Big Lots stock sinks toward 7-month low after profit and sales miss, surprise loss outlook for current quarter

Shares of Big Lots Inc.

sank 6.0% toward a 7-month low in premarket trading Friday, after the discount retailer reported fiscal second-quarter profit and sales that missed expectations, and provided a surprise loss outlook for the current quarter, as supply chain and freight headwinds are expected to continue to weigh on gross margins. Net income for the quarter to July 31 was $37.7 million, or $1.09 a share, after income of $452.0 million, or $11.29 a share, in the year-ago period, which included a $341.9 million after-tax benefit. The FactSet consensus for earnings per share was $1.12. Net sales fell 11.4% to $1.46 billion, just shy off of the FactSet consensus of $1.48 billion, while the same-store sales decline of 13.2% missed expectations of an 11.4% decrease. “Our results for the quarter were tempered by continued supply chain and freight headwinds, as well as other inflationary pressures,” said Chief Executive Bruce Thorn. Looking ahead, the company expects a third-quarter per-share loss of 10 cents to 20 cents, compared with the FactSet consensus for EPS of 5 cents, and expects full-year EPS of $5.90 to $6.05, which is below expectations of $6.66. The stock, which is on track to open at the lowest price seen since Jan. 26, has dropped 15.9% over the past three months through Thursday, while the SPDR S&P Retail ETF

has edged up 0.9% and the S&P 500

has gained 6.4%.