What happened

Shares of Big Lots (NYSE:BIG) were moving higher on better-than-expected earnings reports from its peers and as strong Black Friday sales drove brick-and-mortar retail stocks up across the board. Investors were also anticipating the discount retailer's earnings report, which came out on Dec. 1.

The entrance to a Big Lots store

Image source: Big Lots.

According to data from S&P Global Market Intelligence, the stock finished up 15.2%. As the chart below shows, it surged toward the end of the month as Black Friday weekend reports came out.

BIG Chart

BIG data by YCharts.

So what 

Big Lots shares rose 9% over the four trading days following Black Friday as retail stocks climbed broadly. Data from Wells Fargo showed that Black Friday traffic had the slowest decline since 2013 and there were fewer markdowns than in previous years. Though traffic on Thanksgiving and Black Friday tumbled 1.6%, online sales were up 18%, a sign that retailers are successfully transitioning to e-commerce. The National Retail Federation also said 174 million people went shopping over the holiday weekend, better than expectations of 164 million people.

Now what 

Big Lots' stock fell 1.5% on its third-quarter earnings report on Dec. 1 even as the company reported better-than-expected earnings. Adjusted earnings per share increased from $0.04 to $0.06, beating estimates by a penny.  Comparable sales increased 1% as overall revenue inched up $1.11 billion, which missed expectations at $1.12 billion. The company also raised its adjusted EPS guidance for the fourth quarter from $2.30-$2.38 to $2.35-$2.40, above last year's figure of $2.26, a positive sign heading into the holiday season. 

Though the stock dipped modestly after its earnings report was posted, that may be more of a reflection of the run-up prior to the report rather than dissatisfaction with it. With adjusted EPS expected to grow 16%-18% this year, Big Lots is one of the few brick-and-mortar retailers that remain in good shape.

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