may neveroccur.Furthermore,although our Board of Directors has authorized a share repurchase program,we are not obligated to make anypurchases under the program and we may discontinue it at any time.For example,during Fiscal 2020 we temporarily suspendedo
280、ur share repurchase program in response to uncertainty caused by the COVID-19 pandemic.We have not made any repurchasesunder our share repurchase program since the fourth quarter of 2021.A continued increase in operating losses or failure to achieve forecasted results may impair our ability to reali
281、ze the value ofour long-lived assets.We are required by accounting rules to periodically assess our property and equipment,operating lease right-of-use assets,andintangible assets for impairment and recognize an impairment loss,if necessary.In performing these assessments,we use ourhistorical financ
282、ial performance to determine whether we have potential impairments or valuation concerns and as evidence tosupport our assumptions about future financial performance.A significant decline in our financial performance could negativelyaffect the results of our assessments of the recoverability of our
283、property and equipment,operating lease right-of-use assets,deferred tax assets,and our intangible assets and trigger the impairment of these assets.For example,we incurred$68.4 millionand$148.5 million of impairments relating to underperforming stores in 2022 and 2023,respectively.Impairment charges
284、 takenagainst property and equipment,operating lease right-of-use assets,and intangible assets could be material and could have amaterial adverse impact on our capital resources,financial condition,results of operations,and liquidity.In 2023,we also recordeda valuation allowance of$146.0 million aga
285、inst our deferred tax assets(see Note 8-Income Taxes for more information on thevaluation allowance).Failure to achieve forecasted results could have a material adverse impact on the recoverability of thesedeferred tax assets.Other RisksWe also may be subject to a number of other factors which may,i
286、ndividually or in the aggregate,materially adversely affect ourbusiness,capital resources,financial condition,results of operations and liquidity.These factors include,but are not limited to:Changes in governmental laws,case law and regulations,including changes that increase our effective tax rate,
287、comprehensive tax reform,or other matters related to taxation;Changes in accounting standards,including new interpretations and updates to current standards;Events or circumstances could occur which could create bad publicity for us or for the types of merchandise offered in ourstores which may nega
288、tively impact our business results including our sales;Infringement of our intellectual property,including the Big Lots trademarks,could dilute their value;andOther risks described from time to time in our filings with the SEC.Item 1B.Unresolved Staff CommentsNone.172025/2/11 22:17big-20240203https:
289、/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm29/122Table of ContentsItem 1C.CybersecurityRisk Management and StrategyThe Company has developed an information security program for assessing,identifying and managing material risks fromcybersecurity threats.The program inc
290、ludes policies and procedures that govern how the Companys security measures andcontrols are developed,implemented,and maintained.The Company conducts a cybersecurity risk assessment,based on a methodand guidance from a recognized national standards organization,at least annually.The Company selects
291、 the security controls it usesto address cybersecurity risks based on its annual risk assessment,additional risk-based analysis performed by the Company and itsevaluation of various factors,including the likelihood and severity of risk,the impact on the Company and others if a riskmaterializes,the f
292、easibility and cost of controls,and the impact of controls on operations and others.Security controls used by theCompany include endpoint threat detection and response(EDR),identity and access management(IAM),privileged accessmanagement(PAM),logging and monitoring involving the use of security infor
293、mation and event management(SIEM),multi-factorauthentication(MFA),firewalls and intrusion detection and prevention,and vulnerability and patch management.The Company engages third-party security firms to provide or operate some of these security controls and technology systems.Forexample,third parti
294、es conduct assessments such as vulnerability scans and penetration testing.The Company uses a variety ofprocesses to address cybersecurity threats related to the use of third-party technology and services,including pre-acquisitiondiligence,imposition of contractual obligations,and performance monito
295、ring.The Company has a written incident response plan and periodically conducts tabletop exercises to enhance incident responsepreparedness.The Company also maintains business continuity and disaster recovery plans to prepare for a potential disruption intechnology.The Company is a member of an indu
296、stry cybersecurity intelligence and risk sharing organization.Employees undergosecurity awareness training when hired and at least semi-annually thereafter.The Company has an Enterprise Risk Management(ERM)function to address enterprise risks,including cybersecurity.ERM is ledby our Enterprise Risk
