First the good news, then the bad.
It's a rose-colored remedy for despair that's been around ever since bad news was invented -- probably with the advent of polyester leisure suits and the opening of the first discotheque. (The good news was that the disco craze and its associated clothing styles lasted only a few horrific years.)
The company earned $0.14 per diluted share on net income of $14.3 million, compared to $0.02 per diluted share on net income of $1.7 million the year before. Analysts had expected a profit of $0.12 per share.
The company also trumpeted the growth of its operating profit, which shot up from 0.2% of sales in 2006 to 2.2% of sales this year. The operating margin now compares favorably with the 1.7% operating profit recently reported by rival Fred's
Big Lots management viewed even a slight decline in same-store sales from a glass-half-full perspective, noting that the 0.5% dip came "on top of a 5.8% comparable store sales increase in the third quarter last year which represented the strongest quarterly performance of the year in fiscal 2006."
Still, there was no getting around a fourth-quarter forecast that sounded about as gloomy as a Marilyn Manson Christmas CD.
According to company officials, Big Lots now expects comparable-store sales to be slightly negative compared to prior guidance, which called for a 1% to 3% increase.
However, given that we experienced one of the worst retail sales months in a decade this past October, and that predictions abound for an equally meager holiday shopping season, Big Lots is not the only discounter feeling the pinch.
The good news? There's always next year.
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