The two major U.S. retail giants, Big Lots and Conn's, experienced a slump in their second-quarter results and suffered serious losses!

In the second quarter ended July 30, Big Lots posted a net loss of $84.2 million, or $2.91 per share. The result included an after-tax charge of $18.1 million related to impairment of store assets. Excluding this charge, the adjusted net loss was $66 million, or $2.28 per share. The net profit for the same period in 2021 was $37.7 million, or $1.09 per diluted share.

Net sales for the second quarter were $1.35 billion, down 7.6% from $1.46 billion in the year-ago quarter and up 7.5% from the same period in 2019. Company executives pointed out that the main reason for the decline in sales compared to last year was a 9.2% drop in comparable sales. Three-year comparable sales growth was 3.6% in the second quarter, up slightly from 1.9% in the first quarter.
Bruce Thorn, president and CEO of Big Lots, noted that the numbers were in line with expected financial guidance and that Big Lots will continue to work hard to increase product value.
He said: "I would like to thank my colleagues in the company for defying the challenges in the second quarter and continuing to provide customers with a high-quality shopping experience, again achieving a top-tier Net Promoter Score of over 80%. Thanks to the excellent work of the team, we are as expected. quarterly financial guidance. We tightly controlled our costs, made great progress in repositioning our product categories towards lower price points, and took important steps to improve our balance sheet and secure funding Liquidity. We also reduced our inventory significantly compared to the first quarter, which puts us on track to rationalize the size of our inventory by the fourth quarter. Going forward, we will continue to focus on providing customers with products with excellent value, and we will Continue to manage the business prudently as we work to grow the company stronger and deliver on our commitments to our customers, partners and shareholders."
By reducing inventory appropriately, Big lot will bring more transactions to customers, says Bruce Thorne. Many clients are currently strained by inflation and are starting to reduce trading volumes.
For the third-quarter results, Big Lots expects that as the third-quarter promotional activities continue, the decline rate from the same period last year is expected to fall into the low double-digit range, resulting in a quarterly gross profit margin of about 35%. Selling and administrative expenses will grow in the low single digits compared to 2021. Given the broad and uncertain nature of the results, Big Lots is not currently providing EPS guidance.
Another retail giant, Conn's, saw a steeper decline, with second-quarter net income of just $2.1 million, or 9 cents per diluted share, down from $37 million, or $1.22 per share, a year earlier. 94.2%! Net sales for the quarter were down 19.4%, finance charges and other income were down 6.3%, same-store sales were down 22.0%, and total revenue was down 17.1% to $346.6 million. Conversely, e-commerce sales rose 11.5% to $19.3 million, the best second quarter on record.

Conn's second quarter results
Chandra Holt, CEO of Conn's, said: "The challenging macroeconomic situation continued to weigh on our consumer spending in the second quarter, which disproportionately impacted our financial channel customers and non-profits. Year-over-year sales in essential product categories. While we remain cautious about the performance profile for the remainder of the fiscal year, the continued deterioration in the retail environment has prompted us to accelerate the pace of reducing operating costs, while also reducing capital expenditures and maintaining conservative credit underwriting.
Chandra Holt noted that there were still some bright spots in the quarter's business performance, including the implementation of key projects. She said: [In July, we successfully completed our latest securitization transaction and ended the second quarter with more than $211 million in liquidity and cash. This provides us with the financial flexibility to support our Current business needs, future long-term growth and transformation of the company. We also completed the first phase of our e-commerce platform migration, launched a pilot at Belk Inc. and expanded with the introduction of a new installment plan in our retail stores Payment options. We continue to pursue new go-to-market strategies and partnerships that leverage our industry-leading cargo delivery capabilities. We believe the company is doing the right thing today to successfully navigate a difficult retail environment while continuing to pursue long-term growth opportunity, which we believe will continue to deliver value to our shareholders and customers."

In response to challenging economic conditions, Conn's detailed three priorities for its near-term strategy:
1. Reduce operating costs, saving $12 million to $16 million in the second half of the year;
2. Reduce capital expenditures by delaying or canceling several investments, including opening new stores and expanding distribution centers;
3. Continue to practice conservative credit underwriting and maintain a good reputation in receiving credit.