Big Lots, Inc. BIG appears to be worth retaining in your portfolio, given its impressive strategic initiatives, including the Operation North Star plan. The company is banking upon this initiative to drive top-line growth, control cost, and enhance systems and infrastructure. Its constant omni-channel efforts to boost customers’ experience also bode well.

Going forward, Big Lots is poised to maneuver the COVID-19 related challenges through its robust customer service coupled with everyday essentials and stay-at-home products. We believe that these endeavors will continue aiding this Zacks Rank #3 (Hold) stock.

Let’s Dive Deeper

Big Lots is gaining from the Operation North Star initiative, which focuses on streamlining the cost structure and core enablers with significant capabilities and tools in several areas of business. Management remains focused on improving performance by enhancing digital capabilities and expansion of the Broyhill brand. The company has been updating Broyhill fall and holiday assortments to house products including area rugs, bed sheets and decorative pillows. It is also encouraged about the brand’s extension into housewares and kitchen textiles. The brand is projected to generate around $400 million sales in its first year, with potential to become a $1-billion brand in the future.

Big Lots also completed the rollout of its pantry-optimization initiative. The company is also focused on enhancing the omni-channel experience, removing friction and increasing customer base. It has launched same-day delivery through Instacart. It has also integrated web and store capabilities to drive enhanced returns, pricing, consistency and order visibility.

BIG LOTS Income Statement, Balance Sheet and Statement of Cash Flows. BIG LOTS Key Stats, charts, historical data, comparisons and more at Zacks Advisor Tools. A share lot is a group of shares in a particular company you bought at the same time. Tell your broker if you want to sell shares from particular lots for tax reasons. You will pay tax based on.

During third-quarter fiscal 2020, the overall e-commerce and omni-channel demand surged 70% year over year, contributing nearly 170 basis points to total comparable sales (comps). Convenient delivery options, coupled with new digital customer acquisition, are fueling growth. Coming to the Rewards program, the net promoter scores, active membership and new customer acquisition have been robust. The Rewards enrollment has been increasing with active membership reaching 21 million. Notably, rewards customers spent 28% more in comparison to the year-ago period.

During these tough times, Big Lots remain committed to boosting its shareholders’ returns. In fact, it looks well placed on the dividend payout front. We note that the company has a current annualized dividend rate of $1.20 a share, flat year over year. It has a dividend payout of 16.8%, dividend yield of 2.6% and free cash flow yield of 19.4%. With an annual free cash flow return on investment of 37.6%, the dividend payment is likely to be sustainable. In fiscal third quarter, management bought back 2.2 million shares worth $100 million under its earlier announced $500 million share repurchase program. It will also pay fourth-quarter dividends of roughly $11 million on Dec 30, 2020.

The aforesaid efforts aided the company to deliver a stellar third-quarter fiscal 2020 results. While increased sales fueled the bottom line, higher comparable sales and sales from new and relocated non-comp stores drove the top line. Comps grew 17.8% in the reported quarter on a slight rise in store traffic, e-commerce traffic growth of more than 50% and robust increase in basket at both channels.

Challenges

Big Lots is grappling with selling and administrative expenses for a while. Last quarter, it witnessed additional expense from the sale and leaseback of distribution centers, additional store and corporate bonus cost and increased non-cash stock compensation expense, and pandemic-related costs, which raised the overall expenses. These factors are likely to persist in the fiscal fourth quarter.

Nonetheless, Big Lots is progressing with cost-reduction effort. Impressively, shares of the Columbus, OH-based company have surged 73.1% in the past year and outperformed the industry’s 23.4% rally. Meanwhile, the Zacks Retail-Wholesale sector and S&P 500 Index have grown 40.7% and 18.3%, respectively.

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Analysts expect that Big Lots, Inc. (NYSE:BIG) will post earnings of $3.02 per share for the current fiscal quarter, according to Zacks. Five analysts have provided estimates for Big Lots’ earnings, with the lowest EPS estimate coming in at $2.75 and the highest estimate coming in at $3.19. Big Lots reported earnings of $2.39 per share during the same quarter last year, which would suggest a positive year-over-year growth rate of 26.4%. The firm is scheduled to issue its next quarterly earnings report on Thursday, February 25th.

Big Lots Stock Zacks Price

On average, analysts expect that Big Lots will report full-year earnings of $7.78 per share for the current financial year, with EPS estimates ranging from $7.53 to $7.95. For the next fiscal year, analysts expect that the company will post earnings of $5.90 per share, with EPS estimates ranging from $4.64 to $6.55. Zacks’ EPS averages are an average based on a survey of sell-side research analysts that follow Big Lots.

