Big Lots Execs Warn of ‘Doubt About the Company’s Ability to Continue’

Popular discount store Big Lots has alerted financial regulators in a recent filing that the company’s staggering losses over the last two years have raised “substantial doubt about the company’s ability to continue.”

The Ohio-based homeware retailer with around 1,400 locations nationwide reported a dramatic $132 million loss in the first three months of 2024 after trending downwards since 2022, the Daily Mail reported. 

Recent quarterly filings submitted to the U.S. Securities and Exchange Commission (SEC) revealed that the financial setbacks forced Big Lots executives to eat through their spare cash, which was meant to cover the cost of stock. 

Big Lots told the federal regulators: 

Based on our current cash and liquidity projections, and uncertainties with respect to the mitigating effect of management’s plans, the Company has concluded there is a significant likelihood that it will be unable to comply with the Excess Availability Covenant under the 2022 Credit Agreement and the Term Loan Facility within the next 12 months, which raises substantial doubt about the Company’s ability to continue as a going concern.

“Failure to comply with the Excess Availability Covenant would result in an event of default which could result in an acceleration of our obligations under the Term Loan Facility and the 2022 Credit Agreement,” company officials continued. “We can provide no assurance that the lender parties under the Term Loan Facility or the 2022 Credit Agreement would waive the Company’s failure to comply with the Excess Availability Covenant.”

Big Lots store managers “say they are not surprised,” the Daily Mail reported. They claim the company sends them massive amounts of products — but not the ones customers want. 

While the company’s stock price peaked at  $72.31 in 2021, it was down to just $1.71 on Wednesday ahead of the market closing for Independence Day. The stock has reportedly dropped by 48 percent over the past month, and 81 percent this year. 

Big Lots’ floundering comes as other well-known discount stores suffer financial hardship, including Dollar Tree, Family Dollar, and 99 Cents Only stores — which announced the closure of all 371 locations in April.