On Jul 2, 2013, Zacks Investment Research downgraded
Big Lots Inc.
) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Big Lots has been witnessing sharp downward estimate revisions
after the company reported disappointing first-quarter fiscal
2013 results that prompted management to take a conservative
stance on its future sales and earnings outlook.
This broad-line closeout retailer in the United States
declared its results on May 30, 2013, wherein earnings, including
U.S. and Canadian operations, came in at 61 cents a share that
met the Zacks Consensus Estimate but dipped 10.3% from 68 cents
earned in the prior-year quarter.
Excluding Canadian operations, adjusted earnings from the U.S.
operations came in at 69 cents per share, down 10.4% year over
Consolidated net sales increased 1.3% year over year to
$1,311.3 million but missed the Zacks Consensus Estimate of
$1,326 million. Comparable-store sales declined 2.9%. The company
stated that delay in tax refund and adverse weather conditions
refrained consumers from spending.
Following soft first-quarter results, Big Lots now projects
fiscal 2013 earnings between $2.87 and $3.12 per share down from
a range of $3.05 to $3.25 forecasted earlier. Net sales are now
expected to increase in the range of 1% to 2%, down from the
growth range of 2% to 3%.
Consequently, we are witnessing a fall in the Zacks Consensus
Estimate. The Zacks Consensus Estimate for the second quarter of
fiscal 2013 plunged 41.9% to 25 cents over the past 60 days,
whereas for the third quarter the Zacks Consensus Estimate of a
loss of 2 cents widened by a penny in the same period.
Moreover, the Zacks Consensus Estimate for fiscal 2013 fell by
7.2% to $2.95 and for fiscal 2014 it tumbled by 5.5% to $3.29 per
share, over the same time frame.
Other Stocks to Consider
Not all stocks in the retail sector are performing as
disappointingly as Big Lots. Other stocks worth considering
Flowers Foods, Inc.
Bon-Ton Stores Inc.
), both of which hold a Zacks Rank #1 (Strong Buy), and
Deckers Outdoor Corp.
), which carries a Zacks Rank #2 (Buy).
BIG LOTS INC (BIG): Free Stock Analysis
BON-TON STORES (BONT): Get Free Report
DECKERS OUTDOOR (DECK): Free Stock Analysis
FLOWERS FOODS (FLO): Free Stock Analysis
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