Big Lots Moves up on Sales Slide

Big Lots Inc (NYSE:BIG) reported a third-quarter FY21 sales decline of 3.1% year-on-year and increased 14.4% from Q3 FY19 to $1.34 billion, beating the analyst consensus of $1.32 billion.

Comparable sales decreased 4.7% versus a 17.8% increase last year. On a two-year basis, comparable sales increased 12.3%.

The EPS loss of $(0.14) beat the analyst consensus of $(0.16).

The gross margin for the quarter decreased 160 basis points Y/Y to 38.9%. The company reported an operating loss of $(4.1) million for the quarter.

The company held $70.6 million in cash and equivalents as of October 30. Cash provided by operating activities for nine months ended October 30, totaled $75.7 million.

The company's Board of Directors authorized a new repurchase of up to $250 million of outstanding common shares.

The company's quarterly cash dividend of $0.30 per common share will be payable on December 29, to shareholders of record on December 15.

Big Lots sees Q4 EPS of $2.05 - $2.20, below the consensus of $2.39. The company expects Q4 gross margin to be down approximately 150 basis points to last year, driven by freight headwinds.

The company cut FY21 EPS guidance to $5.70 - $5.85 (prior view $5.90 - $6.05), missing the consensus of $5.97. In this morning’s news release, Big Lots admitted it expects supply chain challenges to continue in the near term.

Meanwhile, the company expects to see gross margin expansion in 2022.

BIG shares were gaining $1.87, or 4.3% at $45.49 early Friday.