BIG
$41.33
Big Lots
$.10
.24%
Earnings Details
1st Quarter April 2018
Friday, June 01, 2018 6:00:00 AM
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Summary

Big Lots Misses

Big Lots (BIG) reported 1st Quarter April 2018 earnings of $0.95 per share on revenue of $1.3 billion. The consensus earnings estimate was $1.19 per share on revenue of $1.3 billion. The Earnings Whisper number was $1.23 per share. Revenue fell 2.2% compared to the same quarter a year ago.

The company said it expects second quarter earnings of $0.60 to $0.70 per share. The current consensus earnings estimate is $0.77 per share for the quarter ending July 31, 2018. The company also said it now expects fiscal year earnings of $4.50 to $4.70 per share. The company's previous guidance was earnings of $4.75 to $4.95 per share and the current consensus earnings estimate is $4.86 per share for the year ending January 31, 2019.

Big Lots Inc operates as a broadline closeout retailer in the United States. It offers products under six merchandising categories: Food, Consumables, Soft Home, Hard Home, Furniture & Home Decor, Seasonal, and Electronics & Accessories.

Results
Reported Earnings
$0.95
Earnings Whisper
$1.23
Consensus Estimate
$1.19
Reported Revenue
$1.27 Bil
Revenue Estimate
$1.29 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Big Lots Reports Results For The First Quarter Of Fiscal 2018

COLUMBUS, Ohio, June 1, 2018 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today reported income of $31.2 million, or $0.74 per diluted share, for the first quarter of fiscal 2018 ended May 5, 2018. This result includes after-tax expense of $8.7 million, or $0.21 per diluted share, associated with the settlement of shareholder litigation matters and the retirement of our former CEO. Excluding these expenses, adjusted income totaled $40.0 million, or $0.95 per diluted share (see non-GAAP table included later in this release), which compares to our guidance of income of $1.15 to $1.22 per diluted share, and income of $51.5 million, or $1.15 per diluted share for the first quarter of fiscal 2017. Comparable store sales decreased 3.0% for the first quarter of fiscal 2018, compared to our guidance of flat to slightly down. Net sales for the first quarter of fiscal 2018 were $1,268.0 million compared to $1,295.0 million for the same period last year with the decrease resulting from the decline in comparable store sales and a lower store count year-over-year.


Earnings per diluted share









Q1 2018


Q1 2017








Earnings per diluted share


$0.74


$1.15


Impact of settlement of shareholder litigation matters (1)


$0.06


-


Impact of CEO retirement (1)


$0.15


-








Earnings per diluted share - adjusted basis


$0.95


$1.15








(1)  Non-GAAP detailed reconciliation provided in our statements below.

Inventory and Cash Management

Inventory ended the first quarter of fiscal 2018 at $850 million, a 1.6% increase compared to $836 million for fiscal 2017. Inventory levels per store increased 3% compared to last year, partially offset by a lower store count year-over-year.

We ended the first quarter of fiscal 2018 with $65 million of Cash and Cash Equivalents and $174 million of borrowings under our credit facility compared to $66 million of Cash and Cash Equivalents and $116 million of borrowings under our credit facility as of the end of the first quarter of fiscal 2017. Cash flow (cash provided by operating activities less capital expenditures) over the last 12 months has been focused on returning cash to our shareholders and investing in strategic initiatives designed to support future growth.

Total Cash Returned To Shareholders
As a reminder, on March 7, 2018, our Board of Directors approved a share repurchase program ("2018 Share Repurchase Program") providing for the repurchase of up to $100 million of our common shares in open market and/or privately negotiated transactions at our discretion, subject to market conditions and other factors. Common shares acquired through the 2018 Share Repurchase Program will be available to meet obligations under our equity compensation plans and for general corporate purposes. During the first quarter of fiscal 2018, the Company did not repurchase shares under this authorized program.

In the first quarter of fiscal 2018, we returned $14 million to shareholders in the form of dividend payments in April. As announced in a separate press release earlier today, on May 31, 2018, our Board of Directors declared a quarterly cash dividend of $0.30 per common share. This dividend payment of approximately $13 million is payable on June 29, 2018, to shareholders of record as of the close of business on June 15, 2018.

FISCAL Q2 2018 GUIDANCE

  • Provides initial Q2 guidance for income of $0.60 to $0.70 per diluted share, compared to income of $0.67 per diluted share for the same period last year
  • Provides initial Q2 guidance for comparable store sales in the range of flat to +2%

For the second quarter of fiscal 2018, we estimate income will be in the range of $0.60 to $0.70 per diluted share, compared to income of $0.67 per diluted share for the second quarter of fiscal 2017. This guidance is based on comparable store sales in the range of flat to +2%, compared to a 1.8% comparable store sales increase in the second quarter of fiscal 2017.

