Fri. Jan 24th, 2020

Big Lots Reports Q3 Comps And Adjusted EPS In Line With Guidance

25 min read

Big Lots, Inc. (NYSE: BIG) declared its net income of $127.00M, or $3.250 for each diluted share, for the 3rd-quarter of fiscal 2k19 finished November 2, 2k19. This result includes an after-tax gain of $136.60M, or $3.490 for each diluted share, associated with the sale of the company’s distribution center in Rancho Cucamonga, California, as well as after-tax cost of $2.60M, or $0.070 for each diluted share, associated with the implementation of the company’s strategic business transformation. Excluding these items, the adjusted net loss was $7.00M, or $0.180 for each share (see non-GAAP table included later in this release), which compares to the guidance of an adjusted net loss of $0.150 to $0.250 for each share (non-GAAP). The net loss for the 3rd-quarter of fiscal 2k18 was $6.600M, or $0.160 for each share.

Net sales for the 3rd-quarter of fiscal 2k19 totalled $1,168.00M, a 1.60 percent incline compared to $1,149.00M for a similar duration previous year, with the incline resulting from sales growth in high volume new and relocated non-comp stores, and a slightly higher store count year-over-year. Comparable sales declined 0.10 percent for the 3rd-quarter of fiscal 2k19, compared to the guidance of approximately flat.

Inventory and Cash Management
Inventory finished the 3rd-quarter of fiscal 2k19 at $1,117.00M compared to $1,074.00M for a similar duration previous year, with the 4.0 percent incline resulting from planned year-over-year sales inclines and inventory builds in certain merchandise categories including Furniture and Soft Home.

The company finished the 3rd-quarter of fiscal 2k19 with $62.00M of Cash and Cash Equivalents and $501.00M of long-term debt compared to $62.00M of Cash and Cash Equivalents and $488.00M of long-term debt as of the end of the 3rd-quarter of fiscal 2k18.

Dividend
As announced in a separate press release earlier today, on December 4, 2k19, the Board of Directors declared a quarterly cash dividend of $0.300 for each common share. This dividend payment of approximately $12.00M is payable on December 30, 2k19, to shareholders of record as of the close of business on December 16, 2k19. Year-to-date, approximately $87.00M has been returned to shareholders in the form of share repurchases and dividend payments.

FISCAL Q4 2k19 GUIDANCE

  • Initial Q4 guidance for net income of $2.400 to $2.550 for each diluted share, compared to net income of $2.680 for each diluted share for the similar duration previous year
  • Initial Q4 guidance for comparable sales up slightly

For the 4th-quarter of fiscal 2k19, the company estimates net income in the range of $2.400 to $2.550 for each diluted share, compared to net income of $2.680 for each diluted share for the 4th-quarter of fiscal 2k18. This guidance is based on comparable sales up slightly.

FISCAL 2k19 GUIDANCE (non-GAAP)

  • Maintaining guidance for fiscal 2k19 adjusted net income in the range of $3.700 to $3.850 for each diluted share (non-GAAP)

Based on the actual results for the 1st-3.0 quarters and the expectations for the 4th-quarter of fiscal 2k19 noted above, the company is maintaining its guidance for the full year of fiscal 2k19 of adjusted net income in the range of $3.700 to $3.850 for each diluted share (non-GAAP). This compares to an adjusted net income of $4.040 for each diluted share (non-GAAP) for fiscal 2k18. The impact of non-GAAP items on an after-tax basis is expected to be in the range of $98.10M, or $2.490 for each diluted share, for the financial year. This includes the gain on the sale of the California distribution center. Cash consideration from the sale was $191.00M and the company reinvested $69.00M of the proceeds to exercise a purchase option on its corporate headquarters in Columbus, Ohio, effected through a qualified intermediary to accommodate a tax-deferred exchange. The remaining proceeds from the sale were used to pay down the outstanding balance on the company’s unsecured line of credit.

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