Big Lots shares dive as Q1 results miss forecasts
By Benjamin Chiou
Date: Thursday 06 Jun 2024
(Sharecast News) - The share price of Big Lots plunged by a fifth on Thursday after the American discount chain reported a big drop in sales and a wider-than-expected loss in its first quarter which it blamed on a "challenging consumer environment".
The Ohio-headquartered retailer said net sales for the three months to 4 May were $1.01bn, down 10.2% on last year, with comparable sales falling by 9.9%. The consensus estimate was for sales of $1.04bn.
President and chief executive Bruce Thorn said the company missed its internal sales goals primarily due to a "continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items".
The company reported a net loss of $205m, more or less flat on the same period last year (-$206m), held back by $73m in impairment charges, fees related to its so-called Project Springboard initiative, as well as distribution centre closure costs.
Excluding these one-offs, the loss for the first quarter would have been $132 or $4.51 per share, much worse than the $3.92 per-share loss expected by the market.
Looking ahead, Big Lots said comparable sales should improve sequentially in the second quarter, with the decline easing to the mid to high single-digit range, while reduced markdowns and cost-cutting should improve gross margins.
Shares were down 20.3% at $2.81 by 1007 in New York, hitting their lowest levels since the early-1990s.
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