NEW YORK (AP) -- An analyst downgraded her rating on Big Lots on Wednesday, wary of a drop in a key revenue metric even though the discount store operator's fourth-quarter earnings topped analysts' expectations.
Laura Champine of Canaccord Genuity lowered Big Lots Inc. to "Hold" from "Buy." In a client note, the analyst said that the company's revenue at stores open at least a year has continued to decline in part because it has not improved its product assortment at the rate anticipated.
During the quarter Big Lots reported a 3.5 percent drop in revenue at U.S. stores open at least 15 months.
Champine said the figure has now declined for four quarters.
"We believe the near-term picture is too cloudy to warrant a Buy rating," she wrote.
Champine did raise Big Lots' price target slightly to $39 from $38. however.
The downgrade did not seem to rattle investors though, with the Columbus, Ohio company's stock up more than 4 percent in afternoon trading.
Big Lots' fourth-quarter earnings of $2.09 per share topped the $1.99 per share that analysts polled by FactSet expected. Revenue rose 5 percent to $1.75 billion.
The company's shares gained $1.74, or 5.1 percent, to $35.63 in afternoon trading. Over the past year, the stock has traded between $26.69 in mid-November and $47.22 last March.