Big Lots Inc.
) seems to be on a roll as its shares have been gaining traction
since reporting better-than-expected first-quarter fiscal 2014
results on May 30, 2014. The stock has jumped 6.8% since.
Quarterly earnings from continuing U.S. operations came in at 50
cents per share, ahead of the Zacks Consensus Estimate of 44 cents
per share. Net sales of the company nudged up 1.1% year over year
to $1,281.3 million, surpassing the Zacks Consensus Estimate of
The company also posted positive comps after 8 consecutive quarters
of negative comps. Comps for the quarter were up 0.9%.
Big Lots' initiatives to pull back from the unprofitable Canadian
markets, shut underperforming locations and expand into high-growth
avenues worked in its favor as reflected by the better quarterly
performance and renewed investor interest in the stock.
Management also provided guidance for a higher operating cash flow
of $170 million for 2014 as against $165 million expected earlier.
Alongside, Big Lots is focusing on the furniture financing program
as well as on the food and consumables category as both continue to
gain momentum. The furniture business is likely to be extended to
most of the stores (1,300 stores or 85% of the total store count)
as it has experienced high single to low double-digit increases
continually over the past quarters, which makes it a profitable
Going forward, it also intends to concentrate more on developing
its e-commerce and omni-channel capacities. We believe that other
initiatives undertaken by Big Lots, such as store remodeling,
changes in its loyalty reward program, and the 'Edit to Amplify'
merchandising strategy will fuel further growth.
The company's impressive results and its strong fundamentals helped
shares reach a 52-week high of $46.06 on Jun 23, amassing a
significant year-to-date return of 60.2% and boosting investors'
Big Lots has long-term earnings growth expectation of 14.8%, which
is relatively better than the peer group average of 14.5%.
Additionally, the last traded price is 6.5% below the Zacks
Consensus average analyst price target of $48.46, leaving further
room for upside potential for this Zacks Rank #3 (Hold) stock.
Apart from Big Lots, other stocks like
Constellation Brands Inc.
) reached new 52-week highs of $35.45, $88.50 and $85.61
respectively, on Jun 23, 2014.
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