We continue to maintain our Neutral recommendation on Big Lots. The
company has launched an extensive turnaround strategy to reinstate
itself on the growth trajectory. In addition to the broader "Edit
To Amplify" initiative, management is paying special attention to
furniture and food, and consumable categories as both continue to
gain traction. Pulling back from the unprofitable Canadian
Operations was a brilliant move as it now allows full focus on the
domestic operations. Developing e-Commerce capabilities to cater to
the changing trends is expected to be a long term growth driver.
All these were well reflected in the better-than expected results
for the first quarter of fiscal 2014. However, lingering macro
economic headwinds and sluggish discretionary sales might run down
all its turnaround initiatives. Stiff competition adds more to the
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 May 30, 2014, Big Lots operated 1,496 stores in the
Consumables Category: These include food, health and beauty,
plastics, paper, chemical, and pet departments.
Home category: These include domestics, stationery and home
Furniture Category: These include the upholstery, mattresses,
ready-to-assemble and case goods departments (consist of bedroom,
dining room and occasional furniture).
Hardlines Category: These include electronics, appliances, tools
and home maintenance departments.
Seasonal Category: These include lawn and garden, Christmas,
summer and other holiday departments.
Other Category: These include the toy, jewelry, infant
accessories and apparel departments.
In Dec 2013, Big Lots declared its exit from the unprofitable
Canadian market. The company has shut down all primary operations
and stores and has reported these as "discontinued" in
first-quarter fiscal 2014. Notably, it had entered Canada in 2011
after acquiring Liquidation holdings Inc.
Big Lots Inc. (BIG): Read the Full Research
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