Big Lots Inc. (BIG) has recently reported third-quarter 2009 results that topped the Zacks Consensus Estimate, and has raised its earnings outlook. Effective cost management drove the growth in bottom-line, with increased efficiencies in distribution and transportation costs, reduced advertising expenses and decline in payroll costs.
The quarterly earnings of 27 cents a share outstripped the Zacks Consensus Estimate of 18 cents, surging 80% from 15 cents posted in the prior-year quarter. The better-than-expected results prompted management to boost its earnings forecast.
The retailer now expects fourth-quarter 2009 earnings in the range of $1.09 to $1.14 per share, up from 99 cents to $1.04 previously anticipated. Earnings for fiscal year 2009 are expected between $2.15 and $2.20 per share as against $1.92 to $2.02 forecasted earlier.
On a reported basis including one-time items, Big Lots delivered earnings of 37 cents a share, up from 15 cents posted in the year-ago quarter.
However, despite a strong bottom-line, the company recorded low single-digit increase in the top-line due to a weaker consumer environment. Revenue for the quarter under review inched up 1.3% to $1,035.3 million, as cash-strapped consumers continue to prioritize their purchases.
Big Lots operates as a broad-line closeout retailer in the United States offering food, health, beauty, plastics, paper, chemical and pet products as well as home decorative products, besides other product lines.
Comparable-store sales for the quarter dropped 0.2%, a substantial improvement from a decline of 2.4% delivered in the previous quarter. Management now expects comps to rise between 1.5% and 2.5% in fourth-quarter 2009.
The company has opened 52 stores this year, two more than previously planned, and expects to close 30 outlets instead of the 40 estimated earlier, bringing the total number of stores to 1,361 (up 2% from 2008) at the end of fiscal year 2009.
Big Lots ended the quarter with cash and cash equivalents of $45.9 million and shareholder’s equity of $883 million. The company now expects to generate cash flow in the range of $210 million to $215 million for the fiscal year 2009, up from $155 million predicted earlier.
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