UPDATE: Big Lots (BIG) Tops Q1 EPS by 94c, Revenues Beat, Comp. Sales Up 10.3%

Big Lots (NYSE: BIG) reported Q1 EPS of $1.26, $0.94 better than the analyst estimate of $0.32. Revenue for the quarter came in at $1.44 billion versus the consensus estimate of $1.31 billion.

• COMPARABLE SALES INCREASE 10.3%
• STORE COMPS UP 10%
• ECOMMERCE DIRECT COMPS UP 45%
• EARNINGS PER SHARE OF $1.26 INCREASE 37%

Commenting on today's announcement, Bruce Thorn, President and CEO of Big Lots stated, "I am very proud of our team over the past quarter. We've grown as an organization through these unprecedented times, and it has been amazing to see the team step up our game. Most importantly, our primary focus has been on maintaining a safe and healthy environment for our associates and customers. In turn, that has enabled us to keep our store and ecommerce operations open, and continue serving both our loyal existing customers and many new ones. Our strong financial results are the outcome of those efforts, and I want to give a big and special thanks to all of our associates, and particularly to our associates working in our stores and distribution centers."

Mr. Thorn continued, "Looking forward, we are off to a strong start in the second quarter, and believe we are well positioned to navigate through the ongoing COVID-19 crisis, with strong alignment between our assortment and current customer demand. Equally, we are very focused on ensuring sustainable improvements in our business beyond the crisis. We are applying the learnings of the last few months and continue to roll out our Operation North Star strategies to support our positioning as a go-to neighborhood discount retailer."

Company Outlook

As of March 30, 2020, the company withdrew its full year guidance for fiscal 2020. At this point, the company does not believe it has sufficient visibility to reinstate full year guidance.

For the second quarter to date, comparable sales are up strongly, reflecting a continuation of the acceleration in business that began in mid-April. The company expects comp trends to moderate over the balance of the quarter due to a number of factors, including competitors and other retailers reopening, the planned cancellation of the July Friends and Family event, potential inventory constraints in certain categories, and the abatement of stimulus-driven demand.

Assuming comparable sales for the second quarter increased in line with the first quarter, the company would expect diluted EPS to be in the range of $0.65 to $0.80. This outlook incorporates anticipated pre-tax expenses related to COVID-19 of approximately $18 million. It further incorporates an approximate $7 million adverse pre-tax impact from the expected closing of the sale and leaseback transaction for the four owned distribution centers, but excludes the expected gain on sale from the transaction. Based on quarter to date sales, the company believes the foregoing comparable sales assumption is conservative.

Notwithsanding the prior commentary, given the highly fluid environment and uncertain outlook on consumer behavior, the company believes the range of outcomes is wider than in a normal quarter.

For earnings history and earnings-related data on Big Lots (BIG) click here.

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