Big Lots, Inc. (NYSE: BIG)
Earnings Report
Before the market opened on Friday, Big Lots Inc (BIG) posted strong second quarter earnings, beating analyst estimates and sending the stock soaring. BIG posted earnings of 40 cents per share on $1.21 billion in revenue, an increase of 1.2%, beating analyst expectations polled from Thomson Reuters of 36 cents on $1.2 billion in revenue. The company also approved a quarterly cash dividend of 19 cents per common share payable on September 25 for shareholders on record as of September 11. As a result of strong earnings, BIG is raising guidance for the remainder of the year and now expects to earn $2.90-3 this year, raised from an earlier range of $2.80-2.90. According to FactSet, analysts have predicted earnings of $2.86 per share and a 2.2% same-store sales growth this year.
David Campisi, CEO and President of BIG had this to say in the earnings call,
“I am pleased with our second quarter results. Despite unseasonable weather conditions, Q2 comps increase 2.8%, which is on top of a 1.7% increase for the same period last year. This represents the sixth consecutive quarter of comp store sales growth, something BIG hasn’t accomplished since 2006 and 2007 . . .Healthy comps and consistence execution across all aspects of our business enabled us to exceed earnings expectations for Q2.” BigLots
This is a great earnings beat for the company and has given investors plenty of reasons to buy shares or hold the ones they have. Increased demand accompanied with great leadership and excellent execution of strategic business initiatives is a recipe for success. Lets see how well BIG can maintain this stellar performance throughout the remainder of the year.
BIG Technicals
BIG started off the year great with a strong move to a 2015 high of $51.11 before losing steam and giving up almost all of the year’s gains until this earnings report. In the premarket session, shares gapped up to $45 and continued to climb into the market opening with shares prices at $46.69. Shares did a bit of back and forth for the first half hour but eventually were able to break free and continue on a nice little up trend. Shares spent most the day between the $48-49 price range and ended up closing at $48.58. This was huge for the stock price of BIG as it put the share price back above the 200d moving average on strong volume and broke it out of the downtrend it’s been in since March. With a closing price of $48.58, it blew past yesterdays close of $42.00 adding a 15.5% increase to share prices. I am watching for support in the $48 and $46 price levels with resistance coming in on the big $50 level. For this chart to stay bullish I would like to see it maintain prices above the 200d moving average, currently sitting at $43.90 as of the close on Friday, and get that 50d moving average back above it as well.
Company Profile
Big Lots, Inc. operates broad line closeout retail stores. It sells a broad range of quality, brand-name products, including consumables, seasonal items, furniture, housewares, toys, electronics, home decor, tools and gifts. The company operates under following merchandise categories which include Food, Consumables, Soft Home, Hard Home, Furniture & Home Decor, Seasonal, and Electronics & Accessories.. The Food category includes the food and specialty food departments. The Consumables category includes the health and beauty, plastics, paper, chemical, and pet departments. The Soft Home category includes the fashion bedding, utility bedding, bath, window, decorative textile, and flooring departments. The Hard Home category includes small appliances, table top, food preparation, stationery, greeting cards, tools, paint, and home maintenance departments. The Furniture & Home Decor category includes upholstery, mattress, ready-to-assemble, case goods, home decor, and frames departments. The Seasonal category includes lawn and garden, summer, Christmas, toys, books, sporting goods, and other holiday departments. The Electronics & Accessories category includes the electronics, jewelry, apparel, hosiery, and infant accessories departments. Big Lots was founded by Sol A. Shenk in 1967 and is headquartered in Columbus, OH. MarketWatch
