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Big Lots (BIGGQ)
OTHER OTC:BIGGQ

Big Lots (BIGGQ) AI Stock Analysis

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Big Lots

(OTC:BIGGQ)

Rating:29Underperform
Price Target:
Big Lots' overall stock score is very low due to dire financial performance, negative corporate events including bankruptcy, and poor valuation. Despite some positive technical trends and strategic initiatives, the company's critical challenges overshadow potential improvements.

Big Lots (BIGGQ) vs. SPDR S&P 500 ETF (SPY)

Big Lots Business Overview & Revenue Model

Company DescriptionBig Lots, Inc., through its subsidiaries, operates as a home discount retailer in the United States. The company offers products under various merchandising categories, such as furniture category that includes upholstery, mattresses, home décor, case goods, and ready-to-assemble departments; seasonal category, which comprises patio furniture, gazebos, Christmas trim, lawn and garden, and other holiday departments; soft home category consists of apparel, hosiery, jewelry; frames, fashion and utility bedding, bath, window, decorative textiles, and area rugs departments; and food category that includes beverages and grocery, specialty foods, and candy and snacks departments. It also provides merchandise under the consumables category, which comprises health, beauty and cosmetics, plastics, paper, pet, infant, stationery, and chemical departments; and hard home category, including small appliances, tabletops, food preparation products, home maintenance and organization products, toys, electronics departments, and other offerings. Big Lots, Inc. was founded in 1967 and is headquartered in Columbus, Ohio. On September 9, 2024, Big Lots, Inc., along with its affiliates, filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware.
How the Company Makes MoneyBig Lots generates revenue primarily through the sale of merchandise in its physical retail stores and its online platform. The company's key revenue streams include sales from its primary product categories: furniture, seasonal items, food, consumables, and home goods. By purchasing closeouts, overstocks, and other opportunistic deals from manufacturers and distributors, Big Lots can offer customers significant savings. Additionally, the company may form strategic partnerships with manufacturers and vendors to secure exclusive products and special promotions, further enhancing its value proposition. Big Lots also focuses on optimizing its supply chain and inventory management to maintain cost efficiency and maximize profitability.

Big Lots Earnings Call Summary

Earnings Call Date:Feb 27, 2025
(Q3-2024)
|
% Change Since: 0.00%|
Next Earnings Date:May 23, 2025
Earnings Call Sentiment Positive
The call highlighted several key improvements, including sequential gains in sales metrics, significant cost savings initiatives, and gross margin improvements. However, the company faced challenges with negative comparable sales, seasonal comps decline, and increased competition in food and consumables. The sentiment is slightly leaning towards positive due to strategic initiatives showing progress.
Q3-2024 Updates
Positive Updates
Sequential Improvement in Key Metrics
Delivered on or exceeded beginning of quarter guidance on all key metrics, showing a sequential improvement in comp sales and a significant year-over-year improvement in gross margin rate.
SG&A Cost Savings
On track to achieve over $100 million of SG&A cost savings for the year prior to Project Springboard, with Project Springboard expected to deliver $200 million of bottom-line opportunities.
Increased Bargain Sales Mix
Mix of bargains, including closeout items, opportunistic buys, and sourced products, accounted for nearly 50% of sales in Q3, exceeding the goal of over 1/3 by the end of the year.
Gross Margin Improvement
Gross margins were up by 240 basis points versus last year, driven by lower freight costs and reduced markdown activity.
Furniture Assortment Recovery
Significant improvement in furniture comps Q4 to-date, attributed to better in-stock levels and new Broyhill items.
Negative Updates
Negative Comparable Sales
Comp sales were down 13.2%, in line with guidance of down low teens, reflecting challenges in consumer spending and competitive pressures.
Seasonal Comps Decline
Seasonal comps declined 15% in Q3, impacted by high promotions from the previous year and oversized seasonal buying.
Challenges in Food and Consumables
Food and consumables categories were impacted by fierce competition, which affected traffic-driving categories where there is less product differentiation.
Increased Interest Expense
Interest expense for the quarter was $13.6 million, up from $6.3 million in the third quarter last year due to higher average amounts drawn on the credit facility and higher interest rates.
Company Guidance
In the recent earnings call for Big Lots, the company reported sequential improvements in key metrics, surpassing their initial guidance for the third quarter. They achieved a 240 basis point increase in gross margin year-over-year, driven by reduced markdowns and lower freight costs. The company's efforts to strengthen their balance sheet and manage costs have resulted in a solid net liquidity position of $258 million. Big Lots is on track to achieve over $100 million in SG&A cost savings for the year, with Project Springboard expected to deliver $200 million in bottom-line opportunities, primarily in 2024. Comp sales were down 13.2%, aligning with guidance, while the mix of bargains reached nearly 50% of sales, exceeding their target. The company anticipates further sequential improvements in the fourth quarter, with a forecasted gross margin rate around 38% and a continued decrease in SG&A expenses.