FISCAL 2018 GUIDANCE

  • Updates guidance for fiscal 2018 adjusted income to be in the range of $4.50 to $4.70 per diluted share (non-GAAP), compared to fiscal 2017 adjusted income of $4.45 per diluted share (non-GAAP)
  • Updates guidance for fiscal 2018 comparable store sales increase of approximately 1%
  • Updates guidance for fiscal 2018 cash flow of $110 to $120 million

Based on the actual results for the first quarter and the guidance provided for the second quarter, we are updating our guidance for the full year of fiscal 2018 of adjusted income in the range of $4.50 to $4.70 per diluted share (non-GAAP), compared to adjusted income of $4.45 per diluted share (non-GAAP) for fiscal 2017. This outlook is based on a comparable store sales increase of approximately 1%. We estimate this financial performance will result in cash flow of $110 to $120 million.













Q2


Full Year














2018 Guidance


2017


2018 Guidance (1)


2017 (1)












Earnings per diluted share


$0.60  -  $0.70


$0.67


$4.50  -  $4.70


$4.45






















(1)  Non-GAAP detailed reconciliation provided below.

Conference Call/Webcast
We will host a conference call today at 8:00 a.m. to discuss our financial results for the first quarter of fiscal 2018 and provide commentary on our outlook for fiscal 2018. We invite you to listen to the webcast of the conference call through the Investor Relations section of our website http://www.biglots.com. If you are unable to join the live webcast, an archive of the call will be available through the Investor Relations section of our website http://www.biglots.com/after 12:00 noon today and will remain available through midnight on Friday, June 15, 2018. A replay of this call will also be available beginning today at 12:00 noon through June 15 by dialing 1.888.203.1112 (Toll Free USA and Canada) or 1.719.457.0820 (International), and entering Replay Passcode 5522371. All times are Eastern Time.

Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is a community retailer operating 1,415 BIG LOTS stores in 47 states, dedicated to friendly service, trustworthy value, and affordable solutions in every season and category – furniture, food, décor, and more. We exist to serve everyone like family, providing a better shopping experience for our customers, valuing and developing our associates, and creating growth for our shareholders. Big Lots supports the communities it serves through the Big Lots Foundation, a charitable organization focused on four areas of need: hunger, housing, healthcare, and education. For more information about the Company, visit www.biglots.com.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and such statements are intended to qualify for the protection of the safe harbor provided by the Act. The words "anticipate," "estimate," "expect," "objective," "goal," "project," "intend," "plan," "believe," "will," "should," "may," "target," "forecast," "guidance," "outlook" and similar expressions generally identify forward-looking statements. Similarly, descriptions of our objectives, strategies, plans, goals or targets are also forward-looking statements. Forward-looking statements relate to the expectations of management as to future occurrences and trends, including statements expressing optimism or pessimism about future operating results or events and projected sales, earnings, capital expenditures and business strategy. Forward-looking statements are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Forward-looking statements are and will be based upon management's then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. Although we believe the expectations expressed in forward-looking statements are based on reasonable assumptions within the bounds of our knowledge, forward-looking statements, by their nature, involve risks, uncertainties and other factors, any one or a combination of which could materially affect our business, financial condition, results of operations or liquidity.

Forward-looking statements that we make herein and in other reports and releases are not guarantees of future performance and actual results may differ materially from those discussed in such forward-looking statements as a result of various factors, including, but not limited to, current economic and credit conditions, the cost of goods, our inability to successfully execute strategic initiatives, competitive pressures, economic pressures on our customers and us, the availability of brand name closeout merchandise, trade restrictions, freight costs, the risks discussed in the Risk Factors section of our most recent Annual Report on Form 10-K, and other factors discussed from time to time in our other filings with the SEC, including Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. This release should be read in conjunction with such filings, and you should consider all of these risks, uncertainties and other factors carefully in evaluating forward-looking statements.

You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and SEC filings.

Big Lots, Inc. logo. (PRNewsfoto/Big Lots, Inc.)

 

















BIG LOTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)












MAY 5


APRIL 29






2018


2017






(Unaudited)


(Unaudited)












ASSETS















Current assets:








Cash and cash equivalents


$64,830


$65,731




Inventories


849,627


836,121




Other current assets


137,714


88,283




   Total current assets


1,052,171


990,135











Property and equipment - net


604,524


518,820











Deferred income taxes


21,335


45,020



Other assets


48,956


45,740






$1,726,986


$1,599,715




















LIABILITIES AND SHAREHOLDERS' EQUITY      















Current liabilities:








Accounts payable


$342,185


$369,135




Property, payroll and other taxes


80,747


85,843




Accrued operating expenses


92,080


75,525




Insurance reserves


72,669


39,893




Accrued salaries and wages


23,019


26,856




Income taxes payable


25,612


55,059




   Total current liabilities


636,312


652,311











Long-term obligations under bank credit facility


174,000


115,700











Deferred rent


59,858


56,444



Insurance reserves


56,321


57,303



Unrecognized tax benefits


15,165


17,423



Other liabilities


96,218


46,629











Shareholders' equity


689,112


653,905






$1,726,986


$1,599,715



 

















BIG LOTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)












13 WEEKS ENDED


13 WEEKS ENDED




MAY 5, 2018


APRIL 29, 2017





%



%




(Unaudited)


(Unaudited)

