297、Council,which consists of members of the CEOs staff.The Risk Council oversees the design and executionof the ERM function to allow for the identification,assessment,prioritization,management,monitoring and reporting of materialrisks.This includes an annual risk assessment and quarterly updates of th
298、e risk profile given current operating conditions.The RiskCouncil meets quarterly and provides reporting to the Board of Directors and relevant Board Committees given the nature ofspecific risks identified,which includes cybersecurity risk.The Company may not be able to fully,continuously,and effect
299、ively implement security controls as intended.As described above,we utilize a risk-based approach and judgment to determine the security controls we implement and it is possible that we may notimplement appropriate controls if we do not recognize or underestimate a particular risk.In addition,securi
300、ty controls,no matterhow well designed or implemented,may only mitigate and not fully eliminate risks.Events,when detected by security tools orthird parties,may not always be immediately understood or acted upon.Governance.Our Chief Information Security Officer(CISO)has primary responsibility for th
301、e development,operation,and maintenance of ourinformation security program,including assessing and managing risk from cybersecurity threats.The Companys CISO has 30years of information technology experience,with 17 years focused specifically on information security and risk management.Hecombines org
302、anizational management and leadership skills with a high degree of technical knowledge,the result of hands-oninformation technology and security experience.The CISO provides regular security updates to key members of our management team,quarterly Audit Committee briefings,andad-hoc security updates
303、if a situation requires.Security Risk Assessment results are provided to both the Enterprise Risk Council aswell as the Audit Committee as part of the quarterly briefings.The Board of Directors has delegated oversight of the informationsecurity program to the Audit Committee.The Company is not aware
304、 of any cybersecurity threat or any material cybersecurity data breach to date,including as a result of anyprevious cybersecurity incidents,that has materially affected or is reasonably likely to materially affect us,including our businessstrategy,results of operations,or financial condition.2025/2/
305、11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm30/122182025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm31/122Table of ContentsItem 2.PropertiesRetail OperationsAll of our stores are loca
306、ted in the U.S.,predominantly in strip shopping centers,and have an average store size of approximately33,477 square feet,of which an average of 23,177 is selling square feet.Our physical facilities used for our retail operations,warehouse and distribution,and corporate offices are suitable for the
307、purposes for which they were designed.For additionalinformation about the properties in our retail operations,see the discussion under the caption“Real Estate”in“Item 1.Business”and under the caption“Operating Strategy-Real Estate”in MD&A in this Form 10-K.The average capital expenditures invested t
308、o open a new store in a leased facility during 2023 was approximately$1.0 million,which includes the cost of construction and fixtures,excludes any landlord-provided funding,and reflects the benefit of lowercapital expenditures at certain of our stores where our landlord completed construction.All o
309、f our stores are leased,except for onestore we own in each of California,New Mexico,and Ohio.Additionally,we own two closed sites which we are not currently operating and are available for sale.Since these owned sites areno longer operating as active stores,they are excluded from our store counts at
310、 February 3,2024.In the third quarter of 2023,wecompleted the sale of 23 owned store locations in sale and leaseback transactions(see Note 10 to the accompanying consolidatedfinancial statements for additional information on the sale of real estate).In 2023,separate from the sale and leasebacktransa
311、ctions,the Company completed the sale of three owned store locations that were classified as held for sale at the end of fiscal2022(see Note 2 to the accompanying consolidated financial statements for more information on the sale of real estate).Store leases generally obligate us for fixed monthly r
312、ental payments plus the payment,in most cases,of our applicable portion ofreal estate taxes,common area maintenance costs(“CAM”),and property insurance.Some leases require the payment of apercentage of sales in addition to minimum rent.Such payments generally are required only when sales exceed a sp
313、ecified level.Our typical store lease is for an initial minimum term of approximately ten years with multiple five-year renewal options.20 of ourstore leases have sales termination clauses that allow us to exit the location at our option if we do not achieve certain sales volumeresults.An additional
314、 21 store leases have generic early termination clauses that allow us to exit the location upon providingsufficient notice to the landlord.The following table summarizes the number of store lease expirations in each of the next five fiscal years and the total thereafter.As stated above,many of our s
315、tore leases have renewal options.The table also includes the number of leases that are scheduled toexpire each year that do not have a renewal option.The table includes leases for five stores with more than one lease(e.g.,storelease and land lease)and one lease for a store not yet open,and excludes
