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Big Lots' (BIG) Q3 Earnings in Focus: Things You Should Know

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·5 min read
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Big Lots, Inc. BIG is likely to report both top- and bottom-line decreases when it reports third-quarter fiscal 2021 results on Dec 3, before market open. The Zacks Consensus Estimate for the fiscal third quarter is currently pegged at a loss of 14 cents. The consensus mark for loss has been wider than 13 cents in the past 30 days. The year-ago quarter, however, saw earnings per share of 76 cents.

The consensus mark for quarterly revenues is pegged at $1,321 million, indicating a decline of about 4% from the year-ago quarter’s reported number.

A glimpse of this Columbus, OH-based Big Lots’ performance in the trailing four quarters shows that BIG delivered an earnings surprise of 14.3%, on average.

Key Factors to Note

Big Lots is persistently facing significant sales and margin challenges due to the Asian manufacturing and supply-chain disruption in relation to the pandemic. These coupled with freight headwinds and other inflationary pressures might have hurt BIG’s performance during the to-be-reported quarter.

On its last earnings call, management had projected third-quarter comparable sales (comps) to decline in mid-single digits from the year-ago period’s reported figure, offset by a sales gain of about 150 basis points (bps) from the net new and remodeled stores. For the same quarter, Big Lots estimated a gross margin contraction of nearly 175 bps from the prior-year period’s reported number due to freight headwinds. Also, SG&A expenses are predicted to deleverage from the year-earlier quarter’s level on account of higher investments in labor and forward distribution centers. Management had envisioned a loss per share of 10-20 cents for the fiscal third quarter.

On the flip side, Big Lots’ transformation initiative, including Operation North Star, appears encouraging. BIG has been focusing on enhancing its omni-channel capabilities, including e-commerce business, for a while. Its other strategic efforts like the Lot and Queue Line store endeavors, expansion of the Broyhill brand and pantry optimization continue to be on track.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Big Lots this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Big Lots, Inc. Price and EPS Surprise

Big Lots, Inc. Price and EPS Surprise
Big Lots, Inc. Price and EPS Surprise

Big Lots, Inc. price-eps-surprise | Big Lots, Inc. Quote

Big Lots currently has a Zacks Rank #3 and an Earnings ESP of -11.63%, a combination that makes surprise prediction difficult.

Stocks With Favorable Combination

Here are some companies worth considering as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:

lululemon athletica LULU currently has an Earnings ESP of +1.44% and a Zacks Rank of 2. LULU is expected to register top and bottom-line growth when it reports third-quarter fiscal 2021 numbers. The Zacks Consensus Estimate for LULU’s quarterly revenues is pegged at $1.43 billion, suggesting growth of 28.1% from the prior-year quarter’s reported number.

The Zacks Consensus Estimate for lululemon’s quarterly earnings has moved a penny up in the past 30 days to $1.39 per share, suggesting a 19.8% increase from the year-ago quarter’s reported number. LULU delivered an earnings beat of 25.2%, on average, in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

PVH Corp. PVH currently has an Earnings ESP of +1.61% and a Zacks Rank #2. PVH is expected to register top- and bottom-line growth when it reports third-quarter fiscal 2021 results. The Zacks Consensus Estimate for quarterly earnings of $2.07 per share suggests growth of 56.8% from the year-ago quarter’s reported figure.

The consensus mark for PVH Corp.’s quarterly revenues is pegged at $2.40 billion, indicating an increase of 13.4% from the figure reported in the year-ago quarter. PVH has a trailing four-quarter earnings surprise of 177.5%, on average.

Costco COST currently has an Earnings ESP of +1.00% and a Zacks Rank of 3. COST is likely to register top- and bottom-line growth when it reports first-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings has moved 2.8% north in the past 30 days to $2.59 per share, suggesting an improvement of 13.1% from the year-ago quarter’s tally.

The Zacks Consensus Estimate for Costco's quarterly revenues is pegged at $49.6 billion, implying growth of 14.8% from the figure reported in the prior-year quarter. COST delivered an earnings surprise of 7.7%, on average, in the trailing four quarters.


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Costco Wholesale Corporation (COST) : Free Stock Analysis Report

Big Lots, Inc. (BIG) : Free Stock Analysis Report

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PVH Corp. (PVH) : Free Stock Analysis Report

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