What happened

Shares of Big Lots (BIG 2.65%) plunged 33.6% in December, according to data from S&P Global Market Intelligence, as the broader market fell and the discount retail chain announced disappointing third-quarter results.

On the former, note the S&P 500 dropped 9% last month largely on concern over political uncertainty and slowing global growth. But Big Lots stock also crashed more than 20% on Dec. 7 alone in the wake of its painful quarterly report.

Stock market chart in black and white with a yellow arrow indicating losses

Image source: Getty Images.

So what

Big Lots' third-quarter revenue climbed 3.6% year over year to $1.149 billion, as a 3.4% increase in comparable-store sales and a favorable calendar shift more than offset the impact of its lower store count versus the year-ago period. On the bottom line, that translated to a net loss of $6.6 million, or $0.16 per share, well below Big Lots' own guidance for net income ranging from a $0.04 per-share profit to a $0.06 loss.

"[W]e were pleased to achieve our second consecutive quarter of positive comps, but our bottom-line results fell short of our expectations," said CEO Bruce Thorn. "While we expect near-term results to be challenging this holiday season, we have a strong brand, great people, and we are working swiftly to enhance our current strategy, identify new growth opportunities, and position our business for profitable expansion well into the future."

Now what

More specifically for the holiday quarter, Big Lots told investors to expect comps to be anywhere from flat to up 2%. That should mean net income per share in the range of $2.20 to $2.40 -- marking a significant reduction from its previous Q4 earnings guidance of $2.90 to $3 per share.

As such, while Big Lots was able to reaffirm its full fiscal-year 2018 outlook for comps growth of 1%, it simultaneously reduced its full-year earnings outlook to a per-share range of $3.55 to $3.75 (down from $4.40 to $4.55 before). 

That's not to say Big Lots can't turn things around, as management suggests. But our market hates being told to hurry up and wait. And given the company's quarterly earnings miss and lowered outlook, it was hard to blame investors for bidding down the stock last month.

Check out the latest Big Lots earnings call transcript.