Big Lots shares tank after disappointing results

Big Lots Inc. (BIG) missed analyst expectations on revenue and earnings for the second quarter of 2018, sending shares falling nearly 12% in premarket hours. Net sales increased slightly to $1.22 billion from $1.21 billion in the same period last year. Comparable store sales rose 1.6%, but the growth was partially offset by a lower store count year-over-year.

Net income dropped to $24.2 million or $0.59 per diluted share from $29.1 million or $0.67 per diluted share in the prior-year period. The current quarter earnings number came in below the company’s guidance range of $0.60 to $0.70 per share.

Inventory at the end of Q2 was higher at $854 million versus $810 million last year due to the timing of receipts of early fall and seasonal-related merchandise into distribution centers.

For the third quarter of 2018, Big Lots expects to achieve an income of $0.04 per diluted share to a loss of $0.06 per share. Comparable store sales are expected to increase 2% to 4%. For the fourth quarter, the company expects diluted EPS to be $2.90 to $3.00 and comp sales to grow in the low single digit range.

For the full year of 2018, Big Lots expects adjusted diluted EPS to come in the range of $4.40 to $4.55 and comparable store sales to grow around 1%. Cash flow is supposed to be $100 million to $110 million.