Retailer Big Lots performed better than it did the year before, despite continuing to record losses in the second quarter of FY2024. This was the company’s second consecutive quarter of declining losses.
The discounter, which on September 9 filed for Chapter 11 protection, disclosed its third-quarter earnings in a 10-Q filing with the Securities & Exchange Commission on September 12.
Its net sales for the quarter came to $1.047 billion, which was 8.15 percent less than what it made in the same three months of 2023 ($1.139 billion). Its net loss increased by 4.56% to $238.5 million, or $8.04 per diluted share, from $249.8 million, or $8.56 per diluted share, in 2023.
Big Lots’ net sales through the first two quarters of 2024 were $2.056 billion, a 9.2% decrease from $2.263 billion through the first half of 2023. Comparing its first two quarters’ net loss of $443.5 million, or $15.04 per diluted share, to its net loss of $455.9 million, or $15.67 per diluted share, through two quarters of 2023, showed a 2.72% rise.
The New York Stock Exchange said on September 10 that it was suspending trading of Big Lots’ stock in the interim and will delist the company’s shares at the opening of business on September 23 in a filing with the SEC.
Big Lots issued a warning in its SEC filing on September 12th, stating that even though it is under Chapter 11 protection and has a selling agreement with Nexus Capital Management, there are still challenges to overcome before it can fully emerge.
It is possible that we won’t obtain the necessary consents from the parties involved in the Chapter 11 procedures to validate our proposal. The Bankruptcy Court might not approve our proposal, even if we acquire all necessary approvals. The company stated that a variety of factors, such as 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), will determine the exact requirements and evidentiary showing for confirming a plan, even in the event that one or more impaired classes of claims or equity interests reject it. “If the Bankruptcy Court does not confirm a Chapter 11 plan of reorganization,It’s uncertain if we would be able to restructure our company and what, if anything, would end up going to the people who have claims against us.
“There is no guarantee that we will be able to effectively reorganize and leave the Chapter 11 processes, or even if we do, there is no guarantee as to when we will do so. We might not be able to carry on with our business if we are unable to effectively reorganize.
This kind of wording is common for companies in bankruptcy, according to Tim Stump, head of M&A consultancy company Stump & Co., mostly because they need to get funding to continue operating after filing. At the time it filed, Big Lots claimed it had received pledges for $707.5 million in funding, including $35 million in new financing from several of its present lenders, in the form of a post-petition credit facility. It is anticipated that the DIP Financing Facility, when approved by the court, together with the cash generated by the business’s continuing operations will offer the company enough liquidity to support it as it works to close the selling transaction.
