Big Lots Encounters Sales Slump In Q4, Despite Margin Expansion And Reduced Inventory
Portfolio Pulse from Shivani Kumaresan
Big Lots Inc (NYSE:BIG) reported a Q4 FY23 sales decline of 7.2% year-on-year to $1.432 billion, slightly above analyst estimates. Comparable sales decreased by 8.6%. Despite the sales slump, the company saw a gross margin expansion of 170 basis points to 36.4%. The operating loss widened to $(23.7) million from $(8.1) million a year ago. Adjusted EPS was $(0.28), missing estimates. Inventory decreased by 17% Y/Y. No share repurchases were made in Q4. The company expects Q1 comp sales to improve but remain negative, with a gross margin rate expansion and a lower adjusted operating loss. BIG shares dropped 2.19% in premarket trading.
March 07, 2024 | 2:14 pm
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NEGATIVE IMPACT
Big Lots reported a Q4 sales decline but exceeded analyst expectations. Gross margin expanded, but operating losses widened and EPS missed estimates. Inventory decreased, and no share repurchases were made. Q1 outlook includes improved but still negative comp sales and a gross margin expansion. Shares fell 2.19% in premarket.
The reported sales decline and missed EPS are likely to negatively impact investor sentiment in the short term, despite the gross margin expansion and positive outlook for Q1. The premarket share price drop indicates immediate negative reaction.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100