Big Lots Tanking on Poor Results, Lowered Forecast

Big Lots Inc. (NYSE: BIG) reported second quarter EPS of $0.36 on $1.18 billion in sales before markets opened today. In the same period a year ago, the discount retailer reported EPS of $0.50 on revenue of $1.17 billion. Second-quarter results compare to the Thomson Reuters consensus estimates for EPS of $0.41 and $1.24 billion in revenue.

For the full fiscal year, Big Lots now expects adjusted EPS of $2.80-$2.95, down from EPS of $2.99 in 2011 and previous guidance of $3.25-$3.40. The consensus estimate called for EPS of $3.29.

U.S. same-store sales fell nearly 2% compared to the same period a year ago, and gross margin fell from 39.5% to 39.2%.

The company also announced today that it has appointed a new COO, a new chief administrative officer, a new chief merchandising officer, a new CFO, and a new senior vice-president for human resources.

The big problem for Big Lots is that the company’s target audience is currently strapped for cash and the problem will likely get worse as gasoline prices, home rents, and food costs rise. A relatively small portion of the company’s sales are based on consumer staples when compared with Family Dollar Stores Inc. (NYSE: FDO) and Dollar General Corp. (NYSE: DG).

Big Lots’ shares are down more than -18% in pre-market trading at $31.85. The current 52-week range is $30.79-$47.22. Thomson Reuters had a consensus analyst price target of $43.18 before today’s results were announced.

Paul Ausick