Big Lots Inc.
), broad-line closeout retailer, is set to report its first-quarter
fiscal 2014 results on May 30, 2014. Last quarter, it posted
breakeven earnings. Let us see how things are developing for this
Factors Influencing the Quarter
A difficult retail environment along with inclement weather
(February and March) remains a drag on the retail sector. Big Lots
might not prove to be an exception. Moreover, the company has been
facing lower discretionary sales, falling comps and margin
compression for some time now.
To battle these, the company has initiated a turnaround which
includes pullback from Canada and more focus on profitable avenues
like furniture financing and the food consumables category. Though
these steps are in the right direction, we stay on the sidelines as
they might turn out to be time consuming.
Our proven model does not conclusively project Big Lots as likely
to beat earnings this quarter. That is because a stock needs to
have both a positive
and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to
happen. This is not the case here as you will see below.
Negative Zacks ESP:
ESP for Big Lots is -2.27%. This is because the Most Accurate
estimate is pegged at 43 cents while the Zacks Consensus Estimate
stands at 44 cents.
Big Lots Zacks Rank #3 (Hold) increases the predictive power of
ESP. However, we need to have a positive ESP to be confident about
an earnings surprise. We caution against stocks with a Zacks Rank
#4 and #5 (Sell-rated stocks) going into an earnings announcement,
especially when the company is witnessing negative estimate
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows these to have the right combination of elements to post an
OmniVision Technologies, Inc.
) with an Earnings ESP of +50.00% holds a Zacks Rank #1.
United Natural Foods, Inc.
) with an Earnings ESP of +2.70% holds a Zacks Rank #3.
Lions Gate Entertainment Corp.
) has an Earnings ESP of +2.56% and a Zacks Rank #3.
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BIG LOTS INC (BIG): Free Stock Analysis Report
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