Big Lots continues to reinstate itself on the growth trajectory
after a dismal run. The company is focused on growth avenues
(Furniture financing and Food consumables category) and has exited
the unprofitable Canadian market, making us more constructive on
the stock. Moreover, to regain momentum the company has undertaken
several initiatives such as store remodel, "Edit to Amplify"
merchandising strategy and developing its e-Commerce capabilities
to cater to the changing trends. However, Big Lots continues to
disappoint as fourth-quarter fiscal 2013 adjusted earnings of $0.98
per share tumbled 53% year over year. The company also provided a
tepid outlook for fiscal 2014, triggering a downtrend in the
Estimate. Also, waning comps, sluggish sales of discretionary items
and competitive backdrop keep us on tenterhooks. Currently, we
maintain our long term Neutral recommendation.
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. As of March 7, 2014, Big Lots operated 1,495 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 is likely to shut down all primary
operations and stores and report these as "discontinued" by
first-quarter fiscal 2014. Notably, it had entered Canada in 2011
after acquiring Liquidation holdings Inc.
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BIG LOTS INC (BIG): Free Stock Analysis Report
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