Net sales


$1,267,983

100.0


$1,294,970

100.0










Gross margin


511,958

40.4


524,275

40.5










Selling and administrative expenses 


438,092

34.6


415,972

32.1










Depreciation expense


28,529

2.2


28,595

2.2









Operating profit


45,337

3.6


79,708

6.2










Interest expense


(1,576)

(0.1)


(1,009)

(0.1)










Other income (expense)


508

0.0


(517)

(0.0)









Income before income taxes


44,269

3.5


78,182

6.0










Income tax expense


13,030

1.0


26,670

2.1









Net income


$31,239

2.5


$51,512

4.0

















Earnings per common share
















Basic


$0.74



$1.16











Diluted


$0.74



$1.15


















Weighted average common shares outstanding
















Basic


42,113



44,361











Dilutive effect of share-based awards


105



367











Diluted


42,218



44,728










Cash dividends declared per common share


$0.30



$0.25


 

















BIG LOTS, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In thousands)












13 WEEKS ENDED


13 WEEKS ENDED






MAY 5, 2018


APRIL 29, 2017






 (Unaudited) 


 (Unaudited) 




  Net cash provided by operating activities


$96,885


$85,454












  Net cash used in investing activities


(65,437)


(22,010)












  Net cash used in financing activities


(17,794)


(48,877)











Increase in cash and cash equivalents


13,654


14,567




Cash and cash equivalents:








  Beginning of period


51,176


51,164




  End of period


$64,830


$65,731



 

BIG LOTS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)

The following tables reconcile: selling and administrative expenses, selling and administrative expense rate, operating profit, operating profit rate, income tax expense, effective income tax rate, net income, and diluted earnings per share for the first quarter of 2018 and the full-year 2017 (GAAP financial measures) to adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted net income, and adjusted diluted earnings per share (non-GAAP financial measures).

 First quarter of 2018 - Thirteen weeks ended May 5, 2018 


















 As Reported 


 Adjustment to
exclude CEO
retirement costs 


 Adjustment to
exclude
shareholder
litigation matter 


 As Adjusted
(non-GAAP) 

 Selling and administrative expenses 

$             438,092


$                     (7,018)


$                     (3,500)


$             427,574

 Selling and administrative expense rate 

34.6%


(0.6%)


(0.3%)


33.7%

 Operating profit 


45,337


7,018


3,500


55,855

 Operating profit rate 


3.6%


0.6%


0.3%


4.4%

 Income tax expense 


13,030


895


879


14,804

 Effective income tax rate 


29.4%


(2.1%)


(0.3%)


27.0%

 Net income 


31,239


6,123


2,621


39,983

 Diluted earnings per share  


$                    0.74


$                         0.15


$                         0.06


$                    0.95

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted net income, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with GAAP (1) the costs associated with the retirement of our former CEO of $7,018 ($6,123, net of tax); and (2) a pretax charge related to the settlement in principle of shareholder litigation matters of $3,500 ($2,621, net of tax).

 Full Year 2017 - Fifty-three weeks ended February 3, 2018 



















 As Reported 


 Adjustment to
exclude gain on
insurance
recoveries 


 Impact on deferred
taxes resulting from
U.S. tax reform 


 As Adjusted (non-
GAAP) 

 Selling and administrative expenses 

$          1,723,996


$                      3,000


$                             -


$          1,726,996

 Selling and administrative expense rate 

32.7%


0.1%


-


32.8%

 Operating profit 


301,353


(3,000)


-


298,353

 Operating profit rate 


5.7%


(0.1%)


-


5.7%

 Income tax expense 


105,522


(1,149)


(4,517)


99,856

 Effective income tax rate 


35.7%


(0.0%)


(1.5%)


34.2%

 Net income 


189,832


(1,851)


4,517


192,498

 Diluted earnings per share  


$                    4.38


$                       (0.04)


$                         0.10


$                    4.45

The above adjusted selling and administrative expenses, adjusted selling and administrative expense rate, adjusted operating profit, adjusted operating profit rate, adjusted income tax expense, adjusted effective income tax rate, adjusted net income, and adjusted diluted earnings per share are "non-GAAP financial measures" as that term is defined by Rule 101 of Regulation G (17 CFR Part 244) and Item 10 of Regulation S-K (17 CFR Part 229). These non-GAAP financial measures exclude from the most directly comparable financial measures calculated and presented in accordance with GAAP (1) a pretax gain on insurance recoveries associated with merchandise-related legal matters of $3,000 ($1,851, net of tax); and (2) the impact to deferred taxes resulting from the U.S. Tax Cuts and Jobs Act of 2017 of $4,517.

Our management believes that the disclosure of these non-GAAP financial measures provides useful information to investors because the non-GAAP financial measures present an alternative and more relevant method for measuring our operating performance, excluding special items included in the most directly comparable GAAP financial measures, that management believes is more indicative of our on-going operating results and financial condition. Our management uses these non-GAAP financial measures, along with the most directly comparable GAAP financial measures, in evaluating our operating performance.

 

 

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SOURCE Big Lots, Inc.