Big Lots Posts Lower 1Q Profit, Cuts Forecast

By Retail FOXBusiness

Big Lots (BIG) disclosed a 6.1% decline in fiscal first-quarter profits on Thursday, prompting the close-out retailer to drop its full-year guidance below Wall Street’s hopes.

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The Columbus, Ohio-based company said it earned $52.5 million, or 70 cents a share, last quarter, compared with a profit of $55.9 million, or 68 cents a share, a year earlier. Analysts had been calling for EPS of 69 cents.

Total sales slipped 0.6% to $1.23 billion, matching the Street’s view. Same-store sales slumped 3.6%. Gross margins decreased to 40.3% from 40.6%.

At the same time, Big Lots downgraded its full-year EPS view to $2.75 to $2.90, down from $3.05 to $3.15 earlier. Analysts had been calling for full-year profits of $3.03 a share. The company also said it sees same-store sales flat to down 2%.

For the current quarter, Big Lots said forecasted EPS of 38 cents to 48 cents, which is well below the Street’s view of 53 cents. Same-store sales are seen flat to down 3%.

Separately, Big Lots reached a deal to buy Canada’s Liquidation Worldwide, which distributes liquidated inventory to customers in the U.S. and Canada. The deal is worth C$1.8 million, or 6 cents a share.

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“We have diligently studied and analyzed a number of opportunities or paths to enter Canada over the last couple of years and believe the acquisition of Liquidation World provides a long-term growth opportunity for our business and our shareholders,” Big Lots CEO Steve Fishman said in a statement.

Shares of Big Lots dropped 2.01% to $31.68 Thursday morning, trimming its 2011 gain to 6.1%. The company’s stock has slumped nearly 10% over the past year.

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