Big Lots' Q4 Results Soft & Outlook Disappointing, Says Analyst

Telsey Advisory Group analyst Joseph Feldman reiterated a Market Perform rating on the shares of Big Lots, Inc. NYSE: BIG) with a price target of $16.
Big Lots reported soft 4Q22 results, with weak sales both on absolute and relative basis to the Street, while profitability and earnings beat expectations but were still negative.
The company reported 4Q22 adjusted EPS of ($0.28) versus the analyst’s estimate of ($0.85).
The analyst believes Big Lots business was impacted by the slowdown in consumer spending on big-ticket discretionary items, given pressure from inflation, as well as higher supply chain and operating costs.
The 7.3% inventory decrease over the 5.3% increase at the end of 3Q22, the analyst said, is a solid improvement.
Big Lots' negative 4Q22 earnings and softer 1Q23 outlook keeps the analyst on the sideline.
Like many retailers, it appears that COVID-19 helped the company over-earn in the past two years, with the reset underway, added the analyst.
Big Lots has a lot of initiatives to improve the business, but need to wait to see results, said the analyst.
Price Action: BIG shares closed higher by 5.68% at $14.51 on Thursday.
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