Big Lots Inc. (NYSE:BIG) , whose shares have gained nearly 33% year to date, is expected to continue the uptrend in the coming days. Big Lots’ impressive earnings surprise history, strong comparable-store sales growth over 10 straight quarters and an encouraging earnings outlook for fiscal 2016 clearly suggest that the company’s strategic endeavors are on track to drive the momentum.
The company’s earnings have surpassed the Zacks Consensus Estimate in six out of the past seven quarters. In the second quarter of fiscal 2016, the company reported adjusted earnings per share of 52 cents that beat the Zacks Consensus Estimate of 45 cents and increased 26.8% year over year.
Big Lots’ furniture financing programs as well as its food and consumables categories have been consistently gaining traction. Response has been particularly impressive for furniture financing. The category, which had been the leading performer in both fourth-quarter fiscal 2015 and first-quarter fiscal 2016, registered high-single digit growth in the second quarter of fiscal 2016, driven by higher demand for mattresses, upholstery and case goods.
This Zacks Rank #2 (Buy) company also registered comps growth for the 10th consecutive quarter. Comps for the second quarter of fiscal 2016 grew 0.3%, after rising 3%, 0.7%, 2.6%, 2.8%, 1.6%, 2.9%, 1.4%, 1.7% and 0.9% in the nine previous quarters. The company’s merchandising strategies and effective marketing seem to be paying off quite well. In fiscal 2016, comps are expected to increase in the range of 1% to 2%. For both the third and fourth fiscal quarters, the company expects comps to be in the range of flat to up 2%.
Other Stocks to Consider
Other stocks worth considering in the retail sector include Burlington Stores, Inc. (NYSE:BURL) , Citi Trends, Inc. (NASDAQ:CTRN) and Costco Wholesale Corporation (NASDAQ:COST) . All these stocks hold the same rank as Big Lots.
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