Why Shares of Big Lots, Inc. Jumped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Big Lots,  (NYSE: BIG  ) were up as much as 15% today on a strong first-quarter earnings report. 

So what: The closeout retailer said earnings from continuing operations came in at $0.50, beating estimates at $0.44 as the company recently closed down its Canadian stores and exited its wholesale business. Revenue increased just 1.1% to $1.28 billion on a 0.9% comparable sales growth. Still, that was better than expectations of $1.26 billion. Gross margin slipped 110 basis points in the quarter, forcing profits lower as costs outgrew sales. 

Now what: Looking ahead, management lifted full-year EPS guidance to $2.35-$2.50 from a previous range of $2.25-$2.45, and against the consensus at $2.38. Comparable sales growth was also forecast at 1-2%, which should help profitability improve. Shares seemed to spike not only on the raised guidance, but also on signs that the company made the right decisions in shutting down the Canadian and wholesale businesses. For a company still in transition and absorbing the costs from shutting down those operations, its P/E near 20 seems pricey, but after today's report Big Lots is clearly moving in the right direction.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.


Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2977821, ~/Articles/ArticleHandler.aspx, 9/4/2015 5:01:41 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

Today's Market

updated Moments ago Sponsored by:
DOW 16,102.38 -272.38 -1.66%
S&P 500 1,921.22 -29.91 -1.53%
NASD 4,683.92 -49.58 -1.05%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 4:00 PM
BIG $45.91 Down -0.52 -1.12%
Big Lots CAPS Rating: ***