Big Lots (NYSE:BIG) revealed a narrowed second-quarter profit that still trumped Wall Streets forecast as inventories grew with the addition of a new Canadian business, leading to a tighter fiscal view.
The company now expects fiscal 2011 earnings in the range of $2.80 to $2.90 a share, up from its earlier view between $2.75 and $2.90 a share. Wall Street is looking for a profit of $2.89.
The Columbus, Ohio-based closeout retailer posted net income for the second quarter of $35.7 million, or 50 cents a share, compared with $38.9 million, or 48 cents a share, in the same quarter last year.
The results were ahead of average analyst estimates polled by Thomson Reuters of 44 cents.
Revenue for the three months ended July 30 was $1.17 billion, up 2.2% from $1.14 billion a year ago, narrowly trumping the Streets view of $1.16 billion.
The company, which completed the acquisition of Liquidation World, now known as Big Lots Canada, last quarter, said sales at U.S. stores open at least two years slumped 1.5% last quarter.
However, inventory ended the period up 6% to $780 million compared with $734 million a year ago, a reflection of the Canadian deal, growth in U.S. stores and approximately 2% per store growth of inventory in U.S. stores, according to Big Lots.
The company opened 15 new Big Lots during the period.
The retailer started working on its stock repurchase program announced in May, investing some $236 million to buy back 7.2 million shares at an average price of $32.67 a share last quarter.
Through Wednesday, Big Lots had invested $77 million in the current quarter for a total of 2.5 million shares at an average price of $31.11.
It has about $145 million remaining under its $400 million May program.