Big Lots' fiscal Q3 net income fell 76% to US$4.2M due to loss related to newly acquired Canadian operations, lower gross margin; revenue rose 8% to US$1.14B

COLUMBUS, Ohio , December 2, 2011 () – Big Lots Inc. said Friday that its third-quarter net income fell 76 percent due to a loss related to its newly acquired Canadian operations and a lower gross margin. Shares stumbled after the retailer's profit results fell short of Wall Street expectations.

But the retailer, which buys overstocked items ranging from food to housewares from manufacturers and sells them at a discount, raised its yearly guidance on a brighter holiday outlook.

Net income totaled $4.2 million, or 6 cents per share, in the August-October period, from $17.7 million, or 23 cents per share, in the same quarter a year ago. Analysts expected 8 cents per share, according to FactSet.

Excluding a loss from continuing operations from its acquisition of Canadian company Liquidation World in June, net income totaled 17 cents per share.

Revenue rose 8 percent to $1.14 billion from $1.06 billion last year. Analysts expected $1.12 billion.

Revenue in stores open at least two years in the U.S. rose 1.7 percent. The measure is considered an important gauge of a retailer's performance because it excludes stores that have recently opened or closed.

In the U.S., revenue rose 6 percent to $1.11 billion while revenue from Canadian stores acquired in July was $21.5 million.

The Columbus, Ohio, company expects fourth-quarter net income of $1.59 to $1.66 per share from continuing operations. That's within the range of analyst expectations. The average estimate is profit of $1.63 per share.

It expects yearly net income of $2.85 to $2.92 per share from continuing operations, up from previous guidance of $2.80 to $2.90 per share. Analysts expect $2.89 per share.

Shares fell $2.88, or 7.3 percent, to $36.85 in premarket trading.

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