Big Lots Reaffirms Guidance, Impact Of Irma & Harvey Minor

Big Lots, Inc. (NYSE:BIG) reiterated third quarter and fiscal 2017 guidance. The company continues to expect earnings per share in the range of $4.15-$4.25, which it raised after the second-quarter results. This represents growth of 14-17% over $3.64 per share recorded in fiscal 2016. For the third quarter, earnings per share are forecasted in the range of 1-5 cents compared with 4 cents earned in the prior-year quarter. Comps are anticipated to be up in the low-single digit.

The company stated that ownable and winnable merchandise strategy continues to drive company’s performance. Further, management announced that hurricane Irma and Harvey had minor impact on two of its stores, which remains shut due to repairs.

Big Lots’ furniture financing programs has been consistently gaining traction. Furniture, which has been the leading performer in the last few quarters, increased in mid-single digits during the second quarter. The company is very optimistic about the performance of furniture in fiscal 2017.

Stock Performance

Though, the Zacks Rank #3 (Hold) company’s shares have underperformed the industry in the past three quarters, the trend might reverse in the near term due to positive earnings streak. The stock has witnessed an increase of 4.7%, compared with the industry’s gain of 5.5%.

The retail landscape has been undergoing a fundamental change in recent years, with technology leaving a deep and lasting impact on the space. Today, online shopping dominates the minds of consumers. This shift in buying behavior has forced retailers to come up with new ways to market their products. This makes change the need of the hour, and retailers and manufacturers who have responded quickly to it by staying technologically ahead stand in good stead.

There is no doubt that Big Lots is also expanding e-commerce presence but at a slower rate and still in “crawl mode”. In fiscal 2016, the company reported net sales from e-commerce of nearly $13 million.

3 Retail Stocks Hogging the Limelight

Better-ranked stocks, which warrant a look in the retail sector includes, Costco Wholesale Corporation (NASDAQ:COST) , Tilly's, Inc. (NYSE:TLYS) and Burlington Stores, Inc. (NYSE:BURL) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Costco Wholesale has an impressive long-term earnings growth rate of 9.5%.

Tilly's delivered an average positive earnings surprise of 83.7% in the trailing four quarters.

Burlington Stores delivered an average positive earnings surprise of 17.7% in the trailing three quarters and has a long-term earnings growth rate of 16.2%.

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