Executive Summary

Q2 FY2024 net sales were $1.047B, down 8.1% year over year from $1.139B, with a net loss of approximately $238.5M and diluted EPS of -$8.04 .
Management said Q2 performance (underlying comps, gross margin, OpEx) was in line with prior guidance, and that early Q3 trends showed sequential comp improvement and gross margin expansion versus last year .
Liquidity actions intensified: credit amendments raised permitted store closures to 315 and cut ABL commitments to $800M (from $900M) ; the company initiated Chapter 11 and signed a stalking-horse sale agreement with Nexus, securing $707.5M DIP financing .
Earnings release was postponed from Sep 6 to Sep 12, 2024, adding uncertainty around the cadence of disclosures and investor communication .

What Went Well and What Went Wrong

What Went Well

Management indicated “underlying comp sales improved sequentially relative to Q1” and “gross margins significantly improved,” citing progress on “extreme bargain” offerings and operational initiatives; Q3-to-date trends showed further sequential comp improvement and gross margin expansion versus last year .
Cost discipline: earlier guidance called for Q2 SG&A dollars to be down low-to-mid single digits year over year, aligning with a reduced operating cost trajectory outlined on the Q1 call .
Access to liquidity: approval for $707.5M of DIP financing to support operations during the court-supervised sale process, stabilizing near-term funding needs .

What Went Wrong

Top line contraction persisted: Q2 net sales fell 8.1% y/y to $1.047B from $1.139B, reflecting ongoing demand pressure in home and seasonal categories and constrained discretionary spending among core customers .
Losses deepened: Q2 net loss of ~$238.5M (diluted EPS -$8.04) vs. prior year’s smaller loss (prior-year EPS referenced externally at -$3.24), driven by soft sales and continued operating deleverage .
Solvency overhang escalated: 8‑K amendments cut ABL capacity to $800M and allowed up to 315 store closures, culminating in a Chapter 11 filing and planned sale—highlighting ongoing liquidity strain and structural footprint challenges .

Financial Results

Metric	Q2 2023	Q1 2024	Q2 2024
Net Sales ($USD Billions)	$1.139	$1.010	$1.047
Net Loss ($USD Millions)	N/A	$(206.1)	$(238.5)
Diluted EPS ($)	-$3.24	-$6.99	-$8.04

Notes:

Q1 2024 refers to 13 weeks ended May 4, 2024 (company 10‑Q).
Q2 2024 refers to 13 weeks ended August 3, 2024 (company 10‑Q).

Estimates comparison (consensus via S&P Global): unavailable via our feed at this time (tool mapping absent). External press suggested revenue estimates near ~$1.04B and EPS around -$3.30 to -$3.73, indicating a significant EPS miss relative to those non‑SPGI sources .

KPIs/Segments: The company does not report operating segments, but category performance commentary (home/seasonal softness) appears in filings and management discussion .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Comparable Sales	Q2 2024	Mid-to-high single-digit decline (sequential improvement vs Q1)	“Underlying comp sales improved sequentially vs Q1”; Q3-to-date showed significant sequential improvement vs Q2	In line
Gross Margin Rate	Q2 2024	≥ +300 bps YoY improvement	“Gross margins significantly improved” in Q2; Q3-to-date showing YoY expansion	In line
SG&A Dollars	Q2 2024	Down low-to-mid single digits YoY	Noted “underlying operating expenses in line with our guidance”	In line
Share Count	Q2 2024	~29.3M shares	29,694,012 shares outstanding as of Sep 6, 2024 (10‑Q)	Maintained
Liquidity/Store Closures	2H 2024	Credit facilities in place; store closure program ongoing	ABL reduced to $800M; permitted store closures increased to 315	Tightened liquidity; accelerated footprint rationalization

