NEW YORK (The Street) -- With some terrible results released by various retailers after April's weak consumer sales, it's tough to place a long bet here on close-out specialty retailer Big Lots (BIG), which is due to report fiscal first-quarter earnings Friday before the opening bell.
The Columbus, OH.-based company may have posted in-line revenue results for three straight quarters, but revenue must show a stronger upward trend for Big Lots stock to climb. Merely posting in-line results does not incite confidence, especially when the company suffers from both decelerating same-store sales and compressed margins. Without strong in-store traffic or higher margins, profit will be tough to come by.
For the quarter that ended that ended April, the average analyst estimate calls for earnings of 59 cents a share on revenue of $1.28 billion. This compares with 50 cent-a-share earnings on revenue of $1.28 billion in the year-ago quarter. For the year, Big Lots is expected to earn $2.87 per share, marking a 16% year-over-year increase, while revenue of $5.21 billion will up less than 1%.
Big Lots stock closed Wednesday at $45.30, up 1.44%. The shares are up more than 13% year to date, dominating not only the broader averages, but also the 2.74% gains in SPDR S&P Retail ETF (XRT) -- home to prominent retailers like Amazon.com (AMZN) and Costco (COST). And that's all the more reason BIG investors should consider locking in some profits now, especially since Big Lots is approaching quarters where year-over-year comparisons will get tougher.