Is Big Lots in Big Trouble?

By the middle of 2023, previous market darling and star performer Big Lots suddenly found itself facing possible bankruptcy. CEO Bruce Thorn needed a vision for Big Lots that would establish near-term financial viability and also inspire confidence in the business’s long-term prospects. While the sudden decline could be attributed to short-term factors, notably inflation-driven fears curtailing demand and temporary supply chain disruptions, the viability of the Big Lots business model was also in doubt. The case provides information sufficient to build a two-year forecast and to benchmark that forecast performance against peers. Classroom discussions will focus on the technical aspects of forecasting, the selection and meaning of leverage metrics, and how business decisions manifest in financial statements. At the University of Virginia Darden School of Business, this case is used in the first-year finance curriculum in a module focused on optimal capital structure. It would also be suitable in courses that introduce or explore financial forecasting.