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2023 & Q1 2024)	Current Period (Q2 2024)	Trend
Gross Margin Recovery	Q1: Expect ≥300 bps YoY improvement in Q2; Q1 achieved +190 bps y/y, targeting further gains via “Project Springboard” and fewer markdowns	“Gross margins significantly improved”; Q3-to-date showing expansion vs last year	Improving
Traffic/Comps	Q1: Guided sequential comp improvement into mid-to-high single-digit decline for Q2	Underlying comps improved sequentially vs Q1; Q3-to-date comps improved sequentially vs Q2	Improving sequentially but still negative
“Extreme Bargains”/Closeouts	Q1: Repositioning to increase closeout penetration, improve value perception	CEO highlights increased extreme bargains as a driver of margin improvement	Execution progressing
Liquidity & Store Closures	Q1: Tight liquidity; cost takeout; early steps on closures	ABL cut to $800M; permitted closures raised to 315; Chapter 11 filing and stalking-horse sale to Nexus with $707.5M DIP	Liquidity actions intensified
Regulatory/Legal	—	Deferred Q2 release; Chapter 11 filed in Delaware, DIP approved; pending sale process	Legal process dominates near-term narrative

Management Commentary

“Despite a challenging consumer environment and financial pressures facing our business, we are pleased to have achieved underlying comp sales, gross margin, and operating expenses in line with our guidance. Underlying comp sales improved sequentially relative to Q1 on a year-over-year basis and gross margins significantly improved, driven in part by advancing our five key actions, particularly through increasing our extreme bargain offerings. Additionally, Q3 to date is off to a good start, with a significant sequential improvement in underlying comp sales relative to Q2, as well as underlying gross margin expansion versus last year.” — CEO Bruce Thorn (Sept 9, 2024) .
On strategic/transaction process: The company entered a sale agreement with a Nexus affiliate and initiated Chapter 11 to facilitate restructuring and ownership transition; secured $707.5M financing to support operations .

Q&A Highlights

The company postponed its Q2 earnings release and did not provide a typical earnings call transcript accessible through our sources; communications centered on the sale agreement and Chapter 11 process (press releases) .
Guidance clarifications were limited to press statements indicating Q2 was in line with guidance and early Q3 trends were favorable on comps and gross margin .

Estimates Context

S&P Global consensus estimates were unavailable via our tool for this period; as a result, we cannot present SPGI-based consensus or surprises (Values retrieved from S&P Global).*
External sources (non‑SPGI) suggested Q2 revenue consensus near ~$1.04B and EPS consensus between -$3.30 and -$3.73, implying that the reported EPS (-$8.04) constituted a significant miss versus those third‑party figures .

Key Takeaways for Investors

Liquidity and restructuring overshadow operations: Reduced ABL capacity, expanded store closure allowance (up to 315), and Chapter 11 with DIP financing materially change the risk/reward and near-term equity optionality .
Sales pressure persists: Q2 sales -8.1% y/y as home/seasonal demand remains soft; sequential comp improvement noted but levels remain negative .
Margins improving on mix and markdown discipline: Management cited significant Q2 gross margin improvement and further gains in early Q3 tied to “extreme bargains” and cost initiatives .
Large EPS miss vs non‑SPGI expectations and widening losses underscore urgency of footprint and cost resets; expect continued OpEx and inventory discipline .
Near-term trading likely driven by court milestones and sale outcome rather than fundamentals; monitor DIP usage, store rationalization cadence, and any alternative bids in the sale process .
Prior retention awards highlight leadership continuity focus amid transition, but also raise governance and cash allocation scrutiny .
Stock reaction catalysts: court approvals, updates on store closures, any changes in bidding dynamics, and confirmation of sequential comp and margin trajectories through peak seasonal periods .

Sources reviewed

Q2 FY2024 Form 10‑Q (quarter ended Aug 3, 2024) .
Press releases: postponement of Q2 release (Sep 6, 2024) ; sale agreement & Chapter 11 (Sep 9, 2024) .
Credit agreement amendments (Aug 2, 2024 8‑K): ABL reduced to $800M; closures up to 315 .
Retention awards (Aug 16, 2024 8‑K) .
Q1 FY2024 10‑Q (quarter ended May 4, 2024) for prior-quarter baseline .
External estimate context and reported EPS (non‑SPGI) .

* S&P Global consensus data was unavailable through our tool for this ticker at the time of analysis; accordingly, SPGI-based estimate comparisons are not shown. Values retrieved from S&P Global.

BIG LOTS INC (BIG)·Q2 2024 Earnings Summary