Big Lots Inc.
) is riding high following better-than-expected first-quarter
fiscal 2014 results. The retailer hit another new 52-week high of
$43.30 on Jun 2, 2014 after touching new high on the previous day
The quarterly earnings from continuing U.S. operations came in at
50 cents per share, way ahead of the Zacks Consensus Estimate of 44
cents per share. Big Lots reported net sales of $1,281.3 million,
up 1.1% year over year and was ahead of the Zacks Consensus
Estimate of $1,267.0 million.
Moreover, the company posted positive comparable-store sales
(comps) after 8 consecutive quarters of negative comps. More
importantly, the company posted narrower-than-expected loss from
the discontinued Canadian operations benefiting from favorable
settlements on lease terminations and additional deferred tax
benefits. Loss came in at 44 cents per share as against expectation
of 64-71 cents per share.
The company's initiatives to pull back from the unprofitable
Canadian markets, shut the underperforming locations and expand
into high growth avenues (furniture financing and food consumables
category) worked in its favor as reflected in a better quarterly
performance and renewed investor interest in the stock.
As a result, management provided guidance for a higher operating
cash flow of $170 million for 2014 as against $165 million expected
The furniture business is likely to be extended to most of the
stores (1,300 stores or 85%) as the business has experienced high
single to low double-digit increases in the last six months making
it a profitable option. Further, food and consumable category has
displayed strong same-store sales (up in mid single-digits) for the
past two quarters, making it another profitable avenue.
Therefore, the company has actively been rolling out its
cooler/freezer program to expand merchandise of food-related items
and target food stamp recipients. It intends to cover 600 stores in
2014, bringing the total number of stores with cooler/freezer
capacity to 700.
Moreover, the company has undertaken several initiatives to
reinstate itself on the growth trajectory, which include store
remodeling, "Edit to Amplify" merchandising strategy and developing
its e-Commerce capabilities to cater to the changing trends.
Currently, Big Lots caries a Zacks Rank # 3 (Hold).
Apart from Big Lots, other stocks like
The Walt Disney Company
) reached new 52-week highs of $84.42, $69.37 and $85.17
respectively, on Jun 2, 2014.
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