What Happened:

Shares of discount retail company Big Lots (NYSE:BIG) jumped 5.89% in the pre-market session after the company reported impressive second quarter results on the back of weak peer earnings and likely low expectations. Same-store sales, revenue, and EPS (when excluding a number of one-time charges) all beat Wall Street analysts' expectations. 

Additionally, forward commentary was encouraging. Management stated that "we are now in a position to get back to playing offense. This will be supported by the incredible efforts of our associates, and our outstanding vendor partners, who remain aligned with our efforts to offer great quality products and amazing value. As we make further progress on our five key actions, we are optimistic that trends will continue to improve, albeit slowly, through the remainder of this year, aided by a higher penetration of bargains, more newness in our assortment, freight reductions, ongoing cost reduction and productivity efforts, more effective promotions, and a more normalized level of markdowns." 

Lastly, Big Lots recently executed on sale leaseback transactions that have resulted in $300 million of proceeds, which is strengthening its liquidity position. Overall, it was a strong quarter for the company.

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What is the market telling us:

Big Lots's shares are quite volatile and over the last year have had 72 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Big Lots is down 47.9% since the beginning of the year, and at $7.80 per share it is trading 67.6% below its 52-week high of $24.08 from August 2022. Investors who bought $1,000 worth of Big Lots's shares 5 years ago would now be looking at an investment worth $157.89.

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