Big Lots Inc.
) rallied 23% on the index following the company's announcement
of a $125 million share repurchase program as well as
lower-than-expected costs associated with closure of Canadian
operations. These offset the dismal fourth quarterly fiscal 2013
The company's fourth quarter fiscal 2013 adjusted earnings
came in at 98 cents per share, way below the Zacks Consensus
Estimate of $1.39 per share and fell 53% year over year.
U.S operations contributed $1.45 per share, whereas Canadian
operations reported a loss of 47 cents in the quarter.
Including certain one-time items and discontinued operations,
Big Lots' earnings from operations was 1.39 cents for the fourth
quarter, down 33.2% from the prior-year quarter.
For full year, adjusted earnings came in at $1.75 per share,
lagging the Zacks Consensus Estimate of $2.20 and down 41.3% year
Further, Big Lots, which competes with
Costco Wholesale Corp.
Sears Holdings Corp.
Dollar General Corp.
), provided outlook for first-quarter fiscal 2014 and
declared that its exit from the unprofitable Canadian Markets is
on schedule and costs associated with the same have been lower
Adjusted consolidated net sales decreased 6.2% year over year
to $1,636.3 million but was ahead of the Zacks Consensus Estimate
of $1,606 million. For the full year, adjusted consolidated net
sales came in at $5,301.9 million, which beat the Zacks Consensus
Estimate of $5,253 million but was down 1.2% year over year.
Net sales for its continuing U.S. operations fell 7.3% to
$1,571.9 million in the quarter. However, U.S. comparable-store
sales (comps) declined 3%.
The company's gross profit fell 9.8% to $625.7 million while
gross margin decreased 150 basis points (bps) to 38.2%. Operating
loss was $108.2 million, down 45% from the prior-year period.
Update on Exit from Canada
By first-quarter fiscal 2014, the company expects to shut down
all primary operations and stores, and report these as
"discontinued." In the third quarter of fiscal 2013, Big Lots had
announced its decision to wind up its operations in the
unprofitable Canadian markets. Notably, the company had ventured
into Canada in 2011 with the acquisition of Liquidation World
However, after careful business evaluation, Big Lots decided
to move out of Canada and focus on other areas such as e-Commerce
and omnichannel capabilities.
For the first quarter of fiscal 2014, Big Lots anticipates
loss from Canadian operations to be around $37-$41 million or
64-71 cents per share.
BIG LOTS INC (BIG): Free Stock Analysis
COSTCO WHOLE CP (COST): Free Stock Analysis
DOLLAR GENERAL (DG): Free Stock Analysis
SEARS HLDG CP (SHLD): Free Stock Analysis
To read this article on Zacks.com click here.
Big Lots expects adjusted earnings per share from continuing
operations to be 40-45 cents for first-quarter fiscal 2014 while
comps are expected to be in the range of slightly positive to
For fiscal 2014, Big Lots expects adjusted earnings from
continuing operations in the range of $2.25-$2.45 per share.
Comps are expected to range from flat to a rise of 2%. Net sales
are expected to remain flat to fall slightly.
On Mar 4, 2014, Big Lots' board of directors approved a share
repurchase program worth $125 million, which will commence from
Mar 11, 2014.
During the quarter, Big Lots opened 3 stores in the U.S and
shuttered 35 stores. At the end of the year, the company
operated 1,493 stores in the U.S. For fiscal 2014, the company
expects to open 30 new outlets and close 50 stores.
Other Financial Details
This Zacks Rank #3 (Hold) company ended the quarter with cash and
cash equivalents of $68.6 million, inventories of $915.0 million
and shareholders' equity of $901.4 million. The company, at the
end of the quarter, had $77.0 million in its long-term
obligations under the bank credit facility.. The company expects
to generate $165 million in consolidated cash flow in fiscal 2014
whereas $140 million after removing the impact of closure of