Why Big Lots, Inc. Stock Jumped in November
Shares of Big Lots (NYSE: BIG) were moving higher on better-than-expected earnings reports from its peers and as strong Black Friday sales drove brick-and-mortar retail stocks up across the board. Investors were also anticipating the discount retailer's earnings report, which came out on Dec. 1.
According to data from S&P Global Market Intelligence, the stock finished up 15.2%. As the chart below shows, it surged toward the end of the month as Black Friday weekend reports came out.
Big Lots shares rose 9% over the four trading days following Black Friday as retail stocks climbed broadly. Data from Wells Fargo showed that Black Friday traffic had the slowest decline since 2013 and there were fewer markdowns than in previous years. Though traffic on Thanksgiving and Black Friday tumbled 1.6%, online sales were up 18%, a sign that retailers are successfully transitioning to e-commerce. The National Retail Federation also said 174 million people went shopping over the holiday weekend, better than expectations of 164 million people.
Big Lots' stock fell 1.5% on its third-quarter earnings report on Dec. 1 even as the company reported better-than-expected earnings. Adjusted earnings per share increased from $0.04 to $0.06, beating estimates by a penny. Comparable sales increased 1% as overall revenue inched up $1.11 billion, which missed expectations at $1.12 billion. The company also raised its adjusted EPS guidance for the fourth quarter from $2.30-$2.38 to $2.35-$2.40, above last year's figure of $2.26, a positive sign heading into the holiday season.
Though the stock dipped modestly after its earnings report was posted, that may be more of a reflection of the run-up prior to the report rather than dissatisfaction with it. With adjusted EPS expected to grow 16%-18% this year, Big Lots is one of the few brick-and-mortar retailers that remain in good shape.
10 stocks we like better than Big LotsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Big Lots wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 6, 2017
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.