In the past year, some huge names in retail have succumbed to financial struggles. Giant national brands like Bed, Bath & Beyond, Christmas Tree Shops, and Tuesday Morning each needed to declare bankruptcy and close all of their locations. Now, another big retailer is facing the potential of a similar fate. National discount chain Big Lots has been facing financial challenges lately due to sluggish sales, and in their recent earnings call, the company faced the hard facts.
In the call, CEO Bruce Thorn called out that his company lost money for yet another quarter, losing $132.3 million in Q1 of 2024, which is nearly $100 million more than they lost in Q1 of 2023. He explained what happened, saying, "While we made substantial progress on improving our business operations in Q1, we missed our sales goals due largely to a continued pullback in consumer spending by our core customers, particularly in high ticket discretionary items."
While Thorn remained positive on the call, focusing on "aggressive actions to drive positive comp sales growth in the latter part of the year and into 2025," when the company filed their finances with the SEC, they acknowledged their losses in 2022, 2023 and this year, and noted that while they are still in compliance with their credit agreements, they expect "to experience further operating losses" and "difficulty remaining in compliance." They added that there is "a significant likelihood" that in the next 12 months, they "will be unable to comply with the Excess Availability Covenant" of their loan, which "raises substation doubt about the company's ability to continue."
To prevent that from happening, they are considering selling off some of their real estate or making lease concessions, which could mean some of the company's 1,392 stores might need to close. If they go that route, as yet, they have not revealed which locations would be affected.