Talbots and Big Lots Shares Rise

Over at discounter Big Lots, quarterly net results were a loss of $6.4 million, or 5 cents a share, which included charges, compared with a loss of $5.1 million, or 4 cents a share, in the year earlier. The company had a loss from continuing operations of $5.1 million, or 4 cents a share, which was in line with analysts' estimates and flat with the year-earlier results.

Shares of the Columbus, Ohio-based company were recently gaining 59 cents, or 4.3%, to $14.35.

Sales increased 9.2% to $948.1 million. Big Lots cited strong sales of consumables, hardlines and furniture. The company also said comparable-store sales for stores open two years at the beginning of the fiscal year were up 4.3% for the quarter.

"Sales slowed during October leading to a slight miss to plan for the quarter," said Michael J. Potter, chief executive. "The late October slowdown appears to have been isolated as sales and customer trends have improved in November."

U.S. Bancorp Piper Jaffray analyst Brent Rystrom believes Big Lots is staging a comeback after its stock had shown signs of weakness lately. He noted, however, that the company's "near-term sales and earnings are somewhat weaker than we would have liked."

Still, "management is making solid moves to position this company for long-term growth in sales and earnings, and as the economy improves it should see benefits," said Rystrom, who has an outperform rating on the company. (Piper Jaffray does investment banking for Big Lots.)

The company sees fourth-quarter earnings from continuing operations of 64 cents to 69 cents a share, a 12% to 21% increase over the prior year.

The guidance is based on a fourth-quarter comparable-store sales estimate of an increase in the mid-single digits. Sales are already in line with the company's plan through the first two weeks of November with most of the sales increase coming from customer transactions, Big Lots said.

Analysts' consensus is for a profit of 66 cents a share in the quarter and total sales of $1.34 billion. The company earned 57 cents a share in the year-earlier quarter.

Big Lots also said it is comfortable with Thomson First Call's 2004 EPS estimate of 85 cents.

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