Big Lots Financial Statement Overview

Summary
Big Lots is facing severe financial distress with declining revenues, negative profitability, and inadequate cash flows. The high leverage and negative equity raise significant concerns about its financial viability.
Income Statement
30
Negative
Big Lots' income statement shows declining performance with negative net income and EBIT in recent periods, indicating significant profitability challenges. The revenue growth rate is negative, and both gross and net profit margins have deteriorated compared to previous periods, highlighting declining sales efficiency and cost management issues.
Balance Sheet
20
Very Negative
The balance sheet reveals a concerning financial structure with negative stockholders' equity in the TTM, indicating potential insolvency risks. The debt-to-equity ratio is not meaningful due to negative equity, and the equity ratio has turned negative, suggesting high leverage and weakened financial stability.
Cash Flow
25
Negative
Cash flow analysis highlights a negative free cash flow in the TTM, with declining operating cash flow and growing capital expenditures. The company struggles to generate positive cash flows from its operations, reflecting significant liquidity challenges and unsustainable cash outflows.
Breakdown
Jan 2024Jan 2023Jan 2022Jan 2021Jan 2020
Income StatementTotal Revenue
Gross Profit
1.69B1.91B2.40B2.50B2.11B
EBIT
-387.36M-261.50M239.75M856.55M334.83M
EBITDA
-369.75M-103.71M384.81M994.49M681.76M
Net Income Common Stockholders
-481.88M-210.71M177.78M629.19M242.46M
Balance SheetCash, Cash Equivalents and Short-Term Investments
Total Assets
3.33B3.69B3.93B4.04B3.19B
Total Debt
2.27B2.07B1.82B1.73B1.53B
Net Debt
2.22B2.02B1.76B1.17B1.47B
Total Liabilities
3.04B2.93B2.92B2.76B2.34B
Stockholders Equity
Cash FlowFree Cash Flow
27.61M-253.19M34.12M852.41M264.51M
Operating Cash Flow
-251.96M-144.29M193.76M399.35M338.97M
Investing Cash Flow
Financing Cash Flow

Big Lots Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.02
Price Trends
50DMA
0.02
Negative
100DMA
0.06
Negative
200DMA
0.15
Negative
Market Momentum
MACD
>-0.01
Positive
RSI
46.26
Neutral
STOCH
25.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BIGGQ, the sentiment is Negative. The current price of 0.02 is below the 20-day moving average (MA) of 0.03, below the 50-day MA of 0.02, and below the 200-day MA of 0.15, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 46.26 is Neutral, neither overbought nor oversold. The STOCH value of 25.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BIGGQ.

Big Lots Risk Analysis

Big Lots disclosed 41 risk factors in its most recent earnings report. Big Lots reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Big Lots Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$3.33B23.0712.42%1.12%8.65%17.76%
78
Outperform
$7.32B35.6412.32%8.70%2.54%
BJBJ
74
Outperform
$14.67B25.6032.76%2.84%11.25%
DGDG
69
Neutral
$24.97B21.6415.69%2.08%4.77%-23.73%
62
Neutral
$6.84B11.412.80%3.87%2.70%-24.58%
61
Neutral
$19.72B19.25%-20.46%-202.26%
29
Underperform
$742.35K-620.04%-9.89%19.01%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BIGGQ
Big Lots
0.02
-2.24
-99.12%
DG
Dollar General
113.31
-11.03
-8.87%
DLTR
Dollar Tree
93.85
-15.79
-14.40%
PSMT
Pricesmart
108.35
27.79
34.50%
OLLI
Ollie's Bargain Outlet Holding
115.88
30.68
36.01%
BJ
Bj's Wholesale Club Holdings
110.09
21.63
24.45%

Big Lots Corporate Events

M&A TransactionsLegal ProceedingsBusiness Operations and Strategy
Big Lots Strategic Asset Sale and Brand Continuity
Negative
Dec 27, 2024

Big Lots, Inc. announced a strategic sale with Gordon Brothers Retail Partners to transfer assets, including stores and intellectual property, to other retailers like Variety Wholesalers. Variety Wholesalers plans to acquire between 200 and 400 stores and operate them under the Big Lots brand. This agreement aims to preserve jobs and maintain the Big Lots brand’s continuity, pending bankruptcy court approval. The previous agreement with Nexus Capital Management was terminated, leading Big Lots to commence going out of business sales at remaining stores to protect its estate value.

More about Big Lots

Big Lots, Inc. is one of the largest closeout retailers in the United States, focusing on delivering extreme value to customers with a range of products including furniture, décor, and pantry items. The company emphasizes sourcing through closeouts, liquidations, overstocks, private labels, and value-engineered products and is committed to philanthropy through the Big Lots Foundation.

YTD Price Performance: -99.28%

Average Trading Volume: 490,774

Technical Sentiment Consensus Rating: Buy

Current Market Cap: $1.69M

Legal Proceedings
Big Lots Files for Chapter 11 Bankruptcy
Negative
Dec 11, 2024

Big Lots, Inc. and its subsidiaries have filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Delaware, with joint administration of their cases granted. The company has filed monthly operating reports for September and October, but cautions that these reports are not indicative of future financial results and were prepared solely for bankruptcy court requirements. The company expects common shareholders to face a complete loss on their investments due to the speculative nature of trading during bankruptcy proceedings.

More about Big Lots

YTD Price Performance: -95.88%

Average Trading Volume: 624,975

Technical Sentiment Consensus Rating: Buy

Current Market Cap: $9.53M

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.