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Interested In Big Lots, Inc. (NYSE:BIG)? Here's How It Performed Recently

Simply Wall St

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Measuring Big Lots, Inc.'s (NYSE:BIG) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess BIG's recent performance announced on 02 February 2019 and weigh these figures against its long-term trend and industry movements.

View our latest analysis for Big Lots

Was BIG's weak performance lately a part of a long-term decline?

BIG's trailing twelve-month earnings (from 02 February 2019) of US$157m has declined by -17% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 5.6%, indicating the rate at which BIG is growing has slowed down. Why could this be happening? Well, let's look at what's transpiring with margins and whether the whole industry is facing the same headwind.

NYSE:BIG Income Statement, April 1st 2019

In terms of returns from investment, Big Lots has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. However, its return on assets (ROA) of 8.3% is below the US Multiline Retail industry of 8.4%, indicating Big Lots's are utilized less efficiently. Furthermore, its return on capital (ROC), which also accounts for Big Lots’s debt level, has declined over the past 3 years from 25% to 16%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 8.5% to 75% over the past 5 years.

What does this mean?

Big Lots's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Usually companies that experience a drawn out period of diminishing earnings are undergoing some sort of reinvestment phase Although, if the whole industry is struggling to grow over time, it may be a indicator of a structural shift, which makes Big Lots and its peers a riskier investment. I recommend you continue to research Big Lots to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for BIG’s future growth? Take a look at our free research report of analyst consensus for BIG’s outlook.
  2. Financial Health: Are BIG’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 02 February 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.