Essential merchandise retailer Big Lots, Inc. BIG reported positive quarter-to-date comparable sales (comps) for first-quarter fiscal 2020, defying coronavirus woes. Also, comps were positive so far in April despite the cancellation of the "Friends and Family" event and closure of all stores on Easter day. Notably, sales accelerated strongly in the past two weeks, leading to this upside. Also, it continued to outpace its sales expectations. Management has also been extending the $2-hourly raise for the hourly store and DC staff through May, as well as extending a 30% associate discount. As a result, shares of the company jumped more than 11% during the trading session on Apr 27.
Being a provider of essential goods, Big Lots’ stores remain open to serve the community amid such unprecedented times. Meanwhile, it has added more safety protocols, including daily health screenings for its associates and increased availability of gloves and masks, mainly in high-risk areas. Also, the company is installing protective shields between customers and cashiers at checkout stands and limiting store occupancy depending on the size of the outlet. Also, it has been encouraging early-hour shopping for seniors and other vulnerable citizens. Furthermore, the company rolled out a commercial with the title ‘Big Responsibility’, emphasizing its role as an essential retailer.
Other Things to Note
In the wake of the pandemic, the curbside pickup has been gaining traction as companies are focusing on containing the spread of the virus. Impressively, Big Lots has been making operational enhancements and added the curbside pickup service for online orders. Renowned retailers like Best Buy BBY, Sprouts Farmers SFM and GameStop GME have also been enhancing their curbside pickup capabilities.
In addition, Big Lots’ e-commerce business bodes well, buoyed by the success of the “Buy Online Pick-up In Store” (BOPIS) functionality across many stores. Notably, BOPIS has helped the company increase its rate of orders. In order to generate higher volumes, this Zacks Rank #3 (Hold) company is also leveraging a loyalty database with one-to-one marketing, which has resulted in increased site traffic for orders and higher average basket. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Prior to the latest release, Big Lots withdrew its outlook for the first quarter and fiscal 2020. Also, management made unplanned expenditure on temporary store and distribution center wage increases as well as store cleaning and other items. The retailer also announced plans to strengthen financial flexibility by cutting down on operating expenses and adjusting inventory receipts. It also deferred ‘Store of the Future’ conversions to nearly 20 stores for fiscal 2020.
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