Big Lots reported lower sales and extended losses on a year-over-year basis in its first quarter.
Net loss was $206.1 million, or $7.10 per diluted share, versus a net loss of $11.1 million, or 39 cents per diluted share, in the year-previous quarter, the company reported. Adjusted for one-time events, net loss was $98.7 million, or $3.40 per diluted share. Big Lots took no adjustments in the year-before period.
Operating loss was $261.2 million versus an operating loss of $13.5 million in the year-earlier period.
A Yahoo Finance analyst consensus estimate called for loss per adjusted diluted share of $1.82 and sales of $1.19 billion.
Comparable sales fell 18.2% in the quarter year over year, the company noted. Net sales were $1.12 billion versus $1.37 billion in the year-prior quarter.
In reporting the first quarter results, Bruce Thorn, Big Lots president and CEO, said, “Our business has grown significantly over the past two years as we benefitted not only from home-related spending, but (also) from the positive growth fueled by our Operation North Star initiatives. We have greatly improved our customer shopping experience, evidenced by an all-time high Net Promoter Score of 85% in Q1. E-commerce remains a standout, and now accounts for over 7% of our sales, with same-day deliveries growing 20% over last year. Our Broyhill and Real Living private-label brands reached close to 30% of our sales, positioning us well to pursue consumer trade-down opportunities ahead. These accomplishments helped get three-year comparable sales growth off to a solid start in February and March, but trends materially slowed in April, resulting in a need to increase markdowns.”
Thorn added, “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. As a result, we missed our sales plan by approximately $100 million, the vast majority in April, while supply chain impacts across gross margin and SG&A continued to be significant headwinds. We have reacted quickly to the changes in consumer demand by increasing value offerings to our customers, resulting in a significant acceleration to three-year comparable sales growth in the mid-teens in May. We expect the environment to remain challenging, and we remain highly focused on managing the business prudently, which includes aggressively right-sizing our inventories over the course of Q2. We are focused on opening price points that drive traffic and improving gross margin rates through capitalizing on significant close-out opportunities, more targeted pricing and promotions, minimizing supply chain charges, and reducing shrink. We are also accelerating SG&A cost reductions to generate over $70 million in additional savings this year. Further, we are strengthening our balance sheet by temporarily scaling back capital expenditures associated with new store openings and remodels.