Big Lots downgraded
The struggling consumables category and declining comparable-store sales are taking a toll on the retailer.
By Zacks Equity Research
Zacks Investment Research downgraded Big Lots (BIG) last week to a Zacks Rank No. 5 ("strong sell").
Why the downgrade?
Muted top-line performance on account of the struggling consumables category and waning domestic comparable-store sales is taking a toll on Big Lots' profitability. The company took a conservative stance on its future sales and earnings outlook following the disappointing first-quarter fiscal 2013 results.
This broad-line closeout retailer in the U.S. reported its results on May 30, with earnings, including U.S. and Canadian operations, coming in at 61 cents a share. This met the Zacks Consensus Estimate, but dipped 10.3% from 68 cents earned in the prior-year quarter.
Big Lots now projects fiscal 2013 earnings between $2.87 and $3.12 per share down from a range of $3.05 to $3.25 forecasted earlier. Net sales are expected to increase in the range of 1% to 2%, down from the growth range of 2% to 3%.
Consequently, the company has been witnessing sharp downward estimate revisions. The Zacks Consensus Estimate for fiscal 2013 fell by 6.3% to $2.95 over the past 30 days, while for fiscal 2014 it tumbled 4.1% to $3.29 per share, over the same time frame.
Moreover, the Zacks Consensus Estimate for the second quarter of fiscal 2013 plunged 41.9% to 25 cents over the past 30 days but remained unchanged for the third quarter, portraying a loss of 2 cents.
Other stocks to consider
However, not all stocks in the retail/wholesale sector are as disappointing. Others worth considering include Flowers Foods (FLO) and Bon-Ton Stores (BONT), both of which hold a Zacks Rank No.1 ("strong buy"). Fred's (FRED), which carries a Zacks Rank No. 2 ("buy"), is also worth considering.
More from Zacks
- BIG LOTS INC (BIG): Free Stock Analysis Report
- BON-TON STORES (BONT): Get Free Report
- FLOWERS FOODS (FLO): Free Stock Analysis Report
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.