Analyzing Big Lots’ Revenue and Income Growth in Fiscal 3Q15
Big Lots Reported Solid Revenue and Income Growth in Fiscal 3Q15
Big Lots’ price movement
Big Lots (BIG) has a market cap of $2.0 billion. Its YTD (year-to-date) price movement was a mix of rises and falls in fiscal 2015. After the fiscal 3Q15 earnings report, Big Lots fell by 6.3% to close at $40.04 per share as of December 4, 2015. The price movement on a weekly, monthly, and YTD basis is -15.5%, -15.2%, and 1.3%, respectively.
Technically, the stock has broken the support. It’s trading below all of the moving day averages. Currently, Big Lots is trading 11.6% below its 20-day moving average, 14.6% below its 50-day moving average, and 13.1% below its 200-day moving average.
The First Trust Mid Cap Growth AlphaDex ETF (FNY) invests 1.0% of its holdings in Big Lots. FNY tracks a tiered and equal-weighted index of mid-cap growth stocks selected by Standard & Poor’s AlphaDex selection methodology from the S&P 400 Index. FNY’s YTD price movement is -0.47% as of December 3, 2015. The SPDR S&P Retail ETF (XRT) invests 1.0% of its holdings in Big Lots. The iShares Morningstar Small Value ETF (JKL) invests 0.48% of its holdings in Big Lots.
Big Lots’ competitors and their market caps are:
Target (TGT) – $45.5 billion
Dollar General (DG) – $20.1 billion
Five Below (FIVE) – $1.6 billion
Big Lots’ performance in fiscal 3Q15
Big Lots reported fiscal 3Q15 net sales of $1,116.5 million—a rise of 0.84% compared to its net sales of $1,107.1 million in fiscal 3Q14. The company’s gross profit margin and operating income rose by 1.3% and 46.8%, respectively, in fiscal 3Q15 compared to the same period the previous year.
Its net income and EPS (earnings per share) rose to -$1.5 million and -$0.03, respectively, in fiscal 3Q15—compared to its net income and EPS of -$3.4 million and -$0.06, respectively, in fiscal 3Q14. It reported non-GAAP (generally accepted accounting principles) EPS of -$0.01 in fiscal 3Q15.
Meanwhile, the cash and cash equivalents and inventories rose by 7.1% and 27.5%, respectively, in fiscal 3Q15 on a quarterly basis. The company’s current ratio and DE (debt-to-equity) ratio rose to 1.73 and 2.0, respectively, in fiscal 3Q15—compared to a current ratio and a DE ratio of 1.72 and 1.6, respectively, in fiscal 3Q14.
Big Lots declared a quarterly cash dividend of $0.19 per share on its common stock.
According to David Campisi, Big Lots’ president and CEO, “For the seventh consecutive quarter, our sales comps were positive with notable strength in our ownable and winnable merchandise categories and we delivered upon our financial commitments. Our inventory levels were lean and on the forecast to end Q3 and we are well-positioned by merchandise category for the all-important Q4 selling season.”
Projections
The company made the following projections for fiscal 4Q15 and fiscal 2015:
non-GAAP EPS of $2.95–$3.00 and $1.95–$2.00 for fiscal 2015 and fiscal 4Q15
cash flow of $175.0 million for fiscal 2015
It expects its operating profit to improve with the rise in sales, a flat gross margin rate, and a lower adjusted expense rate.
About Big Lots
Big Lots offers brand-name closeouts and bargains to its customers. It provides a wide range of merchandise including consumables, seasonal products, furniture, housewares, toys, and gifts.
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