* 4th-qtr adjusted earnings from U.S. operations beats
* Says adding more freezers and coolers in stores to boost
* Financing program to push furniture sales
* Shares jump 23 pct
(Adds CEO, analyst comment; updates shares)
By Aditi Shrivastava and Maria Ajit Thomas
March 7 Close-out retailer Big Lots Inc
said same-store sales would stop falling in the current fiscal
year as its investments to boost sales start paying off.
Big Lots shares rose as much as 23 percent on Friday after
the company also reported a better-than-expected profit for the
holiday shopping quarter - a period for which most U.S.
retailers posted weak results due to an unseasonably cold winter
and heavy discounting.
Big Lots, which buys products such as furniture and toys
from stores that are closing down and sells them at a discount,
said a pilot furniture financing program and the installation of
freezers and coolers in stores will help boost sales this year.
As a result, Big Lots, which has posted a fall in
same-stores sales in every quarter of fiscal 2013, said
comparable store sales would be flat to up 2 percent in fiscal
"There was a lot that went well today for Big Lots," KeyBanc
Capital Markets analyst Brad Thomas said.
"These are initiatives that the company had talked about in
the past but the benefits that they're seeing are very
encouraging and give us a reason for excitement for this year."
However, Barclays analyst Meredith Adler pointed out that
the rise in the company's shares could also be due to the
increase in the short interest on the stock.
The short interest in the company's stock has risen since it
reported weaker-than-expected third-quarter results in early
December, indicating investors could have been expecting weak
Big Lots said overall sales increased in the low-single
digit percentage range at stores in which it had installed
freezers and coolers.
Encouraged by the success, the company said it would spend
about $60 million to put coolers and freezers in about 600
stores this year to boost its biggest business, food and
The company's pilot furniture financing program also
resulted in a high single to low double digit rise in furniture
The program will be rolled out to most of its stores this
year starting late in the current quarter, which Chief Financial
Officer Tim Johnson said should help boost sales this year.
However, net sales fell about 6 percent to $1.64 billion in
the fourth quarter ended Feb. 1. The year-earlier quarter had
one more week.
The company's U.S. comparable store sales decreased 3
percent, compared with its own forecast of a decline of low- to
Big Lots' net income fell 30 percent to $84.4 million, or
$1.47 per share.
The company reported adjusted earnings of $1.45 per share
from its U.S. operations, beating the average analyst estimate
of $1.40 per share, according to Thomson Reuters I/B/E/S.
The company also said it had closed all its stores in
Canada, where it had been posting losses.
Big Lots' shares have fallen about 21 percent since it
reported third-quarter results on Dec. 5. In that same period
the short interest on its outstanding shares rose to 15 percent
as of Feb. 14 from 9.8 percent as of Dec. 13.
The company's shares were up 19 percent at $34.88 in
afternoon trading on the New York Stock Exchange. They touched a
high of $36.00 earlier in the session.
(Additional reporting by Shailaja Sharma in Bangalore; Editing
by Kirti Pandey and Savio D'Souza)