Big Lots Rises on Solid Earnings Beat

By Chris Lange Published Aug 28, 11:20AM EDT

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Big Lots Inc. (NYSE: BIG) reported its fiscal second-quarter financial results before the markets opened on Friday. The company had $0.40 in earnings per share (EPS) on $1.21 in revenue. That compared to consensus estimates from Thomson Reuters that call for $0.34 in EPS on revenue of $1.20 billion. In the same period of the previous year, the discount retailer posted EPS of $0.31 and $1.20 billion in revenue.

Comparable store sales increase of 2.8%, representing the sixth consecutive quarter of comp store sales growth.

The company gave guidance for the fiscal third quarter as a net loss of $0.04 to $0.01 per share. This guidance is based on an estimated comparable store sales increase in the 2% to 3% range, compared to a 1.4% comparable store sales increase in the third quarter of fiscal 2014. Operating profit improvement is expected to be driven by higher sales, a flat gross margin rate and a lower expense rate. Consensus estimates are $0.00 per share and $1.12 billion in revenue.

Previously the board of directors approved a share repurchase program up to $200 million in common stock. However, this was exhausted in the fiscal second quarter. Separately, the board approved a quarterly cash dividend of $0.19 per common share that will be payable on September 25 for shareholders on record as of the close of business on September 11.

David Campisi, CEO and president of Big Lots, commented on earnings:

I’m pleased with our second quarter results. Despite unseasonable weather conditions, Q2 comps increased 2.8% reflecting strength in our winnable and ownable categories and improved consistency in all aspects of our operations. Jennifer continues to respond positively to our strategic improvements in merchandising, marketing, and in-store execution resulting in our sixth consecutive quarter of comp sales growth. Healthy comp sales growth and consistent execution across the business enabled us to exceed earnings expectations for Q2.

On the books, cash and cash equivalents totaled $57.36 million, compared to $62.03 million at the end of the previous fiscal year.

Shares of Big Lots were up 14.7% at $48.20 late Friday morning. The stock has a consensus analyst price target of $54.83 and a 52-week trading range of $38.15 to $51.75.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.