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Big Lots (BIG) Issues Upbeat Comps & Earnings Outlook for Q3
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Big Lots, Inc. (BIG - Free Report) recently provided a business update for third-quarter fiscal 2020. Management cited that it has been witnessing robust sales, which is likely to help deliver a sturdy quarterly performance. Encouragingly, this positions the company well ahead of the festive season, the most crucial part of the year for retailers. Notably, the company’s growth strategies, including Operation North Star and its strong assortment as well early reads on Christmas are aiding customer acquisition.
That said, management anticipates comparable sales growth in mid teens for fiscal third quarter against 0.1% decline registered in the year-ago period. Based on impressive sales view, Big Lots envisions third-quarter earnings in the bracket of 50-70 cents per share against a loss of 18 cents reported in the same quarter a year earlier. Markedly, the latest outlook significantly outshines the analysts’ projection. We note that the Zacks Consensus Estimate for the impending quarter is currently pegged at 18 cents, which is likely to witness upward revisions in the coming days.
Looking Strong on Transformation Efforts & E-commerce
Big Lot’s transformation initiative, referred to as Operation North Star, focuses on driving top-line growth, cost containment, and enhancement in systems and infrastructure. Also, the strategy is focused on core enablers, where management has made important inroads with latest capabilities and tools in several areas of business such as real estate, supply chain and store engagement. Further, management remains focused on improving the performance by enhancing digital capabilities and expansion of the Broyhill brand. The company is also on track with its pantry-optimization initiative.
The Zacks Rank #2 (Buy) company is leaving no stone unturned with respect to leveraging marketing strategies and expanding its e-commerce platform. Impressively, it is experiencing strong e-commerce growth, buoyed by the success of the Buy-Online, Pick-up-In-Store functionality. Notably, Big Lots also partnered with Instacart to expedite same-day delivery service. Moreover, it has been expanding the payment options online with lease-online, pick-up-in-store, the online version of the Easy Leasing program by Progressive and the Big Lots credit card. On its second-quarter earnings call, management notified that the e-commerce channel has witnessed a 70% increase in traffic with the conversion rate increasing three times in comparison to the year-earlier period.
The Columbus, OH-based company’s shares have skyrocketed 231% over the past six months, significantly rallying ahead of the industry’s 29.1% increase.
Tapestry (TPR - Free Report) has a long-term earnings-growth rate of 10% and a Zacks Rank #2.
Sprouts Farmers Market (SFM - Free Report) , also a Zacks Rank #2 stock, has a long-term earnings-growth rate of 9.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Big Lots (BIG) Issues Upbeat Comps & Earnings Outlook for Q3
Big Lots, Inc. (BIG - Free Report) recently provided a business update for third-quarter fiscal 2020. Management cited that it has been witnessing robust sales, which is likely to help deliver a sturdy quarterly performance. Encouragingly, this positions the company well ahead of the festive season, the most crucial part of the year for retailers. Notably, the company’s growth strategies, including Operation North Star and its strong assortment as well early reads on Christmas are aiding customer acquisition.
That said, management anticipates comparable sales growth in mid teens for fiscal third quarter against 0.1% decline registered in the year-ago period. Based on impressive sales view, Big Lots envisions third-quarter earnings in the bracket of 50-70 cents per share against a loss of 18 cents reported in the same quarter a year earlier. Markedly, the latest outlook significantly outshines the analysts’ projection. We note that the Zacks Consensus Estimate for the impending quarter is currently pegged at 18 cents, which is likely to witness upward revisions in the coming days.
Looking Strong on Transformation Efforts & E-commerce
Big Lot’s transformation initiative, referred to as Operation North Star, focuses on driving top-line growth, cost containment, and enhancement in systems and infrastructure. Also, the strategy is focused on core enablers, where management has made important inroads with latest capabilities and tools in several areas of business such as real estate, supply chain and store engagement. Further, management remains focused on improving the performance by enhancing digital capabilities and expansion of the Broyhill brand. The company is also on track with its pantry-optimization initiative.
The Zacks Rank #2 (Buy) company is leaving no stone unturned with respect to leveraging marketing strategies and expanding its e-commerce platform. Impressively, it is experiencing strong e-commerce growth, buoyed by the success of the Buy-Online, Pick-up-In-Store functionality. Notably, Big Lots also partnered with Instacart to expedite same-day delivery service. Moreover, it has been expanding the payment options online with lease-online, pick-up-in-store, the online version of the Easy Leasing program by Progressive and the Big Lots credit card. On its second-quarter earnings call, management notified that the e-commerce channel has witnessed a 70% increase in traffic with the conversion rate increasing three times in comparison to the year-earlier period.
The Columbus, OH-based company’s shares have skyrocketed 231% over the past six months, significantly rallying ahead of the industry’s 29.1% increase.
A Few More Key Picks in Retail
Target (TGT - Free Report) has a long-term earnings-growth rate of 7.2% and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Tapestry (TPR - Free Report) has a long-term earnings-growth rate of 10% and a Zacks Rank #2.
Sprouts Farmers Market (SFM - Free Report) , also a Zacks Rank #2 stock, has a long-term earnings-growth rate of 9.2%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>