Why Big Lots (BIG) Shares Are Sliding Today

Big Lots Inc BIG reported a first-quarter FY23 sales decline of 18.3% year-on-year to $1.124 billion, missing the consensus of $1.19 billion.
The decline to last year was driven by a comparable sales decrease of 18.2%.
Gross margin for the quarter decreased 180 basis points Y/Y to 34.9%. The operating loss for the quarter was $(261.2) million versus a loss of $(13.5) million a year ago.
CEO Bruce Thorn stated, "Macro-economic headwinds have created significant challenges for us, which are reflected in our results and outlook."
"While we navigate through this difficult environment, we are being very aggressive in how we are managing our business. We are significantly raising our SG&A savings target to over $100 million in 2023, and have identified over $200 million of bottom-line opportunities across gross margin and SG&A we will be pursuing over the next 18 months."
The company held $51.3 million in cash and equivalents as of Apr 29, 2023.
Inventory at the end of the quarter was $1.08 billion, an 18.8% decrease Y/Y.
Adjusted EPS loss of $(3.40) missed the analyst consensus of $(1.77).
On May 24, 2023, the company entered a letter of intent for a sale and leaseback of the Apple Valley, California, distribution center; corporate headquarters building in Columbus, Ohio, and most of the remaining owned stores for $340 million.
On May 23, 2023, the Board of Directors declared a suspension of the dividend.
Outlook: Big Lots sees Q2 comparable sales to be down in the high-teens range.
The company expects Q2 gross margin rate to slightly improve, but remain in the low-30s range, driven by significant markdowns on slow-moving seasonal merchandise.
The company did not provide EPS guidance.
Price Action: BIG shares are trading lower by 16.6% at $6.01 on the last check Friday.

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Why Big Lots Shares Are Sliding Today

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