(RTTNews) - Thursday, Broadline closeout retailer Big Lots Inc. (BIG: News ) posted higher profit in the first quarter helped by higher gross margins and flat operating expenses. On a per share basis, earnings rose year-over-year and topped the Street view by four cents. In addition, the company issued financial forecast for the second quarter and hiked forecast for the full year.

Q1 Review

The Columbus, Ohio-based company, which offers products under Consumables, Home, Furniture, Hardlines, Seasonal and Other merchandising categories, fetched first-quarter net income of $36.2 million or $0.44 per share, compared to $34.5 million or $0.42 per share in the prior year quarter.

Income from continuing operations for the latest quarter totaled $36.3 million or $0.44 per share, up from $34.5 million or $0.42 per share in the same quarter of last year.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.40 per share. Analysts' estimates typically exclude special items.

Quarterly sales amounted to $1.14 billion, down 0.9% from the previous year's sales of $1.15 billion, and fell shy of eleven Wall Street analysts' consensus revenue estimate of $1.13 billion. Comparable store sales dropped 0.5% for the quarter.

During the recent quarter, operating profit totaled $60.3 million or 5.3% of sales, compared to $58.2 million or 5.1% of sales. Despite lower total sales, operating profit dollars rose 4% due to an improvement in the gross margin rate and a flat operating expense rate as a percent of sales.
Future In Focus

Looking forward to the second quarter, the discount retailer projects earnings from continuing operations to range between $0.26 and $0.32 per share, with comparable store sales estimated to decline in the range of 1% - 3%. Analysts are looking for earnings of $0.30 per share for the second quarter.

Further, based on strong first-quarter performance, the company lifted fiscal 2009 earnings from continuing operations target to $1.85 - $1.95 per share. Full year comparable store sales are expected to range between flat to a decline of 1% and an operating profit rate in the range of 5.4% - 5.6%. Also, Big Lots continues to expect cash flow of about $145 million. Wall Street analysts have a consensus earnings estimate of $1.88 per share for the full year.

Peer Performance

Among other discount store retailers, Target Corp. (TGT: News ) posted a 13.4% decline in first-quarter profit that amounted to $522 million or $0.69 per share from $602 million or $0.74 per share in the year-ago quarter, hurt by the slowdown in consumer spending. Total revenues were almost flat at $14.83 billion.

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