Big Lots Inc.
) announced the decision to shutter its wholesale operations,
including Big Lots Wholesale, Consolidated International and
Wisconsin Toy wholesale by fiscal 2013 end. During the shutdown,
inventories are expected to liquidate and associates will be
absorbed by the retail segment in the next 90 days.
Following the announcement, pre-tax charges for the third quarter
are estimated to range between $5 and $8 million. Also, post the
wind down, the wholesale business financials will be treated as
discontinued operations for fiscal 2013.
With the rising competition, sales and growth margins of the
wholesale segment have fallen below expectations, leading the
company to shift its attention to retailing and seeking other
avenues to improve customer relations and generate higher returns
for its shareholders.
Although the wind down will be detrimental for many associates
involved with the wholesale segment, Big Lots is striving to
build and implement new long-range strategies to reach out to its
customers. Taking into account its current financial status and
future business opportunities, it has already undertaken
initiatives. These include enhancing cooler and freezer program,
commencing furniture financing and foray into the digital world.
This leading North American closeout merchandise and toy retailer
is expected to announce its third-quarter fiscal 2013 results on
Dec 2, 2013. Our proven model does not conclusively show that Big
Lots is likely to beat the Zacks Consensus Estimate this quarter.
This is because the company carries a Zacks Rank #3 (Hold) and an
of 0.00%. For a stock to outperform, it needs both a positive
Earnings ESP and a Zacks Rank of #1, 2 or 3.
Other stocks in the retail discount industry that warrant a look
Dollar General Corporation
Dollar Tree, Inc.
Ross Stores Inc.
) all holding a Zacks Rank #2 (Buy).
BIG LOTS INC (BIG): Free Stock Analysis
DOLLAR GENERAL (DG): Free Stock Analysis
DOLLAR TREE INC (DLTR): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis
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