Forbes Earnings Preview: Big Lots

By Narrative Science

Leading up to Big Lots' (BIG) announcement of its first quarter earnings on Wednesday, May 23, 2012 analysts have become more wary as expectations have fallen over the past month to earnings of 69 cents per share from earnings of 79 cents per share.

What to Expect:

Wall Street projections are down 1.4% year-over-year, as the company reported earnings of 70 cents per share.

Over the past three months, the consensus estimate has sagged from 81 cents. For the fiscal year, analysts are expecting earnings of $3.33 per share.

Revenue is projected to eclipse the year-earlier total of $1.23 billion by 5.9%, finishing at $1.3 billion for the quarter. For the year, revenue is projected to come in at $5.59 billion.

Trends to Watch For:

The profit growth in the fourth quarter of the last fiscal year followed three straight quarters of falling profits. In the fourth quarter of the last fiscal year, net income rose 4.2% from the year earlier, while the figure dropped 76.3% in the third quarter of the last fiscal year, 8.2% in the second quarter of the last fiscal year and 6.1% in the first quarter of the last fiscal year.

For the past three quarters, the company has seen revenue increase. The 9.9% revenue increase brought the figure up to $1.67 billion in the most recent quarter. Looking back further, revenue increased 7.8% in the third quarter of the last fiscal year from the year earlier and 2.2% in the second quarter of the last fiscal year.

Analyst Ratings:

The majority of analysts think investors should stand pat on Big Lots, with seven of 13 analysts rating it hold.

Competitors:

Big Lots is a closeout retailer that sells various products, including food, clothing, and home decor. One of Big Lots' main competitors in the multiline retail industry is Target (TGT). Other competitors in the consumer discretionary sector include: Family Dollar Stores (FDO), Dollar General (DG), and Dollar Tree (DLTR).