Big Lots Q1 Profit Plunges, Lifts FY14 Earnings View

(RTTNews) - Broadline closeout retailer Big Lots, Inc. (BIG) Friday reported a sharp fall in first-quarter profit, amid marginal increase in sales and wider loss from discontinued operations. Comparable stores sales edged up 0.9 percent.

The company also lifted its outlook for earnings per share from continuing operations for fiscal 2014.

For the 13-week period ended May 3, 2014, Big Lots posted net income of $3.35 million or $0.06 per share, significantly down from $32.33 million or $0.56 per share in the previous year.

For the recent quarter, earnings from continuing operations totaled $0.50 per share, compared to $0.64 per share a year ago.

Adjusted earnings for the year-ago quarter were $0.61 per share, and adjusted earnings from continuing U.S. operations were $0.70 per share. The company has recast its prior-year results.

On average, 15 analysts polled by Thomson Reuters expected earnings per share of $0.44 for the quarter. Analysts' estimates typically exclude one-time items.

Net loss from discontinued Canadian operations for the recent quarter $25.2 million or $0.44 per share, compared to the firm's guidance of a net loss of $37 to $41 million, or $0.64 to $0.71 per share.

The company noted that the lower-than-expected loss was due to incremental deferred tax benefits and favorable settlements on lease terminations associated with store and distribution center operating leases. For the prior year, loss from discontinued operations was $0.08 per share.

Big Lots said in December 2013 that it has decided to exit the unprofitable Canadian market, where at that time it operated 73 stores under the Liquidation World or LW brand names, 5 stores under the Big Lots brand name, 2 distribution centers, and an office. Principal operations were to cease during the first quarter of fiscal 2014.

Net sales for the quarter edged up 1.1 percent to $1.28 billion from $1.27 billion in the last year. Fourteen analysts estimated revenues of $1.26 billion for the quarter.

Comparable-store sales, or sales from stores open at least fifteen months rose 0.9 percent for the quarter. The company's guidance was for a slightly negative to slightly positive comparable-store sales.

Looking ahead to the second quarter, the firm estimates income from continuing U.S. operations to be in the range of $0.24 to $0.30 per share, based on estimated comparable-store sales range of +1 to +3 percent. Fifteen analysts expect second-quarter earnings of $0.28 per share.

For fiscal 2014, income from continuing operations are now projected to be $2.35 - $2.50 per share, based on estimated net sales in the range of flat to slightly up and comparable store sales in the range of +1 to +2 percent. Analysts are looking for earnings of $2.38 per share for the fiscal year.

Earlier, the company forecast fiscal 2014 income from continuing U.S. operations to be $2.25 - $2.45 per share, and comparable store sales in the range of flat to 2 percent growth.

BIG closed Thursday's regular trading at $37.51, up 1.24 percent.