Why Big Lots Shares Are Plunging Today

  • Big Lots Inc BIG reported a first-quarter FY22 revenue decline of 15.4% year-over-year to $1.37 billion, missing the consensus of $1.46 billion.
  • Comparable sales decreased 17% versus an 11.3% increase last year. Ecommerce accounted for 7% of total sales in the quarter.
  • The gross margin for the quarter decreased 350 basis points Y/Y to 36.7%. The operating loss for the quarter was $(13.5) million.
  • The company held $61.7 million in cash and equivalents as of April 30, 2022.
  • Inventory at the end of the quarter was $1.3 billion, a 48.5% Y/Y increase.
  • EPS loss of $(0.39) missed the analyst consensus of $0.93.
  • The company's Board declared a quarterly cash dividend of $0.30 per share, payable on June 24, 2022, to shareholders of record on June 10, 2022.
  • "We believe the slowdown was caused by the spending pressure our consumers felt from higher gas prices and broader inflation, which is affecting discretionary purchases across the retail industry," said CEO Bruce Thorn. 
  • Outlook: Big Lots sees Q2 three-year comparable sales to accelerate to positive mid to high-single digits, equating to mid-to-high single-digit negative comps versus 2021.
  • BIG said it is taking aggressive actions to improve gross margin rate in the back half of the year and expects to achieve significant sequential improvement in Q3, with a Q4 that is approximately in line with the prior year's quarter. 
  • Price Action: BIG shares are trading lower by 18.8% at $24.90 in premarket on the last check Friday.
  • Photo Via Wikimedia Commons
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