Big Lots Earnings Miss Estimates; Shares Tumble 18%

COLUMBUS, Ohio – Big Lots, Inc. (NYSE: NYSE:) experienced a significant decline in its first-quarter performance, missing analyst expectations for both earnings and revenue.

As a result, Big Lots shares fell about 18% in premarket Thursday trading.

The discount retailer reported an adjusted EPS loss of $4.51, which was notably lower than the analyst estimate of a $3.92 loss. Revenue also fell short, coming in at $1.01 billion against the consensus estimate of $1.04 billion. The company’s stock plummeted 18% in response to the earnings miss and weak guidance for future performance.

In the first quarter of fiscal 2024, Big Lots saw a 10.2% drop in net sales to $1.009 billion, down from $1.124 billion in the same quarter the previous year, with comparable sales decreasing by 9.9%.

The decline was attributed to a challenging consumer environment, particularly in high-ticket discretionary items, and a slight net decrease in store count. Despite the sales downturn, the company reported a year-over-year improvement in gross margin and a reduction in adjusted operating expenses.

Bruce Thorn, President and CEO of Big Lots, acknowledged the company’s struggle to meet sales targets due to reduced consumer spending. However, he emphasized the progress made in enhancing business operations and the company’s focus on aggressive actions to stimulate positive comparable sales growth later in the year.

“We remain focused on managing through the current economic cycle by controlling the controllables,” Thorn said.

The company is undertaking initiatives to improve its product assortment, cut costs, and increase productivity, aiming for 75% bargain penetration and 50% extreme bargain penetration by year-end.

These efforts are part of Big Lots’ strategy to elevate brand relevance and drive customer traffic. Additionally, the company is ahead of schedule with Project Springboard, raising its cumulative savings target to $185 million by the end of 2024.

Despite the current financial performance not reflecting the stronger business model Big Lots is working towards, Thorn expressed confidence that the results of their strategic actions would become more apparent in the latter part of the year.

The company ended the first quarter with $289 million in liquidity, including a new $200 million term loan facility, which Thorn cited as providing significant financial flexibility.

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