P-J photo by Christopher Blakeslee The Big Lots location in Jamestown is pictured on Wednesday. The company is expected to close between 35 and 40 stores this year, but an SEC filing does not indicate which stores may close. Big Lots reported a net loss of $205 million in the first quarter of 2024, with net sales decreasing 10.2% compared to the prior year.
Big Lots plans to close between 35 and 40 stores this year, according to a June filing with the federal Securities and Exchange Commission.
The SEC filing doesn’t include a list of store closings, and Big Lots hasn’t announced any closings yet. No one knows what the news means for Big Lots locations in Jamestown and Dunkirk. The filing is an indication of further contraction in Big Lots’ corporate footprint after the retailer closed 53 stores in 2023. The company currently has 1,392 stores nationwide.
Further store closings weren’t mentioned in the company’s first quarter earnings conference call with investor analysts.
June’s SEC filing coincided with the release of Big Lots’ first quarter financial results. The company reported a net loss of $205 million, or $6.99 per share, for the first quarter of 2024, a period that ended May 4. Net sales for the first quarter of fiscal 2024 totaled $1.009 billion, a 10.2% decrease compared to $1.124 billion for the same period in 2023. The decline year over year, according to company officials, was driven by a comparable sales decrease of 9.9%. A net decrease in store count offset by a favorable sales shift due to the 53rd week in 2023 contributed approximately 30 basis points of sales decline compared to the first quarter of fiscal 2023.
“While we’ve made substantial progress on improving our business operations in Q1, we missed our sales goal due largely to continued pullback and consumer spending by our core customers, particularly in high-ticket discretionary items,” Bruce Thorn, Big Lots CEO, told investor analysts during the company’s first quarter earnings conference call. “The consumer environment softened in the first quarter, as both consumer confidence and settlement has declined since January due in part to concerns about inflation, unemployment, and interest rates.”
Company officials expect the second quarter to be better, but not enough to run a second-quarter profit. Sales are expected to improve, but losses to continue this quarter. Thorn said company officials are hoping actions they’ve taken in recent months will result in better financial performance in the third and fourth quarters of 2024. Those steps include to own bargains; to communicate unmistakable value; to increase store relevance; to win customers for life with the company’s omnichannel efforts; and to drive productivity. In short, Big Lots is looking to create bargains to entice shoppers and advertise those values better than they have been.
“We need to continue to elevate our brand relevance to drive more traffic,” Thorn said. “So we are moving quickly to achieve 75% bargain penetration. And within that, substantially grow our extreme bargain penetration to 50% by year-end. Extreme bargains provide significant savings over price leaders and are working as we’ve seen the sales trend shift favorably in several categories, along with a better gross margin outcome. And we’re making it easier for our customers to know we’ve got these deals through better signage, ads and store layout along with more effective digital campaigns that are more relevant and inspiring to customers.”
Thorn said customers continue to pull back on high-ticket discretionary items such as patio furniture and gazebos while lower-cost items such as planters, plant stands, tools and other gardening accessories have sold consistently. Sales of higher-cost items continued to struggle in the second quarter, Thorn said. Furniture and soft home categories struggled in the first quarter, though sales have rebounded some in the second quarter.
The U.S. Commerce Department reported Tuesday that retail sales were unchanged in June from May, after being revised upward to a 0.3% increase in May. Retail sales rose 0.8% in June. U.S. consumer sentiment fell in June for the third straight month as Americans took a dimmer view of their own finances and worried about persistent inflation.
The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, dropped to 65.6 this month from a final reading of 69.1 in May. June’s reading is about 30% higher than the bottom reached in June 2022, when inflation peaked at a four-decade high, but is still below levels typically associated with a healthy economy. Consumers’ outlook has generally been gloomy since the pandemic and particularly after inflation first spiked in 2021, according to the Associated Press.
“I mean when you think about it, inflation is still very high, sentiment is low,” Thorn said. “The credit card balances are high increasing and when you think about it, you look at the headlines out there, people say the economy still growing, people are still spending well. There’s a lot of fixed costs, gas, utilities, rent mortgage payments that are causing that high spend but when you get down into lower income households they’re hurting still and we’re seeing that and you’re probably hearing that as well. …I mean when you think about it, inflation is still very high, sentiment is low.”
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