Columbus, Ohio – Big Lots reported a net loss of $9.5 million for the third quarter of fiscal 2013, up from a net loss of about $6 million in the year-ago period. The retailer also said it will exit the unprofitable Canadian market, which it entered through an acquisition in 2011.
Net sales grew about 2% in the same period, to $1.15 billion from $1.13 billion, and consolidated same-store sales declined about 2.5%.
Higher operating expenses offset the increase in net sales, resulting in the net loss, which came in higher than anticipated by Wall Street. For the full year fiscal 2013, Big Lots is forecasting a consolidated same-store sales decline of 2% to 3% and a total U.S. sales decrease in the range of 1% to 2%.
The retailer said it will close its stores in Canada, where it operates 73 locations. The stores are part of the Liquidation World Liquidation World chain that Big Lots acquired in 2011. Big Lots intends to begin an orderly wind-down process immediately and expect that principal operations will cease during the first quarter of fiscal 2014.
“We acquired a struggling Canadian business in July 2011 with the intention of revitalizing it and using it as the base for bringing extreme value merchandising and the Big Lots brand to customers in Canada,” the company said its earnings release. “Over the last two years, we have invested in this business and our team in Canada has worked diligently to turn it around. However, we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated and believe that the significant further capital investments and execution risk associated with continuing to pursue a turnaround would not be in the best interests of our company and shareholders.”
Big Lots also plans to close down its wholesale operations in the fourth quarter of this fiscal year, at which time it will be treated as discontinued operations.