DOW JONES NEWSWIRES
Big Lots Inc. (BIG) posted a surprise 4.9% rise in fiscal
first-quarter earnings as it held expenses in check and margins
improved.
The closeout retailer also raised its fiscal-year forecasts, now
projecting a profit of $1.85 to $1.95 a share with same-store sales
flat to down 1%. The company's March view was a profit of $1.75 to
$1.90, above analysts' then-expectations, on a same-store sales
decline of as much as 2%.
Big Lots on Thursday also forecast second-quarter earnings in
line with Wall Street's views.
Many retailers saw some signs of hope in the latest quarter,
though many bottom-line improvements could be attributed more to
cost cutting and leaner inventories than sales gains. Discounters
have been hurt less as consumers cut spending.
Big Lots plans to benefit from its peers' troubles by opening in
long-vacant locations or cutting better deals now that rents have
fallen, taking on inventory at lower costs and using capital to
spruce up stores.
For the quarter ended May 2, the company reported a profit of
$36.2 million, or 44 cents a share, up from $34.5 million, or 42
cents a share, a year earlier. The company in March had forecast 34
cents to 40 cents.
Big Lots - which helps manufacturers clear their warehouses of
discontinued, overproduced and otherwise unwanted goods - reported
that gross margin rose to 40.5% from 40.3%. Higher initial prices
and lower freight costs more than offset stronger sales of
lower-margin goods, including consumables.
Earlier this month, Big Lots reported revenue edged down 0.9% to
$1.14 billion. Same-store sales, or sales at stores open at least
two years, eased 0.5% as its home and seasonal categories saw
declines.
For the fiscal second quarter, the company expects earnings of
26 cents to 32 cents on a same-store drop of 1% to 3%. Analysts
polled by Thomson Reuters recently were looking for a 30-cent
profit.
Shares closed at $23.65 on Wednesday and didn't trade premarket.
The stock is off by roughly a third in the past eight months,
though it has soared nearly 90% since hitting a 2 1/2-year low in
January.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com