Shares of Big Lots Inc. (BIG) plunged 21.2% toward a two-year low in premarket trading Friday, after the home discount retailer swung to a surprise fiscal first-quarter loss and sales that fell more than forecast, as gross margin fell amid challenging changes in consumer demand. The net loss for the quarter to April 30 was $11.1 million, or 39 cents a share, after net income of $94.6 million, or $2.62 a share, in the year-ago period. The FactSet consensus was earnings per share of 95 cents. Sales fell 15.4% to $1.37 billion, below the FactSet consensus of $1.46 billion, while same-stores dropped 17.0% to miss expectations for an 11.4% decline. Gross margin contracted to 36.7% from 40.2% as selling and administrative expenses declined just 3.3%. For the fiscal second quarter, the company expects same-store sales to decline in the single-to-high single digit percentage range, compared with the FactSet consensus for a 1.5% decline. "We expect the environment to remain challenging and we remain highly focused on managing the business prudently, which includes aggressively right-sizing our inventories over the course of Q2," said Chief Executive Bruce Thorn. "We are focused on opening price points that drive traffic and improving gross margin rates through capitalizing on significant close-out opportunities, more targeted pricing and promotions, minimizing supply chain charges, and reducing shrink." The stock has already tumbled 32.0% year to date through Thursday, while the S&P 500 has lost 14.9%.
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