(By Balaseshan) Big Lots Inc. (NYSE:BIG) reported a 38.1% drop in quarterly earnings due to higher expenses, missing Street's expectations and the broadline closeout retailer lowered fiscal 2012 earnings guidance. Shares slumped 19.44% in premarket.
Earnings from continuing operations for the second quarter were $22.09 million or $0.36 per share, down from $35.71 million or $0.50 per share last year.
Sales increased 4.4% to $1.22 billion.
Analysts, on average, polled by Thomson Reuters had expected a profit of $0.41 per share on revenue of $1.24 billion.
Sales for U.S. operations increased 1.7% to $1.183 billion. Comparable store sales for U.S. stores open at least fifteen months decreased 1.9%. Net sales for Canadian operations for the latest quarter totaled $35.0 million.
Gross margin for the second quarter marginally declined to 39.2% from 39.5%.
Inventory grew 12.9% to $881 million, representing growth in the number of U.S. stores, per store growth of inventory in its U.S. stores, and improvement of inventory content related to its Canadian operations.
Looking ahead into the fiscal 2012, the company lowered its adjusted earnings from continuing operations guidance to range of $2.80 to $2.95 per share from previous forecast of $3.25 to $3.40 per share, while Street predicts $3.29 per share.
Big Lots now projects 2012 U.S. comparable store sales to decline in the low single digit range and a total U.S. sales increase in the range of 3% to 4%. The company now anticipates sales from Canadian operations of $152 million to $158 million.
BIG closed Wednesday's regular session up 0.28% at $38.84. The stock has been trading between $30.79 and $47.22 for the past 52 weeks.