Big Lots (NYSE:BIG) last announced its earnings results on Thursday, December 3rd. The company reported $0.76 earnings per share for the quarter, beating the consensus estimate of $0.66 by $0.10. The firm had revenue of $1.38 billion for the quarter, compared to the consensus estimate of $1.35 billion. Big Lots had a return on equity of 25.78% and a net margin of 12.32%. The firm’s revenue for the quarter was up 18.0% on a year-over-year basis. During the same quarter in the previous year, the business earned ($0.18) EPS.

Several analysts have weighed in on BIG shares. Deutsche Bank Aktiengesellschaft cut their target price on Big Lots from $56.00 to $53.00 and set a “hold” rating on the stock in a research note on Monday. Barclays boosted their price objective on Big Lots from $34.00 to $50.00 and gave the stock an “equal weight” rating in a research note on Monday, August 31st. Wolfe Research began coverage on Big Lots in a research note on Friday, October 9th. They issued an “outperform” rating and a $61.00 price objective on the stock. Telsey Advisory Group reissued an “outperform” rating and issued a $73.00 price objective on shares of Big Lots in a research note on Friday, December 4th. Finally, Loop Capital boosted their price objective on Big Lots from $60.00 to $65.00 and gave the stock a “buy” rating in a research note on Friday, October 16th. They noted that the move was a valuation call. One investment analyst has rated the stock with a sell rating, five have given a hold rating and five have issued a buy rating to the company. Big Lots currently has a consensus rating of “Hold” and an average target price of $53.33.

Several hedge funds and other institutional investors have recently modified their holdings of the stock. Ancora Advisors LLC grew its holdings in shares of Big Lots by 5.7% in the 2nd quarter. Ancora Advisors LLC now owns 2,611,775 shares of the company’s stock worth $109,695,000 after acquiring an additional 139,932 shares during the last quarter. FMR LLC grew its holdings in shares of Big Lots by 11.8% during the second quarter. FMR LLC now owns 2,102,015 shares of the company’s stock valued at $88,284,000 after buying an additional 222,534 shares in the last quarter. Goldman Sachs Group Inc. grew its holdings in shares of Big Lots by 91.7% during the second quarter. Goldman Sachs Group Inc. now owns 821,899 shares of the company’s stock valued at $34,520,000 after buying an additional 393,101 shares in the last quarter. Bank of New York Mellon Corp grew its holdings in shares of Big Lots by 1.0% during the second quarter. Bank of New York Mellon Corp now owns 728,883 shares of the company’s stock valued at $30,612,000 after buying an additional 7,221 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership grew its holdings in shares of Big Lots by 1.6% during the third quarter. Arrowstreet Capital Limited Partnership now owns 499,214 shares of the company’s stock valued at $22,265,000 after buying an additional 7,805 shares in the last quarter. Institutional investors and hedge funds own 95.38% of the company’s stock.

Shares of Big Lots stock opened at $46.51 on Tuesday. The business’s fifty day moving average price is $49.56 and its two-hundred day moving average price is $44.90. The company has a debt-to-equity ratio of 0.03, a current ratio of 1.58 and a quick ratio of 0.91. The company has a market capitalization of $1.83 billion, a P/E ratio of 2.96, a PEG ratio of 0.73 and a beta of 2.46. Big Lots has a 1-year low of $10.13 and a 1-year high of $57.24.

The business also recently announced a quarterly dividend, which will be paid on Wednesday, December 30th. Investors of record on Wednesday, December 16th will be issued a $0.30 dividend. This represents a $1.20 dividend on an annualized basis and a dividend yield of 2.58%. The ex-dividend date of this dividend is Tuesday, December 15th. Big Lots’s payout ratio is 32.70%.

Big Lots Company Profile

Big Lots, Inc, through its subsidiaries, operates as a retailer in the United States. The company offers products under various merchandising categories, such as furniture category that includes upholstery, mattress, case goods, and ready-to-assemble departments; seasonal category, which comprises Christmas trim, lawn and garden, summer, and other holiday departments; soft home category that consists of fashion and utility bedding, bath, window, decorative textile, home organization, area rugs, home décor, and frames departments; and food category that includes beverage and grocery, candy and snacks, and specialty foods departments.

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