Best stocks to invest in – Big Lots Stock (BIG) Closed 14% Due to Promising Earnings



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Shares of Big Lots (BIG) performed well during Friday trading hours due to a promising first quarter of fiscal 2016. The Ohio-based discounted merchandise company reported income from continuing operations of $38.6 million, or $0.79 per diluted share. This result includes an after tax expense of $1.3 million, or $0.03per diluted share, associated with legacy pension plans which have been terminated.

Excluding this expense, adjusted income from continuing operations totaled $39.9 million, or $0.82 per diluted share (non-GAAP), which compares to our guidance of adjusted income from continuing operations of $0.66 to $0.72 per diluted share (non-GAAP). 

Big Lots’ net sales for the first quarter increased 2.5% to $1.3 billion, as the company’s comparable store sales increase was partially offset by a lower store count compared to last year.

The company also revised its guidance for both the second quarter of fiscal 2016 and the entire fiscal 2016. For the second quarter Big Lots estimate adjusted income from continuing operations will be in the range of $0.42 to $0.47 per diluted share (non-GAAP), compared to adjusted income from continuing operations of $0.41 per diluted share (non-GAAP) for the second quarter of fiscal 2015.

This guidance is based on an estimated comparable store sales in the range of flattish to an increase of 2% compared to a 2.8% comparable store sales increase in Q2 of fiscal 2015.


Based on the actual results for the first quarter and the guidance provided for the second quarter, Big lots updated its guidance for the full year of fiscal 2016. The company changed its estimate fiscal 2016 adjusted income from continuing operations from $3.20 to $3.35 per diluted share (non-GAAP) to $3.35 to $3.50 per diluted share (non-GAAP).

This compares to adjusted income from continuing operations of $3.01 per diluted share (non-GAAP) for fiscal 2015. This outlook is based on a comparable store sales increase in the low single digit range and total sales up slightly. Big Lots’ believes that this financial performance will result in cash flow of approximately $200 million.

Big Lots has a Zacks Rank #3 (Hold) and officially closed on the day at 14.02%.

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