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Big Lots, Inc.

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Shares of Big Lots have declined over the past six months. However, the company's strategic endeavors, recent uptrend in the gross margin and positive earnings surprise streak in the last six quarters, all indicate that stock might recover in the near term. In the first-quarter fiscal 2017, the company not only reported robust earnings but also surpassed the guidance range provided previously. Moreover, following better-than-expected first-quarter earnings the company raised fiscal 2017 guidance and now expects adjusted earnings in the $4.05–$4.20, up from the earlier guidance of $3.95–$4.10. While the company’s dismal top-line performance in the trailing four quarters has been a cause of worry, its furniture financing programs has been consistently gaining traction. Further, the challenging retail landscape, aggressive promotional strategies and waning store traffic might weigh on the performance.

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