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Big Lots Q2 misses Street

Big Lots’ earnings fell short of analysts’ expectations for the second quarter in a row.

The close-out retailer reported income of $24.2 million, or 59 cents per share, for the second quarter ended Aug. 4. This is a drop compared to last year's second quarter income of $29.1 million, or 67 cents per share. It also missed analyst forecasts of 67 cents, and the company's own guidance of 60 to 70 cents a share.

Net sales rose to $1.22 billion from $1.21 billion from the same period last year, with the increase in comparable store sales partially offset by a lower store count year-over-year. However, this was still slightly below analyst estimates of $1.23 billion.

Comparable store sales increased 1.6%, compared to the company’s guidance of flat to 2% growth.

The results come mere days after Big Lots named Bruce Thorn as president and CEO. Thorn was most recently the president and COO of Tailored Brands, parent company of Men’s Wearhouse, Jos. A. Bank, and Joseph Abboud. He replaced David Campisi, who retired in April.

As part of the company’s ongoing focus on capital structure, Big Lots extended its current $700 million five year unsecured credit facility. The credit facility now covers a new five year period (expiring August 2023), and maintains a similar structure and financial covenants as the retailer’s previous facility.

Looking ahead to the third quarter, Big Lots expects a comparable store sales increase of 2% to 4%, and income of 4 cents per diluted share to a loss of 6 cents per share, compared to adjusted income of 6 cents per share for the same period last year.

For the full year, Big Lots estimates that comparable store sales will increase by approximately 1%. Income will be in the range of $4.40 to $4.55 per diluted share, compared to fiscal 2017 adjusted income of $4.45 per share.
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