By Senad Karaahmetovic

After the release of a disappointing Q1 report, shares in Big Lots (NYSE) fell more than 14% Friday morning.

Retailer $1.37 Billion in Q1 Net Sales, down 15% YoY. This is below the analyst consensus estimate of $1.46 Billion. The retailer suffered a Q1 loss of 39c per share, as compared to an EPS that was $2.62 during the same time last year.

In the third quarter inventory stood at $1.34 Billion, which was 49% higher YoY than expected and $996.1 Million above. Gross margin was 36.7% in this quarter, down from 40.2% the previous year and lower than the consensus forecast of 39.4%.

Big Lots expressed optimism about the company’s potential to provide value over time and said that they will keep trying to lower costs.

“We have reacted quickly to the changes in consumer demand by increasing value offerings to our customers, resulting in a significant acceleration to three-year comparable sales growth in the mid-teens in May,” said CEO Bruce K. Thorn.

“As a result, we missed our sales plan by approximately $100 million, the vast majority in April, while supply chain impacts across gross margin and SG&A continued to be significant headwinds.”

Thorn pointed out that there was a substantial slowdown in sales growth at Thorn’s company in April.

Bradley Thomas, KeyBanc Analyst, stated that BIG produced weak results as many had feared going into print.

“Results align with weakness seen in our Key First Look Data, where we warned BIG 1Q results could have downside risk. Looking ahead, BIG forecasts a y/y decline of MSD-HSD in comps for 2Q on higher promotional activity resulting in significant gross margin headwind, as well as continued SG&A increase due to supply chain challenges,” Thomas told clients.

Joseph Feldman, a Telsey Advisory Group analyst, took note of a Q1 missed and lowered outlook during April’s deceleration.

“It appears that COVID-19 helped the company over-earn in the past two years, with the reset underway. Big Lots has a lot of initiatives to improve the business, but we wait to see results,” Feldman told clients in a note.