Big Lots Inc. BIG is slated to report third-quarter fiscal 2015 results on Dec 4, before the opening bell.
In the preceding quarter, the company posted a positive earnings surprise of 17.7%. Notably, Big Lots surpassed the Zacks Consensus Estimate in three of the last four quarters. Let’s see how things are shaping up for this announcement.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Big Lots is likely to beat earnings estimates 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. Big Lots has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a breakeven. The company carries a Zacks Rank #3 (Hold), which when combined with ESP of 0.00% makes a surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Factors Influencing this Quarter
Big Lots’ furniture financing program, merchandise initiatives and refurbished food department are expected to drive sales. However, the company lacks omni-channel capacities, which is a major drawback. Meanwhile, the company is developing a eCommerce site which will not be operational before 2016. Also, stiff competition from other players is a concern.
During the second-quarter conference call, management projected loss per share of 4 cents to earnings of $1 cent from continuing operations for the third quarter compared with a loss of 6 cents reported in the prior-year quarter. Meanwhile, comps are projected to improve in the band of 2-3%.
Stocks Poised to Beat Earnings
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:
CarMax Inc. KMX has an Earnings ESP of +1.45% and a Zacks Rank #2 (Buy).
Casey's General Stores Inc. CASY has an Earnings ESP of +2.08% and a Zacks Rank #2.
Restoration Hardware Holdings Inc. RH has an Earnings ESP of +1.59% and a Zacks Rank #3.
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