UPDATE 2-Big Lots posts lower profit, cuts forecast

* Q3 EPS $0.15 vs analysts' view $0.14

* Sees Q4 EPS $0.90-$0.99 vs pvs view $1.02-$1.09

* Sees Q4 same-store sales down 2-4 pct

* Shares fall 10.5 pct (Adds byline, company and analyst comment, stock price)

By Nicole Maestri

NEW YORK, Dec 5 (Reuters) - Closeout retailer Big Lots Inc (BIG.N) reported a 14 percent decline in quarterly profit on Friday as its low prices failed to trump a financial crisis that caused shoppers to reduce spending.

The retailer, which specializes in sales of excess inventory from home appliances to toys, cut its earnings forecast for the crucial current quarter, saying it expects sales at stores open at least two years, or same-store sales, to fall.

Its shares tumbled 10.5 percent in morning New York Stock Exchange trading to $14.57.

"At a time when the consumer appetite for value trumps most other aspects of retail and the pipeline for closeout merchandise should be most vibrant, Big Lots business appears to be slowing," wrote JP Morgan analyst Charles Grom, who has a "neutral" rating on the stock.

Big Lots said net income fell to $12.25 million in the third quarter ended Nov. 1 from $14.3 million a year earlier. Earnings on a per-share basis rose to 15 cents from 14 cents because of a decline in shares outstanding.

Analysts on average had been expecting profit of 14 cents per share, according to Reuters Estimates.

"We're in economic times that are unprecedented, and I believe that the consumer behavior reflected that uncertainty or anxiety" in the third quarter, Big Lots CEO Steve Fishman said on a conference call with analysts.

Fishman said Big Lots expects tough economic conditions to extend into 2009, and the retailer has adjusted its inventories to pull back in areas where shopper demand has waned.

CUSTOMERS WANT CONSUMABLES

Big Lots is a closeout retailer that sells what others cannot. When manufacturers are left with extra inventory due to a discontinued line or a change in packaging requirements, they call Big Lots, which will buy the merchandise and sell it in its stores at discounted prices.

While Big Lots said it is fielding more phone calls these days as retailers cancel orders and manufacturers find themselves with excess goods, its customers are also changing their shopping patterns.