Big Lots said it stayed in line with its guidance in the third quarter and the company strengthened its balance sheet with the sale of a distribution center.
The off-price retailer recorded net income of $127 million, or $3.25 per diluted share, for the third quarter of fiscal 2019 ended November 2. Net income includes an after-tax gain of $136.6 million, or $3.49 per diluted share, associated with the sale of the company’s distribution center in Rancho Cucamonga, CA, as well as after-tax expense of $2.6 million, or $0.07 per diluted share, associated with the implementation of the company’s strategic business transformation. Excluding these items, adjusted net loss was $7 million, or $0.18 per share, compared to a net loss for the third quarter of fiscal 2018 of $6.6 million, or $0.16 per share.
Net sales for the third quarter totaled $1.16 billion, a 1.6% increase compared to $1.14 billion for the same period last year, with the increase resulting from sales growth in high volume new and relocated non-comp stores, and a slightly higher store count year-over-year. Comparable sales decreased 0.1% for the third quarter of fiscal 2019, compared to guidance of approximately flat.
Bruce Thorn, president and CEO of Big Lots, said, “We are pleased to have delivered operating results in line with our guidance, while strengthening our balance sheet with the proceeds from the sale of our California distribution center. I’m also highly encouraged by the progress we are making on our transformational strategies, as part of Operation North Star, to drive profitable long-term growth and deliver value to our shareholders. After a year of restructuring and transition in 2019, and despite the ongoing impact of tariffs, we expect to return to EBIT and EPS growth in 2020, including significant improvement in normalized free cash flow.”