A different cheap shop has revealed that it lost money in 2022, 2023, and the first quarter of 2024, putting it at a significant risk of failing.
Big Lots is a bargain shop with more than 1,300 locations nationwide that employs a treasure-hunt concept and constantly rotating inventory.
The company recently filed with the Securities and Exchange Commission, revealing that it experienced losses in the first quarter of 2024, 2023, and 2022.
Although the company had not broken any credit agreements at the time of the filing, it made it clear that things could soon change.
The business predicted “difficulty remaining in compliance with such covenants” and “further operating losses.”
Image – The Sun
Big Lots has improved its cash flow over the past year by reducing costs, selling some of its real estate, and taking other actions.
The SEC filing suggests that their efforts might not be sufficient.
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Big Lots stated, “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.”
This conclusion was made based on the company’s current cash and liquidity projections as well as uncertainties regarding the mitigating effect of management’s plans.
According to TheStreet, if the company doesn’t make payments on its loans, it might be forced to file for Chapter 11 or possibly Chapter 7 bankruptcy.
Rapid Ratings tracks a company’s default risk using data that is readily available to the public.
Businesses evaluate which terms to operate under and/or whether to do business with a company based on the reports provided by the service.
“We have serious worries. Start reducing the danger.
The weakest companies are those that usually have low earnings and fragile balance sheets, which increases the danger of short-term default and reduces the likelihood of medium-term sustainability, according to Rapid Ratings.
“Big Lots Inc. exhibits acceptable leverage but difficulty in earnings performance and liquidity.
It is essential to make significant progress in one or more of these categories, according to Rapid Ratings.
