Big Lots Swings to Q2 Net Loss As Heavy Discounting Shrinks Margins

August 30, 2022  by HFBusiness Staff in Business Strategy, Industry   

In the same quarter last year, the company reported a profit of $37.7 million or $1.09 per share.

Net sales were down 7.6 percent to $1.35 billion and gross margin fell to 32.6 percent from 39.6 percent in the same quarter last year.

The company noted that, despite the comp-store sales decline in the quarter, three-year comps were up 3.6 percent, and the most recent quarter’s comps were up 7.5 percent compared to the same quarter in 2019 – before the pandemic.

 "We remain laser focused on helping our customers navigate these challenging times by delivering outstanding value across our assortment,” said Bruce Thorn, president and CEO. “We are managing the business prudently, while working hard to build a stronger company and deliver on our commitments to our customers, associates, and shareholders." 

Thorn said inventories were reduced significantly during the quarter and should return to normal levels by the fourth quarter.

"This, in turn, better positions us to bring even more deals to our customers,” he said. “Consumers are stretched by inflation and starting to trade down more. We are here to help them with strategically adjusted opening price points and great value throughout our stores. Further, we are making our bargains/closeouts and treasures even easier to find with end-caps and signage that are simpler and more compelling."

The retailer said it expects to continue heavy promotional activity in the third quarter and said comparable-store sales are likely to decline “in the low double-digit range.”