Big Lots Inc. BIG is set to report its first-quarter fiscal 2015 results on May 29, 2015. Last quarter, it posted a positive surprise of 0.6%. Let us see how things are developing for this announcement.
Factors Influencing This Quarter
Big Lots continues to focus on the furniture financing program as well as the food and consumables categories, as these have been consistently gaining traction. Further, the company has been actively rolling out cooler/freezer facility to expand merchandise of food-related items to target food stamp recipients. Following the holiday season, Big Lots completed the roll out of this facility to 500 additional stores. These initiatives are likely to boost the company’s comps and revenues going forward. However, lack of e-commerce facilities can mar Big Lots’ performance. The company's digital portal is not likely to be operational before the end of 2015.
Earnings Whispers
Our proven model does not conclusively project Big Lots as likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, #2 or #3 for this to happen. This is not the case here, as you will see below.
Zacks ESP: ESP for Big Lots is 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate stand at 59 cents per share.
Zacks Rank: Big Lots carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, we need to have a positive ESP to be confident of an earnings surprise.
We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into an earnings announcement, especially when the company seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Genesco Inc. GCO has an Earnings ESP of +2.94% and a Zacks Rank #2 (Buy).
Burlington Stores, Inc. BURL has an Earnings ESP of +5.00% and a Zacks Rank #3.
G-III Apparel Group, Ltd. GIII has an Earnings ESP of +33.33% and a Zacks Rank #3.
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