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Big Lots (BIG) Reiterates Q4 Outlook: Should You Hold?

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Just ahead of the ICR Conference 2016 to be held this Wednesday, Big Lots, Inc. (BIG - Free Report) announced that it is retaining its fourth-quarter fiscal 2015 guidance after taking into account quarter-to-date results and plans for the remainder of January.

Big Lots reaffirmed its fourth-quarter earnings per share guidance from continuing operations in the range of $1.95–$2.00 and continues to project comparable sales growth in the band of 1–2%, thus marking the eight successive quarter of sales increase. Management stated that Furniture, Soft Home, and the Christmas Trim-a-Tree within Seasonal business, remained the well-performing categories.

This Zacks Rank #3 (Hold) company had earlier projected fiscal 2015 earnings in the range of $2.95–$3.00, reflecting an increase of 20-22% over $2.46 per share recorded in fiscal 2014. Big Lots continues to gain strength from its solid comparable-store sales performance, which has been benefitting from the company’s efficient merchandising strategies, and effective marketing and inventory management.

The current Zacks Consensus Estimate for the final quarter and fiscal 2015 stands at $1.98 and $2.96, respectively.

Big Lots’ furniture financing programs as well as the food and consumables categories have been consistently gaining traction. Moreover, the company has been revamping its store organization. Right from the ‘’Dock to Stock’’ initiative, roll-out of the “automated labor scheduling system’’ to intensive training for its personnel – the company is leaving no stone unturned to enhance customers’ shopping experience.

Yesterday, the stock was under pressure, as it touched a 52-week low of $36.33, but recovered sharply to end the day at $36.72, down marginally 0.8%. According to analysts, the overall pressure in the stock market due to global economic woes, especially China, might be weighing upon Big Lots’ performance.

Stocks to Consider

Better-ranked retail stocks that appear promising include Ross Stores Inc. (ROST - Free Report) , The Kroger Co. (KR - Free Report) and Wal-Mart Stores Inc. (WMT - Free Report) , all carrying a Zacks Rank #2 (Buy).         

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