Good News for Big Lots; Good News for Dollar Stores? (BIG, DLTR, DG, FDO, NDN, WAL)

Big Lots BIG posted a record income for Q4 last year, in which the net income totaled $222.5 million, or $2.83 per diluted share, compared to $200.4 million, or $2.42 per diluted share, in the prior year. Following good profit results, last Friday Big Lots announced changes in its organization structure, naming a new Executive Vice-President of Merchandising in a bid to support future growth. Former Executive Vice President of Merchandising, John Martin, who had been working in this position for eight years has been named Executive Vice President of Administration and will assume responsibility for Store Operations and Human Resources. He will be replaced by Doug Wurl, who joined the Big Lots team from Sears Holding Corporation where he was Vice President. Strong results for America's largest broadline closeout value retailer, along with its commitment for future expansion, signal a growing market potential for the low-cost small box retailers. Surprisingly, in the early trading, shares of Big Lot fell by 0.34% to $43.53, while Big Lot's main competitors opened the day on a positive note. Dollar General DG and Family Dollar Stores FDO, which are also planning to expand this year with 900 new stores, both made gains this morning. The dollar stores use their smaller size stores, which gives them an appearance of a neighborhood shop, to infiltrate smaller towns which may not have big-box retailers like Wal-Mart WMT in close proximity. Dollar General gained 0.13% today at $31.49 while Family Dollar was up over 1% in the early trading. Its shares reached just under $52. Other companies in the branch have also risen in the early trading. Dollar Tree DLTR, a Virginia-based retailer, has gained just under 1%, with its shares standing at $56.9. 99 Cents Only Stores' NDN shares were also up in the morning trading. Its shares reached $20.06, rising 0.4%. In spite of an early morning fall, the overall picture for Big Lots' shares remains positive, as well as for shares of its main competitors. Strong profit results and expansion plans by a number of dollar store companies are a possible sign of an untapped market potential.