316、two month-to-month leases.Fiscal Year:Expiring LeasesLeases WithoutOptions202417231202521231202624546202717140202821439Thereafter37724Warehouse and DistributionAt February 3,2024,we leased and operated approximately 9.0 million square feet of distribution center and warehouse space infive regional d
317、istribution facilities strategically located across the U.S.The regional distribution centers utilize warehousemanagement technology,which we believe enables accurate and efficient processing of merchandise from vendors to our retailstores.The combined output of our regional distribution centers was
318、 approximately 1.7 million merchandise cartons per week in2023.Certain vendors deliver merchandise directly to our stores when it supports our operational goal to deliver merchandise fromour vendors to the sales floor in the most efficient manner.We operate an e-commerce fulfillment center out of ou
319、r Columbus,OHwarehouse.To supplement our Columbus,OH e-commerce fulfillment center,we fulfill direct-ship e-commerce orders from 66 ofour store locations,which we strategically selected based on geographic location,size,and other relevant2025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/d
320、ata/768835/000076883524000026/big-20240203.htm32/122192025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm33/122Table of Contentsfactors.In addition,we began direct shipping a limited assortment out of our distribution center in California to f
321、urther supplemente-commerce orders.Distribution centers and warehouse space,and the corresponding square footage of the regional distribution centers,by location atFebruary 3,2024,were as follows:LocationYear OpenedTotal Square FootageNumber of Stores Served(Square footage in thousands)Columbus,OH19
322、893,559338Montgomery,AL19961,411315Tremont,PA20001,295302Durant,OK20041,297227Apple Valley,CA20191,416210Total8,9781,392During 2023,we ceased all business operations at our FDCs and subleased our McDonough,GA and Merrillville,IN FDClocations.We terminated the lease for the FDC located in Lacey,WA an
323、d are actively marketing the remaining FDC for sublease.For more information regarding our warehouse and distribution centers,see the discussion under the caption“Warehouse andDistribution”in“Item 1.Warehouse and Distribution”of this Form 10-K.We will continue to evaluate our supply chain needsbased
324、 on projected purchasing volumes and adjust the capacity of our distribution and fulfillment network accordingly.Corporate OfficeWe own a facility in Columbus,Ohio that serves as our corporate headquarters.Item 3.Legal ProceedingsFor information regarding certain legal proceedings to which we have b
325、een named a party or are subject,see Note 9 to theaccompanying consolidated financial statements.Item 4.Mine Safety DisclosuresNone.202025/2/11 22:17big-20240203https:/www.sec.gov/Archives/edgar/data/768835/000076883524000026/big-20240203.htm34/122Table of ContentsSupplemental Item.Information about
326、 our Executive OfficersOur executive officers at April 18,2024 were as follows:NameAgeOffices HeldOfficer SinceBruce K.Thorn56President and Chief Executive Officer2018Jonathan E.Ramsden59Executive Vice President,Chief Financial Officer and ChiefAdministrative Officer2019Ronald A.Robins,Jr.60Executiv
327、e Vice President,Chief Legal and Governance Officer,GeneralCounsel and Corporate Secretary2015Michael A.Schlonsky57Executive Vice President,Chief Human Resources Officer2000Bruce K.Thorn is our President and Chief Executive Officer.Before joining Big Lots in September 2018,he served as Presidentand
328、Chief Operating Officer of Tailored Brands,Inc.,a specialty retailer of mens tailored clothing and formal wear,from 2015 to2018.Mr.Thorn also held various enterprise-level roles with PetSmart,Inc.,most recently as Executive Vice President,StoreOperations,Services and Supply Chain,as well as leadersh
329、ip positions with Gap,Inc.,Cintas Corp,LESCO,Inc.and The UnitedStates Army.Mr.Thorn also serves on the board of directors of Caleres,Inc.Jonathan E.Ramsden is responsible for financial reporting and controls,financial planning and analysis,treasury,riskmanagement,tax,internal audit,investor relation
330、s,real estate,asset protection,and merchandise planning and allocation.Mr.Ramsden joined us in August 2019 as Executive Vice President,Chief Financial Officer and Chief Administrative Officer.Prior tojoining us,Mr.Ramsden served for over seven years with Abercrombie&Fitch Co.,an apparel retailer,as
331、Chief Financial Officerand then later Chief Operating Officer.Additionally,Mr.Ramsden spent 10 years as Chief Financial Officer of TBWA Worldwide,a global marketing services group,after having served as Controller of TBWAs parent,Omnicom Group Inc.Ronald A.Robins,Jr.is responsible for legal affairs,
332、corporate governance and related matters.Mr.Robins was promoted toExecutive Vice President in September 2019,and now serves as the Chief Legal and Governance Officer.Prior to that,Mr.Robinsserved as Senior Vice President,General Counsel and Corporate Secretary since joining us.Prior to joining us,Mr
333、.Robins was apartner at Vorys,Sater,Seymour and Pease LLP and also previously served as General Counsel,Chief Compliance Officer,andSecretary of Abercrombie&Fitch Co.Michael A.Schlonsky is responsible for talent management and oversight of human resources.He was promoted to Executive VicePresident in August 2015,and now serves as the Chief Human Resources Officer.He was promoted to Senior Vice Pre
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