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Big Lots (BIG) Tops Q4 Earnings, Issues Guidance; Stock Up
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Shares of Big Lots Inc. (BIG - Free Report) gained 3.8% on Mar 3, 2017, after the company reported fifth consecutive quarter of earnings beat when it posted fourth-quarter fiscal 2016 results and provided a robust fiscal 2017 guidance. Moreover, the company’s shares have comfortably outperformed the Zacks categorized Retail-Discount & Variety industry with a return of 10.4% in the past six months compared with 0.7% for the latter.
The company reported adjusted earnings from continuing operations of $2.26 per share beating the Zacks Consensus Estimate of $2.23 and also increased 12.4% year over year. Further, earnings surpassed its guided range of $2.18–2.23 per share. Segments like Furniture, mattresses and upholstery were the top performers during the quarter.
Including one-time items earnings from continuing operations came in at $1.99, up 4.2% year over year.
While revenues of $1,579.2 million missed the Zacks Consensus Estimate of $1,590 million and also declined 0.3% from the year-ago figure, primarily due to lower store count in comparison with the prior-year quarter. Notably, the company’s revenues missed the Zacks Consensus Estimate for the third straight quarter.
Big Lots reported comparable sales growth of 0.3%, making it the twelfth consecutive quarter of flat or positive comps.
The company’s gross profit grew 0.9% year over year to $653.3 million. Gross margin came in at 41.4% in comparison with the year-ago figure of 40.9%. Operating profits totaled $144.5 million, up 6.6% from the prior-year quarter.
Big Lots ended the quarter with cash and cash equivalents of $51.2 million, down 5.5% year over year. Inventories were up 1% to $858.7 million. Total shareholder equity at the end of the quarter was $650.3 million.
In the quarter under review, the company closed 13 stores and opened three. As of Jan 28, 2017, Big Lots operated 1,432 stores.
Long-term obligations under the bank credit facility totaled $106.4 million at the end of the quarter under review.
On Feb 28, the board of directors raised the quarterly cash dividend by about 19% to 25 cents. The dividend will be paid on Mar 31, to shareholders on record as of Mar 17. Moreover, the company also announced $150 million of share repurchase program.
Guidance
The company provided guidance for the first quarter as well as fiscal 2017. For fiscal 2017, adjusted earnings per share are projected in the band of $3.95–$4.10. This represents growth of 9–13% over $3.64 per share recorded in fiscal 2016. The Zacks Consensus Estimate for earnings for fiscal 2016 is pegged at $4.01 per share.
Comps are expected to increase in the range of 1–2%, while total sales are likely to be flat to up slightly. Moreover, the company expects cash flow generation of nearly $180–$190 million.
For the first quarter, earnings per share are forecasted in the range of 95 cents to $1.05 compared with 82 cents earned in the prior-year quarter. Comps are expected to be flat to up 2%. The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.00 per share.
Kate Spade & Company delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
Zumiez delivered an average positive earnings surprise of 30.9% in the trailing four quarters and has a long-term earnings growth rate of 15%.
Genesco delivered an average positive earnings surprise of 31.4% in the trailing four quarters and has a long-term earnings growth rate of 9.5%.
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Big Lots (BIG) Tops Q4 Earnings, Issues Guidance; Stock Up
Shares of Big Lots Inc. (BIG - Free Report) gained 3.8% on Mar 3, 2017, after the company reported fifth consecutive quarter of earnings beat when it posted fourth-quarter fiscal 2016 results and provided a robust fiscal 2017 guidance. Moreover, the company’s shares have comfortably outperformed the Zacks categorized Retail-Discount & Variety industry with a return of 10.4% in the past six months compared with 0.7% for the latter.
The company reported adjusted earnings from continuing operations of $2.26 per share beating the Zacks Consensus Estimate of $2.23 and also increased 12.4% year over year. Further, earnings surpassed its guided range of $2.18–2.23 per share. Segments like Furniture, mattresses and upholstery were the top performers during the quarter.
Including one-time items earnings from continuing operations came in at $1.99, up 4.2% year over year.
While revenues of $1,579.2 million missed the Zacks Consensus Estimate of $1,590 million and also declined 0.3% from the year-ago figure, primarily due to lower store count in comparison with the prior-year quarter. Notably, the company’s revenues missed the Zacks Consensus Estimate for the third straight quarter.
Big Lots reported comparable sales growth of 0.3%, making it the twelfth consecutive quarter of flat or positive comps.
The company’s gross profit grew 0.9% year over year to $653.3 million. Gross margin came in at 41.4% in comparison with the year-ago figure of 40.9%. Operating profits totaled $144.5 million, up 6.6% from the prior-year quarter.
Big Lots, Inc. Price and EPS Surprise
Big Lots, Inc. Price and EPS Surprise | Big Lots, Inc. Quote
Other Financial Details
Big Lots ended the quarter with cash and cash equivalents of $51.2 million, down 5.5% year over year. Inventories were up 1% to $858.7 million. Total shareholder equity at the end of the quarter was $650.3 million.
In the quarter under review, the company closed 13 stores and opened three. As of Jan 28, 2017, Big Lots operated 1,432 stores.
Long-term obligations under the bank credit facility totaled $106.4 million at the end of the quarter under review.
On Feb 28, the board of directors raised the quarterly cash dividend by about 19% to 25 cents. The dividend will be paid on Mar 31, to shareholders on record as of Mar 17. Moreover, the company also announced $150 million of share repurchase program.
Guidance
The company provided guidance for the first quarter as well as fiscal 2017. For fiscal 2017, adjusted earnings per share are projected in the band of $3.95–$4.10. This represents growth of 9–13% over $3.64 per share recorded in fiscal 2016. The Zacks Consensus Estimate for earnings for fiscal 2016 is pegged at $4.01 per share.
Comps are expected to increase in the range of 1–2%, while total sales are likely to be flat to up slightly. Moreover, the company expects cash flow generation of nearly $180–$190 million.
For the first quarter, earnings per share are forecasted in the range of 95 cents to $1.05 compared with 82 cents earned in the prior-year quarter. Comps are expected to be flat to up 2%. The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.00 per share.
Stocks to Consider
Big Lots currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the retail sector include Kate Spade & Company , Zumiez, Inc. (ZUMZ - Free Report) and Genesco Inc. (GCO - Free Report) , all these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kate Spade & Company delivered an average positive earnings surprise of 14.6% in the trailing four quarters and has a long-term earnings growth rate of 28.3%.
Zumiez delivered an average positive earnings surprise of 30.9% in the trailing four quarters and has a long-term earnings growth rate of 15%.
Genesco delivered an average positive earnings surprise of 31.4% in the trailing four quarters and has a long-term earnings growth rate of 9.5%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017?
Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>