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Big Lots Plans Canadian Departure As Losses Grow

Friday December 6th, 2013 - 1:10PM


As part of its third quarter earnings announcement, Big Lots revealed that it is pulling out of Canada after two years of effort didn’t produce the traction the retailer expected. In its earnings announcement, Big Lots posted a consolidated loss from continuing operations of $9.5 million, or 17 cents per diluted share, versus a consolidated loss from continuing operations of $6 million, or 10 cents per diluted share, in the fiscal 2012 third quarter, the company reported.

The result for the 2013 quarter include an after-tax gain on the sale of real estate of $2.2 million, or four cents per diluted share, and an after-tax loss for wholesale operations the company also is winding down of $2.6 million, or five cents per diluted share, Big Lots pointed out. Consolidated comparable store sales decreased 2.5%, the company noted, while net sales increased 1.6% to $1.15 billion versus the 2012 third quarter.

Financial analysts polled by Thomson Reuters, on average, expected a net loss of eight cents per share.

In the United States, Big Lots adjusted net sales for the third quarter, which excludes the wholesale operations, increased 1.8% to $1.1 billion versus adjusted net sales of $1.09 billion for the 2012 period. U.S. comps declined 2.5% in the quarter year over year. Adjusted loss from continuing U.S. operations totaled $4.1 million, or seven cents per diluted share, versus an adjusted loss from continuing U.S. operations of $1.9 million, or three cents per diluted share, for the 2012 period.

In the meantime, net sales for Canadian operations decreased 1.9% to $38.3 million in the quarter as comps decreased 0.9% versus the 2012 period. Third-quarter net loss in Canada was $5 million, or nine cents per diluted share, compared to a net loss of $4.3 million, or seven cents per diluted share, for the year-ago period.

In its report on their quarter financials, Big Lots maintained that the decision to withdraw from the Canadian market provides the company with the opportunity to refocus resources on introducing e-commerce and omnichannel capabilities in the U.S., rolling out coolers and freezers to stores, launch a furniture financing program, realign the merchandising organization and implement its so-called "edit to amplify" merchandising strategy.