Shares of furniture and home decor retailer, Big Lots (NYSE: BIG) were down in pre-market trading at the time of publishing on Friday after the retailer’s losses widened in Q1 to an adjusted loss of $3.40 per share versus $0.39 per share in the same period last year and were worse than analysts’ estimates of a loss of $1.73 per share.
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The company’s sales declined by 18.3% year-over-year to $1.124 billion versus analysts’ estimates of $1.19 billion.
Looking forward, the company’s Q2 outlook is also disappointing, and expects comparable sales to be down in the “high-teens range”, similar to the first quarter. The company anticipates the second quarter “gross margin rate to slightly improve versus the prior year, but remain in the low-30s range driven by significant markdowns on slow-moving seasonal merchandise” and did not provide any EPS guidance for Q2.
While the retailer did not provide any formal FY23 guidance, BIG did state that “sales and gross margin momentum will be weighted towards the back half of the year, as key actions to improve the business gain traction, and as cost reductions, including freight, continue to be realized.” Regarding cost savings, Big Lots raised its SG&A savings target to more than $100 million in 2023, and has identified “over $200 million of bottom-line opportunities across gross margin and SG&A we will be pursuing over the next 18 months.”
Analysts are bearish about BIG stock with a Strong Sell consensus rating based on four Sells and one Hold.
