Here's How Big Lots (BIG) is Placed Ahead of Q4 Earnings

Big Lots, Inc. BIG is likely to report a decrease in the top and the bottom line from the last fiscal year’s quarterly reading in its fourth-quarter fiscal 2022 results on Mar 2, before the market open. The Zacks Consensus Estimate for the fiscal fourth quarter’s bottom line is currently at a loss of 57 cents per share, wider than the loss of 29 cents pegged 30 days ago. The company delivered earnings of $1.75 per share in the year-earlier quarter.

The consensus mark for quarterly revenues is pegged at $1,553 million, indicating a 10.6% drop from the last fiscal year’s quarterly reported number.

We expect revenues to fall 12% from the year-ago fiscal quarter’s tally to $1,523.6 million and the adjusted loss to decline 117.8% from the year-earlier fiscal quarter’s level to 31 cents per share.

This Columbus, OH-based player delivered a negative earnings surprise of 37.3%, on average, in the trailing four quarters.

Key Factors to Note

Big Lots’ quarterly performance might have been hurt by a challenging macroeconomic landscape, including headwinds like supply-chain challenges and inflationary pressures. Any deleverage in SG&A costs might have been added deterrents. The increased outbound transportation expenses and occupancy costs are adding to deleveraged SG&A costs In addition, Big Lots has been witnessing increased freight costs for a while. All these factors might have hurt BIG’s performance in the fiscal fourth quarter.

On its last earnings call, management had projected the top-line performance to remain challenging. It anticipated a comparable sales decline in the low-double-digit range for the fiscal fourth quarter. Big Lots highlighted that the gross margin is likely to be hurt by additional markdowns related to accelerated store closures and continued efforts to reduce inventory. However, it expected a sequential gross-margin improvement for the fourth quarter, resulting in a gross margin rate in the mid-30s.

Further, management had forecast SG&A expenses to remain flat year over year in the quarter under review due to accelerated depreciation from fourth-quarter store closures, higher occupancy costs, elevated outbound transportation expenses and costs related to two incremental forward distribution centers.

On the flip side, Big Lots’ Operation North Star initiative and e-commerce business appear encouraging. BIG’s Broyhill and Real Living brands are performing well. Management is also consistently taking steps to control expenses.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Big Lots this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as elaborated below. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Big Lots, Inc. Price and EPS Surprise

 

Big Lots, Inc. Price and EPS Surprise
Big Lots, Inc. Price and EPS Surprise

Big Lots, Inc. price-eps-surprise | Big Lots, Inc. Quote

 

Big Lots currently has  an Earnings ESP of -43.50% and a Zacks Rank #4 (Sell).

Stocks Poised to Beat Earnings Estimates

Here are three companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Ulta Beauty ULTA currently has an Earnings ESP of +8.53% and a Zacks Rank of 2. ULTA is likely to register a bottom-line improvement year over year while reporting fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly earnings per share of $5.53 suggests an improvement of 2.2% from the year-ago fiscal quarter’s actuals.

Ulta Beauty's top line is expected to rise from the year-earlier fiscal quarter’s finals. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.01 billion, implying an improvement of 10.3% from the prior-year fiscal quarter’s figure. ULTA has a trailing four-quarter earnings surprise of 26.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar Tree DLTR currently has an Earnings ESP of +2.97% and a Zacks Rank of 3. DLTR is likely to register top-line growth from the prior-year fiscal quarter’s reported figure while reporting fourth-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for quarterly revenues is pegged at $7.61 billion, suggesting 7.5% growth from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Dollar Tree’s earnings for the fiscal fourth quarter is pegged at $2.02 per share, suggesting 0.5% growth from the year-ago fiscal quarter’s tally. The Zacks Consensus Estimate has remained stable over the past 30 days. DLTR delivered an earnings beat of 9%, on average, in the trailing four quarters.

PVH Corp PVH currently has an Earnings ESP of +0.71% and a Zacks Rank of 3. PVH is likely to register a bottom-line decrease from the year-ago fiscal quarter’s reported figure while reporting fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings has remained stable at $1.64 per share over the past 30 days, suggesting a 42.3% decline from the year-ago fiscal quarter’s reported number.

PVH Corp’s top line is expected to fall from the prior-year fiscal quarter’s reported number. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.34 billion, suggesting a 3.8% decline from the prior-year fiscal quarter’s reported figure. PVH delivered an earnings beat of 22.9%, on average, in the trailing four quarters.

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Dollar Tree, Inc. (DLTR) : Free Stock Analysis Report

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