Big Lots, Inc. (NYSE:BIG) shares plunged more than 14% on Wednesday despite the company’s reported Q2 results, with EPS of ($2.28) coming in better than the Street estimate of ($2.38). Revenue was $1.35 billion, compared to the Street estimate of $1.35 billion.
While the company made good progress clearing excess inventory, seasonal still has ways to go, which combines with weaker Q3 guidance with comps running down low-double-digits.
According to the analysts at Deutsche Bank, they have concerns around the company’s Q4 outlook which assume flat gross margins year-over-year on more normalized promotions, which follows months of heavy clearing with consumers increasingly looking for deep discounts.