Big Lots stock jumps on narrower-than-expected loss

Shares of discount retailer Big Lots (BIG) are rising sharply in early trading after reporting a smaller loss than analysts were expecting. The retailer's second-quarter revenue came in above expectations at $1.4 billion. In the release, CEO Bruce Thorn said the results show that the company is still facing a "challenging environment in which our core lower-income customer remains under significant pressure.” Yahoo Finance Live breaks down the numbers for Big Lots.

Video Transcript

- We also got to talk about Big Lots. Shares of discount retailer Big Lots rocketing after a narrower-than-expected loss of $3.24 per share, revenue landing ahead of expectations at $1.14 billion. Despite this, the company's CEO says the results illustrate a challenging environment in which the core, lower-income customer, remains under significant pressure.

This is exactly what we were talking about earlier on the show with Caleb Silver about the lower-income customer being under pressure, looking for more discounts. But for Big Lots shares moving higher as we saw here today by about 23% and really kind of driving that three-month chart as of right now, too.

- And it's interesting because, I mean, going into earnings season, expectations were already low. So when you have these better losses than feared narratives still coming, it doesn't give you a lot of confidence.

And then even when we talked about-- when we've been talking about Big Lots, a lot of people aren't always 100% choice. They're not top of mind when it comes to your go-to retailer when you have the convenience of an Amazon for your purchases and other places. So it'll be interesting to see how they carve out more market share as we continue to see different consumers trending.

And obviously, we have back-to-school shopping and things like that and holiday shopping coming up, people looking for the big discounts. I mean, I was looking online. They have massive discounts right now at Big Lots. But it all depends on whether it's top of mind for consumers and then how that ends up affecting the margins as well.

- You know, I'm just looking through the quote from Bruce Thorn, President and CEO, on the back of this earnings results, saying the consumer environment will likely remain challenging and result in negative comp sales in the back half of the year. But they're now in position to get back to playing offense.

Of course, liquidity-- that comes into focus, too. He did have a comment on that, saying that they're actually very comfortable with their liquidity position coming into the second half of the year, strengthening their balance sheet. But you've got to wonder, for the consumer pressures that are continuing, what more the management team will have to do in terms of inventory management, also in just how they're engaging with the consumer.

But again, I mean, coming off of these results, I got to wonder what investors are really leaning into here. But a category mix that anybody who's walked into a Big Lot store, they can get anything from some snacks and candies all the way to a piece of discount furniture. So we'll see exactly where and which aisles they gravitate towards.