Big Lots Inc (BIG): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
In third-quarter fiscal 2014, Big Lots reported adjusted loss of $0.06 per share, a penny wider than the Zacks Consensus Estimate, and revenues of $1,107.1 million, which also fell short of the Zacks Consensus mark. Moreover, rise in online shopping has the potential to mar sales in the upcoming quarter as the company does not have omnichannel capacities. This was well reflected in the subdued guidance for the fourth quarter where comps are projected to increase in the low-single digits. However, the company's efforts to turnaround are impressive. Furniture, food and consumables categories continue to gain traction. Moreover, the company completed rolling out freezer/cooler facility to 750 stores right before the holiday season. Also, furniture financing along with adding more brands to the assortments and revamping the food department are some of measures that are being pursued to generate higher sales. Consequently we remain Neutral on the stock.

Overview:

Based in Columbus, OH and founded in 1967, Big Lots, Inc. (BIG) is a broad-line closeout retailer in the United States. The company offers products under various merchandising categories, which include Consumables, Home, Furniture, Hardlines, Seasonal and Other. As of Dec 5, 2014, Big Lots operated 1,495 stores in the U.S.

Consumables Category: This includes food, health and beauty, plastics, paper, chemical and pet departments.

Home category: This includes domestics, stationery and home decorative departments.


Furniture Category: This includes the upholstery, mattresses, ready-to-assemble and case goods departments (consist of bedroom, dining room and occasional furniture).

Hardlines Category: This includes electronics, appliances, tools and home maintenance departments.

Seasonal Category: This includes lawn and garden, Christmas, summer and other holiday departments.

Other Category: This includes the toy, jewelry, infant accessories and apparel departments.

Big Lots pulled out of Canada in the first-quarter fiscal 2014 and reported the operations as "discontinued." In the third quarter of fiscal 2013, Big Lots announced its decision to wind up its operations in the unprofitable Canadian markets. Notably, the company had ventured into Canada in 2011 with the acquisition of Liquidation World Inc. However, after careful business evaluation, Big Lots decided to move out of Canada and focus on other areas such as e-Commerce and omnichannel capabilities.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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As of 12/19/2014, 04:15 PM


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