Analyst Expects Solid Q3 Results From Big Lots Despite Seasonal Challenges
MKM Partners analyst Patrick McKeever maintains a Buy rating going into the results with a $60 12-month price target.
McKeever’s favorable view is based on four key aspects:
- Big Lots model’s growing consistency.
- A “broad improvement” in merchandising and execution.
- Likely continued momentum in focus categories: furniture (22 percent total sales) and soft home (12 percent of total sales).
- Little to no perceived threat from e-commerce.
Comparable Estimates In Line
Same-store sales are at 1 percent, reflecting less clearance merchandise from Big Lots, according to McKeever.
“The lower clearance reflects strong sales of seasonal merchandise in the early spring period and likely had the biggest impact on August, as clearance becomes less important in September–October,” said the analyst.
McKeever also cited furniture growth driven by more floor space, expanded assortment, new leasing options and an in-store credit card launched in June.
Image Credit: By Thankstelfair (Own work) [Public domain], via Wikimedia Commons
Latest Ratings for BIG
|Dec 2016||Loop Capital||Initiates Coverage On||Buy|
|Sep 2016||Barclays||Initiates Coverage on||Equal-Weight|
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