Big Lots Extends Run of Discount Chains Outshining Retail Peersby
Its stock surges after first-quarter earnings top estimates
Higher-priced retailers such as Macy’s have been struggling
Big Lots Inc. surged as much as 15 percent in early trading after earnings crushed estimates, extending a run of discount chains outperforming higher-priced peers.
The company posted first-quarter profit of 82 cents a share, excluding some items, topping the 70 cents projected by analysts. Big Lots also raised its annual forecast for earnings from continuing operations to as much as $3.50 a share. It had previously targeted no more than $3.35.
Big Lots follows Costco Wholesale Corp., Wal-Mart Stores Inc. and dollar-store chains in exceeding expectations, a sign they’re attracting more customers and keeping their operations lean. Many higher-end retailers, meanwhile, are struggling. Macy’s Inc. and Nordstrom Inc. provided bleak forecasts earlier this month, sparking concerns that consumers had pulled back on spending.
Shares of Big Lots rose as high as $51.50 in premarket trading on Friday. Before the rally, the stock was up 16 percent this year.