Big Lots, Inc. (BIG) - Bear of the Day

Big Lots Inc.'s (BIG) third-quarter 2010 earnings missed both the Zacks Consensus Estimate and its own outlook. The company also delivered disappointing comparable store sales results, rising marginally by 0.7% as against growth of 2% to 4% forecast by management.

The lower-than-expected third-quarter 2010 results prompted management to lower its earnings outlook. Big Lots now expects fiscal 2010 earnings in the range of $2.75 to $2.81 per share, down from its previous guidance range of $2.82 to $2.90. Following this, a negative sentiment is palpable among the analysts covering the stock, and we are witnessing a fall in the Zacks Consensus Estimates.

Big Lots, which operates in a highly competitive discount retail business, faces stiff competition from other general merchandise, discount, food, arts and crafts, and dollar store retailers. This may result in loss of market share, fall in sales and operating margins.
 
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