COLUMBUS, Ohio — While it continued showing losses in the second quarter of FY2024, Top 100 retailer Big Lots’ performance was better than its showing the year prior, marking its second consecutive quarter of shrinking losses.
The Columbus, Ohio-based discounter, which filed for Chapter 11 protection on Sept. 9, released its earnings for the three months ended Aug. 3 in a 10-Q filing with the Securities & Exchange Commission on Sept. 12.
For the quarter, its net sales totaled $1.047 billion, down 8.15% compared to $1.139 billion over the same three-month span in 2023. Its net loss was $238.5 million, or $8.04 per diluted share, a 4.56% increase compared to a net loss of $249.8 million, or $8.56 per diluted share in 2023.
Through its first two quarters of 2024, Big Lots’ net sales were $2.056 billion, down 9.2% versus $2.263 billion across the first six months of 2023. Its net loss of $443.5 million, or $15.04 per diluted share, over the first two quarters represented a 2.72% gain when stacked up against a net loss of $455.9 million, or $15.67 per diluted share through two quarters in 2023.
On Sept. 10, the New York Stock Exchange filing with the SEC revealed that it would delist Big Lots’ stock at the start of business on Sept. 23, and it was suspending trading of the stock in the interim.
In its Sept. 12 SEC filing, Big Lots cautioned that while it is in Chapter 11 protection and has a sale agreement in place with Nexus Capital Management, it’s got a long way to go to emerge, and there are still obstacles.
“We may not receive the requisite acceptances of constituencies in the Chapter 11 proceedings to confirm our plan. Even if the requisite acceptances of our plan are received, the Bankruptcy Court may not confirm such a plan. The precise requirements and evidentiary showing for confirming a plan, notwithstanding its rejection by one or more impaired classes of claims or equity interests, depends upon a number of factors including, without limitation, the status and seniority of the claims or equity interests in the rejecting class (i.e., secured claims or unsecured claims or subordinated or senior claims),” the company wrote. “If a Chapter 11 plan of reorganization is not confirmed by the Bankruptcy Court, it is unclear whether we would be able to reorganize our business and what, if anything, holders of claims against us would ultimately receive with respect to their claims.
“There can be no assurance as to whether we will successfully reorganize and emerge from the Chapter 11 proceedings or, if we do successfully reorganize, as to when we would emerge from the Chapter 11 proceedings. If we are unable to successfully reorganize, we may not be able to continue our operations.”
Tim Stump, president of M&A advisory firm Stump & Co. said this sort of language is typical for companies in bankruptcy, primarily due to having to secure financing to operate post-filing. At the time it filed, Big Lots announced it had secured commitments for $707.5 million in financing, including $35 million in new financing from certain of its current lenders, in the form of a post-petition credit facility. Upon Court approval, the DIP Financing Facility, coupled with cash generated from the company’s ongoing operations, are expected to provide sufficient liquidity to support the company while it works to complete the sale transaction.
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