Big Lots reports record Q2 results as COVID-19 fuels demand

Written by: Wajeeh Khan
August 28, 2020
  • Big Lots reports record Q2 results as COVID-19 fuels demand.
  • The American retail company reported £338.62 million of net income.
  • Big Lots has £32.21 million of debt and £673.50 million of cash.

Big Lots Inc. (NYSE: BIG) published its quarterly financial results on Friday that came in stronger than what the analysts had anticipated. The company attributed its hawkish performance to the economic blow from COVID-19 that fuelled demand for discount retailers in recent months. Big Lots announced nationwide same-day delivery in July.

Shares of the company closed more than 5% down on Friday. On a year to date basis, Big Lots is still 80% up in the stock market. In comparison, its performance was slightly down in 2019 with an annual decline of roughly 8%. At the time of writing, Big Lots has a market cap of £1.47 billion and a price to earnings ratio of 7.08.

Big Lots’ Q2 financial results versus analysts estimates

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In the three months that concluded in June, Big Lots generated a total of £1.23 billion in sales that came in 31% higher as compared to the same quarter last year. According to Refinitiv, experts had forecast the company to print £1.21 billion of sales in the fiscal second quarter.

The American retail company reported £338.62 million of net income in Q2, including a tax benefit (non-recurring) of £256.14 million. Excluding the tax benefit, Big Lots earned £2.06 per share in the recent quarter that topped the Wall Street estimate of £2.02 per share.

CEO Bruce Thorn of Big Lots commented on the earnings report on Friday and said:

“I am delighted with our record-breaking results. Adjusted earnings per share was the most we’ve reported in a second quarter, and more than five times what we reported a year ago.”

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Big Lots has £32.21 million of debt and £673.50 million of cash

Comparable sales, as per the retailer, were 31% higher in the second quarter on the back of contribution from both its e-commerce segment and traditional stores. At £534.90 million, the company said its inventory saw an 18% year over year decline in Q2.

As of the end of the second quarter, Big Lots had £32.21 million of debt on its balance sheet and £673.50 million of cash. In the comparable quarter of 2019, it had £350.61 million of debt and £40.45 million in cash.

The Columbus-based firm said it will update its future guidance in September. Big Lots introduced a new share buyback plan on Friday that is valued at £374.58 million. Its U.S. peer, Dollar Tree, said on Thursday that its net income climbed to £198.39 million in the fiscal second quarter.