Big Lots 3Q Profit Drops on Canadian Loss, U.S. Slowdown

By Retail FOXBusiness

Hurt by a loss in its Canadian business and a slowdown domestically, Big Lots (BIG) narrowed its profit in the third quarter and fell short of Wall Street expectations.

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However, the company updated its fiscal guidance to a range of $2.85 to $2.92 a share, compared with year-earlier $2.83, which is in line with Wall Street’s view of $2.89.

It also upped its non-GAAP fourth-quarter forecast to $1.59 to $1.66 a share on sales growth between 1% and 2%. Analysts are looking for a quarterly profit of $1.63.

The Columbus, Ohio-based closeout retailer said it earned $4.2 million, or 6 cents a share, in the third quarter, compared with a year-earlier profit of $17.7 million, or 23 cents a share.

The results narrowly missed average analyst estimates polled by Thomson Reuters of 9 cents. Revenue for the three months ended Oct. 29 was $1.14 billion, up from $1.06 billion a year ago, just beating the Street’s view of $1.13 billion.

Fueling the sales increase was a 1.7% increase in U.S. comparable sales, or those at stores open at least two years, bringing total domestic sales up 5.8%.

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However, the company’s gross margin was squeezed during the period, hurt by a $6.9 million operating loss in its new Canadian operation, which Big Lots acquired in July.

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