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Big Lots' (BIG) Q2 Earnings in Focus: Things You Should Know
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Big Lots, Inc. (BIG - Free Report) is likely to report both top- and bottom-line decreases when it reports second-quarter fiscal 2021 results on Aug 27, before market open. Although the Zacks Consensus Estimate for second-quarter earnings per share has increased 7.6% in the past 30 days to $1.13, the estimate suggests a plunge of more than 58% from the year-earlier quarter’s tally.
The consensus mark for quarterly revenues is pegged at $1,470 million, indicating a decline of about 10% from the year-ago quarter’s number.
A glimpse of this Columbus, OH-based company’s performance in the trailing four quarters shows that it delivered an earnings surprise of 15.5%, on average.
Key Factors to Note
Big Lots is likely to have faced tough year-over-year comparisons in sales as COVID-19 benefits are lapped. The company has also been witnessing higher expenses including SG&A for a while now. Elevated freight costs and supply-chain disruptions might have hurt the company’s performance.
On the company’s last earnings call on May 28, management had projected second-quarter comparable sales (comps) to decline in low double digits year over year on tough comparisons, offset by a sales gain of about 150 basis points (bps) from net new and remodeled stores. For the same quarter, it estimated a gross margin contraction of nearly 200 bps from last year’s reported number on macro headwinds in freight and certain mix impact from pantry optimization.
For the fiscal second quarter, Big Lots had forecast SG&A deleverage. Higher expenses with respect to the sale and leaseback of the company’s distribution centers, investments in the new forward deployment centers plus other strategic investments and increased equity compensation expense might have escalated its costs. Consequently, management had then envisioned earnings per share of $1.00-$1.15 for the quarter to be reported.
On the flip side, Big Lots’ transformation initiative including Operation North Star appears encouraging. The company is also firmly focused on enhancing its omni-channel capabilities including e-commerce. Its other strategic efforts like the Lot and Queue Line store endeavors, expansion of the Broyhill brand and pantry optimization have been on track as well for sometime. All these factors might have provided some cushion to its quarterly performance.
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 currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -2.94%, a combination that makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
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Big Lots' (BIG) Q2 Earnings in Focus: Things You Should Know
Big Lots, Inc. (BIG - Free Report) is likely to report both top- and bottom-line decreases when it reports second-quarter fiscal 2021 results on Aug 27, before market open. Although the Zacks Consensus Estimate for second-quarter earnings per share has increased 7.6% in the past 30 days to $1.13, the estimate suggests a plunge of more than 58% from the year-earlier quarter’s tally.
The consensus mark for quarterly revenues is pegged at $1,470 million, indicating a decline of about 10% from the year-ago quarter’s number.
A glimpse of this Columbus, OH-based company’s performance in the trailing four quarters shows that it delivered an earnings surprise of 15.5%, on average.
Key Factors to Note
Big Lots is likely to have faced tough year-over-year comparisons in sales as COVID-19 benefits are lapped. The company has also been witnessing higher expenses including SG&A for a while now. Elevated freight costs and supply-chain disruptions might have hurt the company’s performance.
On the company’s last earnings call on May 28, management had projected second-quarter comparable sales (comps) to decline in low double digits year over year on tough comparisons, offset by a sales gain of about 150 basis points (bps) from net new and remodeled stores. For the same quarter, it estimated a gross margin contraction of nearly 200 bps from last year’s reported number on macro headwinds in freight and certain mix impact from pantry optimization.
For the fiscal second quarter, Big Lots had forecast SG&A deleverage. Higher expenses with respect to the sale and leaseback of the company’s distribution centers, investments in the new forward deployment centers plus other strategic investments and increased equity compensation expense might have escalated its costs. Consequently, management had then envisioned earnings per share of $1.00-$1.15 for the quarter to be reported.
On the flip side, Big Lots’ transformation initiative including Operation North Star appears encouraging. The company is also firmly focused on enhancing its omni-channel capabilities including e-commerce. Its other strategic efforts like the Lot and Queue Line store endeavors, expansion of the Broyhill brand and pantry optimization have been on track as well for sometime. All these factors might have provided some cushion to its quarterly performance.
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-eps-surprise | Big Lots, Inc. Quote
Big Lots currently has a Zacks Rank #4 (Sell) and an Earnings ESP of -2.94%, a combination that makes surprise prediction difficult.
Stocks With Favorable Combination
Here are some companies you may want to consider as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Burlington Stores (BURL - Free Report) currently has an Earnings ESP of +12.69% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Abercrombie (ANF - Free Report) presently has an Earnings ESP of +4.93% and is Zacks #1 Ranked.
Costco (COST - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #3 at present.