UPDATE 1-Big Lots' adjusted profit beats estimates, shares jump

(Adds details, analyst comment, shares)

March 7 (Reuters) - Close-out retailer Big Lots Inc reported a better-than-expected adjusted profit for the holiday quarter, sending the company's shares up as much as 22 percent in early trading.

Big Lots, which buys products such as furniture and toys from stores that are closing down and sells them at a discount, also said the loss from the winding down of its Canadian operations was lower than expected.

"We were encouraged by Big Lots' better-than-expected fourth-quarter results, particularly given the highly promotional competitive environment and brutal weather conditions that plagued many other retailers' holiday performance," BB&T Capital Markets analyst Anthony Chukumba wrote in a note to clients.

Many retailers blamed the severe cold weather that hit parts of the United States and Canada for weak results during the quarter.

Big Lots said net sales fell about 6 percent to $1.64 billion in the quarter ended Feb. 1. The year-earlier quarter had one more week.

Chukumba said the closure of the company's money-losing and distracting Canadian operations was good news.

Big Lots closed all its stores in Canada by the end of February.

The net loss for Canadian operations was 47 cents per share, lower than the 65-75 cents per share the company had forecast.

Big Lots' net income fell to $84.4 million, or $1.47 per share in the quarter, from $120.3 million, or $2.10 per share, a year earlier.

The company reported earnings of $1.45 per share from continuing U.S. operations, excluding other items.

Analysts on average had expected $1.40 per share, according to Thomson Reuters I/B/E/S.

Big Lots also said it would buy back $125 million of its shares.

The company's shares were up 21.5 percent at $35.55 on the New York Stock Exchange in early trading.

(Reporting by Aditi Shrivastava and Maria Ajit Thomas in Bangalore; Editing by Kirti Pandey)