Big Lots’ 4Q Profit Beats Analysts’ Estimates As Comparable Sales Rise; Shares Gain 2%

Big Lots’ shares increased almost 2.2% on March 5 as the retail company’s fiscal fourth-quarter profit surpassed analysts’ expectations. The 7.9% increase in comparable sales was the primary driver.

Big Lots’ (BIG) 4Q adjusted earnings advanced 8.4% to $2.59 per share on a year-over-year basis and beat the Street estimates of $2.50 per share. Net sales increased 8.1% to $1.74 billion and met analysts’ expectations.

The company’s gross margin was $685.2 million in the quarter, up 8.1% year-over-year. Selling and administrative expenses came in at $520.6 million, up 10.5%.

Big Lots CEO Bruce Thorn commented, “During 2021, we will continue the roll-out of our Lot and Queue Line programs to the balance of our stores, expand our offerings under the Broyhill brand, further scale our greatly enhanced ecommerce capabilities, and accelerate new store openings.”

For the fiscal first-quarter 2021, the company expects EPS to be in the range of $1.30 to $1.45, versus the consensus estimate of $1.33. Comparable sales are anticipated to increase by low-single-digits. (See Big Lots stock analysis on TipRanks)

On Jan. 28, Loop Capital Markets analyst Anthony Chukumba downgraded the stock to Hold from Buy and maintained a price target of $60 (3.3% downside potential). The analyst said, “The rating change is driven by the stock’s valuation rather than a more bearish view of the company’s fundamentals.”

The rest of the Street is sidelined on the stock with a Hold consensus rating based on 1 Buy, 4 Holds, and 1 Sell. The average analyst price target of $57 implies around 8% downside potential to current levels. Shares have increased 43.2% over the past six months.

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