Big Lots' dismal third quarter fiscal 2013 performance compelled us
to downgrade our recommendation to Underperform. The company posted
loss per share of $0.16 that widened from the Zacks Consensus
Estimate and also from the prior year quarter loss. However,
top-line showed a marginal growth of 1.6% but fell short of the
Zacks Consensus Estimate. Consequently, Big Lots trimmed its
earnings forecast. Waning domestic comparable-store sales, sluggish
sales of discretionary items in a low income consumer environment,
and soft sales of the higher margin seasonal products remain the
company's key concerns. In order to revive its core business the
company has decided to wind up its Canadian operations but, we
believe that it will take some time to regain the lost momentum.
Based in Columbus, Ohio 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. At the end of third-quarter fiscal 2013, Big Lots operated
1,525 stores in the U.S., 5 Big Lots store in Canada, and 73
Liquidation World and LW stores in Canada.
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 December 2013, Big Lots announced to pull out from the
unprofitable Canadian market. The company is likely to shut down
all primary operations and stores and report these as
"discontinued" by first-quarter fiscal 2014. It had entered Canada
in 2011 after acquiring Liquidation holdings Inc.
Big Lots Inc. (BIG): Read the Full Research
BIG LOTS INC (BIG): Free Stock Analysis Report
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