Big Lots Posts Surprise Revenue Decline

Big Lots increased its profit but posted a surprise revenue decline as the discount retailer had a lower store count and faced seasonal factors in its fourth quarter.

The Ohio-based company buys a range of merchandise discounted as a result of liquidations, production overruns and packaging changes and sells it at significantly lower prices than traditional discount retailers. Big Lots said results were dampened by winter storm Jonas and a later start to the tax refund season, which delayed spending for its lower-income customers.

The company said it would raise its quarterly cash dividend to 21 cents from 19 cents and announced a $250 million share buyback program.

Big Lots posted an increase in comparable sales at stores open at least 15 months of 0.7%, which was below its guidance of 1% to 2%. The company noted it was the eighth quarter of comparable store growth.

For the current year, Big Lots forecast per-share earnings of $3.20 to $3.35 a share and for the current quarter. Big Lots said it expects per-share earnings of $0.66 to $0.72. Both figures bracketed analyst expectations. In the quarter, Big Lots expects comparable-store sales to increase in the low-single-digits.

Big Lots reported a profit of $94.5 million, or $1.91 a share, compared with $94.4 million, or $1.77, a year earlier. Excluding discontinued operations and special items, Big Lots posted an adjusted profit of $2.00 a share, compared with $1.76 in the quarter a year ago.

Revenue fell 0.6% to $1.58 billion, as fewer open stores offset same-store sales growth.

Analysts were looking for $1.98 in earnings and $1.6 billion in revenue.

Gross margin rose to 40.9% from 40.8%.

Shares, up about 4.6% in the last three months, were inactive in premarket trading.

Write to Austen Hufford at