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Big Lots (BIG) Tops Q2 Earnings, Misses Sales, Updates View
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Big Lots Inc. (BIG - Free Report) reported better-than-expected earnings in the second quarter of fiscal 2016. The company reported adjusted earnings per share of 52 cents that beat the Zacks Consensus Estimate of 45 cents and also increased 26.8% year over year. Also, earnings per share surpassed the company’s guided range of 42–47 cents. Notably, the company’s earnings have surpassed the Zacks Consensus Estimate for the third consecutive quarter. Segments like Furniture, mattresses, upholstery and case goods were the top performers during the quarter.
On the other hand, revenues of $1,203.2 million missed the Zacks Consensus Estimate of $1,219 million, and also declined 0.5% from the year-ago figure, primarily due to lower store count in comparison to the prior-year quarter.
Big Lots’ merchandising strategies and effective marketing and inventory management are paying off quite well. This is evident from the company’s robust comparable-sales (comps) growth. Comps increased 0.3% in the quarter, thereby representing the tenth straight quarter of comps growth.
The company’s gross profit grew 2.2% year over year to $486.4 million in the reported quarter. Gross margin came in at 40.4% in comparison to the year-ago figure of 39.3%. Operating profits totaled $38.9 million compared with $30.5 million recorded in the prior-year quarter.
Big Lots ended the quarter with cash and cash equivalents of $58.4 million, up 1.8% year over year. Inventories were down 1.6% to $808.6 million. Total shareholder equity at the end of the quarter decreased 15.1% year over year to $543.5 million.
In the quarter under review, the company closed four stores and opened one. As of Jul 30, 2016, Big Lots operated 1,445 stores.
Long-term obligations under the bank credit facility totaled $257.9 million at the end of the quarter.
On Mar 1, 2016, management authorized a new share buyback program worth $250 million. The company brought it to completion in the second quarter.
On Aug 25, the company’s board of directors declared a quarterly cash dividend of 21 cents. The dividend will be paid on Sep 23, to shareholders on record as of Sep 9, 2016.
Guidance
The company provided its guidance for the third as well as fourth quarters and also updated its fiscal 2016 guidance. For the fiscal, adjusted earnings per share are projected in the band of $3.45 to $3.55 as against the previous guidance of $3.35 to $3.50. This represents growth of 15–18% over $3.01 per share recorded in fiscal 2015. The Zacks Consensus Estimate for earnings for fiscal 2016 is pegged at $3.50.
In fiscal 2016, comps are expected to increase in the range of 1% to 2%. The company expects sales to increase slightly. Also, it anticipates cash flow generation of $210 million in fiscal 2016.
For the fiscal third quarter, the company expects adjusted loss of 4 cents to adjusted profit of a penny per share. Comps are expected to be in the range of flat to up 2%. The Zacks Consensus Estimate for the fiscal third quarter is pegged at a loss of 3 cents per share.
For the fiscal fourth quarter, earnings per share from continuing operations are forecasted in the range of $2.18 to $2.23 per share. Comps are expected to be in the range of flat to up 2%. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $2.22 per share.
Zacks Rank and Key Picks
Big Lots currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the retail space include Burlington Stores, Inc. (BURL - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and Urban Outfitters Inc. (URBN - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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Big Lots (BIG) Tops Q2 Earnings, Misses Sales, Updates View
Big Lots Inc. (BIG - Free Report) reported better-than-expected earnings in the second quarter of fiscal 2016. The company reported adjusted earnings per share of 52 cents that beat the Zacks Consensus Estimate of 45 cents and also increased 26.8% year over year. Also, earnings per share surpassed the company’s guided range of 42–47 cents. Notably, the company’s earnings have surpassed the Zacks Consensus Estimate for the third consecutive quarter. Segments like Furniture, mattresses, upholstery and case goods were the top performers during the quarter.
On the other hand, revenues of $1,203.2 million missed the Zacks Consensus Estimate of $1,219 million, and also declined 0.5% from the year-ago figure, primarily due to lower store count in comparison to the prior-year quarter.
Big Lots’ merchandising strategies and effective marketing and inventory management are paying off quite well. This is evident from the company’s robust comparable-sales (comps) growth. Comps increased 0.3% in the quarter, thereby representing the tenth straight quarter of comps growth.
The company’s gross profit grew 2.2% year over year to $486.4 million in the reported quarter. Gross margin came in at 40.4% in comparison to the year-ago figure of 39.3%. Operating profits totaled $38.9 million compared with $30.5 million recorded in the prior-year quarter.
BIG LOTS INC Price, Consensus and EPS Surprise
BIG LOTS INC Price, Consensus and EPS Surprise | BIG LOTS INC Quote
Other Financial Details
Big Lots ended the quarter with cash and cash equivalents of $58.4 million, up 1.8% year over year. Inventories were down 1.6% to $808.6 million. Total shareholder equity at the end of the quarter decreased 15.1% year over year to $543.5 million.
In the quarter under review, the company closed four stores and opened one. As of Jul 30, 2016, Big Lots operated 1,445 stores.
Long-term obligations under the bank credit facility totaled $257.9 million at the end of the quarter.
On Mar 1, 2016, management authorized a new share buyback program worth $250 million. The company brought it to completion in the second quarter.
On Aug 25, the company’s board of directors declared a quarterly cash dividend of 21 cents. The dividend will be paid on Sep 23, to shareholders on record as of Sep 9, 2016.
Guidance
The company provided its guidance for the third as well as fourth quarters and also updated its fiscal 2016 guidance. For the fiscal, adjusted earnings per share are projected in the band of $3.45 to $3.55 as against the previous guidance of $3.35 to $3.50. This represents growth of 15–18% over $3.01 per share recorded in fiscal 2015. The Zacks Consensus Estimate for earnings for fiscal 2016 is pegged at $3.50.
In fiscal 2016, comps are expected to increase in the range of 1% to 2%. The company expects sales to increase slightly. Also, it anticipates cash flow generation of $210 million in fiscal 2016.
For the fiscal third quarter, the company expects adjusted loss of 4 cents to adjusted profit of a penny per share. Comps are expected to be in the range of flat to up 2%. The Zacks Consensus Estimate for the fiscal third quarter is pegged at a loss of 3 cents per share.
For the fiscal fourth quarter, earnings per share from continuing operations are forecasted in the range of $2.18 to $2.23 per share. Comps are expected to be in the range of flat to up 2%. The Zacks Consensus Estimate for fiscal third-quarter earnings is pegged at $2.22 per share.
Zacks Rank and Key Picks
Big Lots currently has a Zacks Rank #2 (Buy). Some other stocks worth considering in the retail space include Burlington Stores, Inc. (BURL - Free Report) , The Children's Place, Inc. (PLCE - Free Report) and Urban Outfitters Inc. (URBN - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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 >>