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Market Overview

Big Lots Stock Falls On Missing Q2 Estimates, Weak Outlook

Big Lots Stock Falls On Missing Q2 Estimates, Weak Outlook
  • Big Lots Inc (NYSE: BIGreported a second-quarter FY21 sales decline of 11.4% year-on-year and increased 16.4% from Q2 FY19 to $1.457 billion, missing the analyst consensus of $1.48 billion.
  • Comparable sales decreased 13.2% versus a 31.3% increase last year. On a two-year basis, comparable sales increased 14.0%. 
  • Ecommerce demand grew by 10% Y/Y, driven by solid sell-through in lawn & garden assortment.
  • The gross margin for the quarter decreased 200 basis points Y/Y to 39.6%.
  • The operating margin was 3.7%, and operating income for the quarter fell 91.5% to $53.8 million.
  • The company held $293 million in cash and equivalents as of July 31, 2021.
  • EPS of $1.09 missed the analyst consensus of $1.13.
  • "Our results for the quarter were tempered by continued supply chain and freight headwinds, as well as other inflationary pressures," said CEO Bruce Thorn.
  • The company also warned of a continued supply chain crunch.
  • The company's Board declared a quarterly cash dividend of $0.30 per share, payable on September 24, 2021, to shareholders of record on September 10, 2021.
  • Outlook: Big Lots sees FY21 EPS of $5.90 - $6.05 versus the consensus of $6.74.
  • The company expects Q3 EPS of $(0.10) - $(0.20) versus the consensus of $0.09.
  • It expects mid-single-digit comparable sales decline in Q3 and gross margin to be down 175 basis points.
  • Further, the company expects the headwinds to affect Q4 adversely.
  • Price Action: BIG shares are trading lower by 2.49% at $52.87 on the last check Friday.

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