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The US consumer has gone on-line, we know that from Amazon (AMZN) and Walmart's (WMT) online segment but is there more to it? On Friday discount and closeout retailer Big Lots, Inc. (BIG) reported better than expected Q4 earnings.

Big Lots Sign

With the Covid lockdown there is a huge part of the US economy crushed, we know that from the the Fed bailouts among other statistics such as employment and from the recent Fed bank stress tests and financial stability reports.. We have since the online economy boom and at the same time as unemployment soar with incomes collapse. We know convenience and entitlement are also huge factors, it is hard to beat $AMZN deliveries at your day at a cheaper price, Big Lots has also joined in that marketplace..

On Friday discount and closeout retailer Big Lots, Inc. (BIG) issued earnings guidanceearnings. The report on the back of traditional and online reports tell a lot of why J..Penney. Macey's among others are in a retail death spiral. We want things cheap and we want them now and if we don't have money lets get closeouts and discounts.

Earnings Guidance:

  • For the second quarter of fiscal 2020, the company now expects comparable sales to be up by a mid-to-high twenties percentage, which reflects anticipated moderation from quarter-to-date trends.
  • The company expects adjusted diluted EPS, which excludes a gain of approximately $11.00 per share on the sale of its four distribution centers as part of the previously announced sale/leaseback transactions, to be in the range of $2.50 to $2.75, compared to $0.53 of adjusted diluted EPS for the second quarter of fiscal 2019.
  • The outlook reflects an expected gross margin rate above last year and continued strong control of expenses, notwithstanding the inclusion of additional costs related to COVID-19.

 

Reaction To News: Big Lots NYSE: BIG:

June 26, 2020. $44.66 $10.81 +31.94%

We now live in a world of central bank easing and printing for the last 11 years, a situation where a populist business man is running the US and a Federal Reserve in a crisis management cycle.

The retail picture helps us here try to work it out.

Guidance

OLUMBUS, Ohio, June 26, 2020 /PRNewswire/ -- Big Lots, Inc. (NYSE: BIG) today provided a business update on its expected results for the second quarter of fiscal 2020. The company has seen a continuation of the strong demand that began in mid-April, with quarter-to-date comparable sales through fiscal June increasing well ahead of expectations.

For the second quarter of fiscal 2020, the company now expects comparable sales to be up by a mid-to-high twenties percentage, which reflects anticipated moderation from quarter-to-date trends. The company expects adjusted diluted EPS, which excludes a gain of approximately $11.00 per share on the sale of its four distribution centers as part of the previously announced sale/leaseback transactions, to be in the range of $2.50 to $2.75, compared to $0.53 of adjusted diluted EPS for the second quarter of fiscal 2019.

The outlook reflects an expected gross margin rate above last year and continued strong control of expenses, notwithstanding the inclusion of additional costs related to COVID-19. With these positive business trends, and the recent closure of the sale/leaseback transactions, the company is in a very strong liquidity position, with current cash and short-term investments of approximately $890 million, and no amounts drawn on its $700 million revolving credit facility.

The company's cash position does not yet reflect expected tax payments of approximately $170 million related to the sale/leaseback transactions. In addition, the company's cash position has been positively impacted by low inventory levels due to strong sales trends.

Commenting on today's announcement, Bruce Thorn, President and CEO of Big Lots stated, "We are very pleased with our quarter-to-date performance and our outlook for the full quarter. Our assortment continues to resonate across all of our merchandise categories, while we continue to grow our customer base and accelerate sign-ups to our Big Rewards program. I could not be prouder of the incredible job our team continues to do in adapting and responding to the unprecedented challenges from the COVID-19 crisis. Our number one priority remains serving customers and communities in a safe and healthy environment. Looking forward, our strong performance over the past few months gives us growing confidence that we are well positioned to navigate through the upcoming quarters and beyond. In addition, our strong liquidity position will support our ability to return cash to shareholders through share repurchases, while continuing to invest in high-return growth initiatives under Operation North Star."

About Big Lots, Inc.

Headquartered in Columbus, Ohio, Big Lots, Inc. (NYSE: BIG) is a discount retailer operating 1,401 BIG LOTS stores in 47 states with product assortments in the merchandise categories of Furniture, Seasonal, Soft Home, Food, Consumables, Hard Home, and Electronics, Toys & Accessories. The company's mission is to help people Live BIG and Save Lots. The company strives to be the BIG difference for a better life by delivering unmatched value to customers through surprise and delight, being a "best places to work" culture for associates, rewarding shareholders with consistent growth and top tier returns, and doing good in communities as the company does well. For more information about the company, visit www.biglots.com.;

Source: Big lots, TradersCommunity

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