BIG stock soared Tuesday after discount furniture retailer Big Lots posted a better-than-expected loss for its Q2 results in the morning. Discount retailer Five Below releases earnings late Wednesday.
Columbus, Ohio-based Big Lots posted an adjusted loss of $3.24 per share, worsening 42% from last year. Revenue fell 15.4% to $1.14 billion. Still, the results bested analyst estimates of a loss of $4.11 per share on $1.1 billion in sales.
Big Lots reported an overall GAAP loss of $8.56 per share. That included the adjusted loss, plus an after-tax charge of $5.32 per share due to costs related to exiting leases, upcoming distribution center closing costs and other expenses.
Comparable sales decreased 14.6% during the quarter, partially driven by a decline in store count.
"Our results for Q2 illustrate that we remain in a very challenging environment, in which our core lower-income customer remains under significant pressure and has limited capacity for higher-ticket discretionary purchases," CEO Bruce Thorn said in the release.
He noted the company saw some sequential improvement during the quarter and Big Lots came in ahead of or in-line with its guidance on its key metrics. Thorn also said the consumer environment will likely remain challenging and result in negative comparable sales in the second half of the year, but there should be some slow improvements later in 2023.
For Q3, Big Lots expects comparable sales down in the low-teen range, improving modestly from Q2. Third-quarter margins are expected to improve by 200 basis points compared to last year. Big Lots declined to provide an EPS guidance.
The company forecasts Q4 comparable sales to improve slightly from its Q3 growth, declining in the high single-digit range. It sees Q4 margins rising into the high 30% range, driven by fewer markdowns, lower freight costs, cost reduction and increased productivity.
BIG Stock
Big Lots stock rallied 26.6% Tuesday following earnings. Shares tumbled 45.8% through Tuesday's close and hit a multi-decade low of 4.78 on May 31. BIG stock hadn't traded below 5 per share since the '90s.
Big Lot shares climbed 2.5% during trade Monday.
Among other retailers, FIVE stock added 2% during trade. Shoe Carnival inched higher after diving as much as 6% at the open on earnings. Chico's FAS pared gains to 1.2% after jumping nearly 11%, following mixed Q2 results.
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