Big Lots 3Q comps down, cuts outlook

COLUMBUS, Ohio Big Lots lowered its fourth quarter comps guidance today after reporting a same-store sales decrease for the third quarter.

The company reported net sales of 1.03 billion for the quarter, a decrease of 1.8% from $1.05 billion last year. Comparable-store sales for decreased 0.5% for the quarter on top of a 5.8% comparable-store sales increase in the third quarter last year which represented the strongest quarterly performance of the year in fiscal 2006.

Big Lots today reported third quarter fiscal 2007 net income totaled $14.3 million, or 14 cents per diluted share, compared to $1.7 million, or 2 cents per diluted share, in the prior year.

Commenting on the third quarter results announced today, Steve Fishman, chairman and ceo stated, "We are very pleased to report today record earnings for the third consecutive quarter this year. Our team remained incredibly focused on our strategy and driving operating profit growth amidst a challenging retail environment and with top line sales that were not as vibrant as originally planned. We continue to believe that our business model, with a low leverage point and high cash flow potential, is unique in retail and positions us well for the future."

For the year to date period ended Nov. 3, net income totaled $66.4 million, or 62 cents per diluted share, compared to $19.7 million, or 18 cents per diluted share, in the prior year.

For the fourth quarter of fiscal 2007, the company said it now expects comparable-store sales to be slightly negative compared to its previous guidance which called for a 1% to 3% comparable-store sales increase. According to the company, the change in sales guidance is principally related to continued softness in the higher margin toys department and home category. 

The company expects fourth quarter earnings guidance to be in the range of 81 cents to 86 cents per diluted share. This level of earnings compares to income from continuing operations for the fourth quarter of fiscal 2006 of 83 cents per diluted share.

For the fiscal year 2007, Big Lots said it expects income from continuing operations of $1.37 to $1.42 per diluted share, an increase of 36% to 41% compared to income from continuing operations of $1.01 per diluted share for fiscal 2006.