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Big Lots Inc Take Big Hit Post-Q2 Results

Big Lots Inc. (NYSE:BIG) is a discount retailer with over 1,400 locations in 47 states across the US.  Similar to other retailers such as Costco, Walmart, and BJ’s, Big Lots offers an array of merchandise categories such as furniture, seasonal, consumables, electronics and toys.  The company primarily operates through its brick-and-mortar locations as there is little information about their e-commerce sales online.

For the second quarter in a row, the company has fell short on adjusted earnings per share compared to Zack’s Consensus Estimates.  The expectations for the second-quarter were 67 cents a share, but the company reported a 12% decline year-over-year with adjusted earnings per share at 59 cents.

The company’s net sales also fell short of consensus estimates coming in at $1,222.2 million compared to the consensus estimate of $1,233 million.  Compared to this quarter last year, net sales has not grown significantly, only about 0.2% year-over-year.  Additionally, gross profits decreased to $491.4 million, which is down 0.2% year-over-year.

The retail giant has not had the best year so far, with price declining over 20% through the last 6 months, whilst the industry saw growth of about 18% on average.  Following a disappointing second-quarter results for the retailer, Big Lots Inc. shares slid over 10% in reaction to the news.  It is obvious that other retailers and e-commerce are snagging market share from Big Lots left-and-right, meaning they must change something to compete.

We’ve seen a mix of expectation beating and expectation lagging quarterly results these past few weeks from the retail sector.  What is becoming obvious is that the retailers who are focusing on their e-commerce and online presence are generally doing better than those with no explicit focus on such.  This is the age of technology and retailers must think of innovative ways to attracting and selling to customers digitally.

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