Shares of Big Lots (NYSE:BIG) tanked in pre-market trading after the company reported disappointing Q1 results. The discount retailer’s losses widened in the first quarter to an adjusted loss of $4.50 per share, compared to a loss of $3.40 per diluted share in the same period last year. This loss was wider than analysts’ consensus estimates of a loss of $3.92 per share.
BIG’s Sales Decline in Q1
Net sales for the first quarter declined by 10.2% year-over-year to $1 billion but still fell short of analysts’ expectations of $1.04 billion. The retailer’s sharp drop in sales was driven by fall of 9.9% in comparable sales and a decline in store count. Furthermore, the company’s management explained that it saw its core consumers pull back in spending on big ticket discretionary items in the first quarter.
BIG’s Q2 Outlook
For the second quarter of FY24, the company expects comp sales to improve sequentially but could fall in the “mid to high-single-digit range.” Additionally, BIG expects its Q2 adjusted operating loss to be better than last year.
The retailer anticipates that its gross margin will improve significantly year-over-year through FY24 “with a path to positive comparable sales later in the year.”
Is BIG a Good Stock to Buy?
Analysts remain bearish about BIG stock, with a Moderate Sell consensus rating based on one Hold and two Sells. Over the past year, BIG has declined by more than 50%, and the average BIG price target of $3 implies a downside potential of 14.7% from current levels. These analyst ratings will likely change following BIG’s Q1 results today.
