Mill Road's Big Lots call faces bumps
Big Lots’ share plunge this morning is likely to throw a wrench in activist Mill Road’s plans for the company.
Why it matters: The economic winds aren’t looking so good for the retailer, signaling the value of the discount chain may remain depressed for some time.
Flashback: In March, Mill Road urged a sale of the discount home furnishing retailer, claiming the company could fetch $55 to $70 apiece for its shares.
- The day before Mill Road’s filing, Big Lots’ shares were trading at $31.99. Today, shares opened down 14% but recovered to trade near $28.
What’s happening: Big Lots today reported a surprise loss and weaker-than-expected sales in its first quarter.
- The company said it was grappling with higher costs and margin pressure and it has started offering more markdowns to lure customers.
The bottom line: The pinch of higher gas prices and inflation is more acutely felt by the discount chain’s budget-conscious consumers, and that’s not likely to abate anytime soon.