Big Lots' (BIG) Q1 Earnings: Will the Beat Streak Continue?

Shutterstock photo

Big Lots, Inc. BIG is slated to report first-quarter fiscal 2018 results on Jun 1. Last quarter, the company delivered a positive earnings surprise of 6.2%. Let's see how things are shaping up prior to this announcement.

Which Way Are Top & Bottom-Line Estimates Headed?

The Zacks Consensus Estimate for first-quarter earnings per share stands at $1.20, reflecting a year-over-year increase of 4.4%. The consensus estimate is within the company's guided range of $1.15 to $1.22. We note that the Zacks Consensus Estimate has dropped a penny in the last seven days.

Big Lots has a remarkable history, at least in terms of the bottom line. The company's fourth-quarter fiscal 2017 results marked the ninth consecutive quarter of an earnings beat. In the trailing four quarters, the company has outperformed the Zacks Consensus Estimate by an average of 12.3%.

Big Lots, Inc. Price, Consensus and EPS Surprise

Big Lots, Inc. Price, Consensus and EPS Surprise | Big Lots, Inc. Quote

Well the obvious question that comes to mind is whether Big Lots will be able to sustain its earnings surprise streak in the fiscal first quarter. Though the past trend indicates a positive surprise, it will not be wise to jump to a conclusion without analyzing the factors at play.

Deciding Factors

Big Lots' furniture financing programs and soft home category have been consistently gaining traction, which is likely to reflect in first-quarter fiscal 2018 results. Meanwhile, management has been expanding assortments in the furniture category by including lawn and garden items.

In order to tap the opportunities in the furniture and soft home categories, the company has added brands and revamped the food department by giving it a fresh look for the convenience of customers. Further, the company has rolled out a cooler/freezer facility in stores in an attempt to expand its merchandise of food-related items to target food stamp recipients. These initiatives are likely to boost comps and revenues.

However, Big Lots is not doing well on the revenue front. Its sales have lagged estimates in eight of the last 10 quarters. Analysts surveyed by Zacks expect revenues of $1,283 million for the fiscal first quarter, down almost 1%.

What Does the Zacks Model Unveil?

Our proven model shows that Big Lots is unlikely to beat earnings estimates this quarter. This is because a stock needs to have both - a positive  Earnings ESP  and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) - for this to happen. You can uncover the best stocks to buy or sell before they're reported with our  Earnings ESP Filter .

Big Lots has an Earnings ESP of -2.09% and a Zacks Rank #4 (Sell).

Stocks With Favorable Combination

Here are some companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:

DSW Inc. DSW has an Earnings ESP of +3.47% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

PVH Corp. PVH has an Earnings ESP of +0.56% and a Zacks Rank #3.

The Kroger Co. KR has an Earnings ESP of +3.41% and a Zacks Rank #3.

5 Medical Stocks to Buy Now

Zacks names 5 companies poised to ride a medical breakthrough that is targeting cures for leukemia, AIDS, muscular dystrophy, hemophilia, and other conditions.

New products in this field are already generating substantial revenue and even more wondrous treatments are in the pipeline. Early investors could realize exceptional profits.

Click here to see the 5 stocks >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

DSW Inc. (DSW): Free Stock Analysis Report

Big Lots, Inc. (BIG): Free Stock Analysis Report

The Kroger Co. (KR): Free Stock Analysis Report

PVH Corp. (PVH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Symbols: DSW , BIG , KR , PVH

More from Zacks.com




Equity Research

Research Brokers before you trade

Want to trade FX?