Big Lots jumps 15% in the stock market on a stronger than expected earnings report

Big Lots jumps 15% in the stock market on a stronger than expected earnings report
  • Big Lots tops analysts' estimates for sales and earnings in the first quarter.
  • The U.S discount retailer posts a 10.3% increase in same-store sales in Q1.
  • The American retail company gives hawkish guidance for earnings in Q2.

Big Lots Inc. (NYSE: BIG) released its quarterly earnings report on Friday that topped experts’ forecast for profit by a significant margin in the first quarter. The company also gave hawkish Q2 guidance for earnings as the Coronavirus pandemic pushes its comparable-store sales up.

Shares of the company were reported 15% up in premarket trading on Friday. At £31.15 per share, Big Lots is currently 35% up year to date in the stock market after recovering from £8.61 per share in mid-March. In comparison, the benchmark S&P 500 index has gained only 2.6% in 2020. Learn more about different stock exchanges and stock indices.

Big Lot’s chief operating officer to step down in September

In separate news, Big Lots’ COO and CMO Lisa Bachmann will be stepping down on 4th September.   

The U.S discount retailer said its net income came in at £39.89 million in the quarter that ended on 2nd May that translates to £1.02 per share. In the same quarter last year, its net income was recorded at £12.54 million or 31.5 pence per share. According to FactSet, experts had forecast the company to make 32.37 pence of earnings per share in the recent quarter.

At £1.17 billion, the American Retail Company printed an 11.1% growth in sales in Q1 that topped the analysts’ estimate for £1.07 billion. The most substantial improvement was seen in Big Lots’ same-store sales that climbed by 10.3% in the first quarter versus a much lower 1.0% growth that experts had anticipated.

According to the retailer, its comparable-store sales are strong to date in the second quarter. The upbeat trend, it added, began in mid-April. In the rest of Q2, however, Big Lots’ same-store sales are likely to moderate.  

Big Lots’ earnings guidance for the fiscal second quarter

For the second quarter, the American discount retailer said that it now expected to make 52.6 pence to 64.7 pence of earnings per share. FactSet analysts, on the other hand, are expecting 19.4 pence of earnings per share in Q2.

In a statement on Friday, Big Lots also declared a 24.3 pence per share of regular quarterly dividend. The dividend is payable on 26th June.  

Big Lot’s performance in the stock market remained flat on average in 2019. The Columbus-headquartered company is currently more than 40% down as compared to its record high of £51.50 per share in January 2018. The stock has recovered more than 200% in the past 3 months.

At the time of writing, Big Lots has a market cap of £1.17 billion and a price to earnings ratio of 5.95.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.