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

Big Lots (BIG) delivered disappointing third-quarter 2010 comparable-store sales results, rising marginally by 0.7% as against the growth of 2% to 4% forecasted by management. This is the second consecutive quarter in which the company has missed its own projection.

The company stated that sales remained robust for the first half of the quarter but started faltering in late September and continued through October. Surprisingly, Big Lots saw high demand for discretionary products such as such as furniture, home furnishings, seasonal and toys, which were offset by sluggish demand for consumables merchandise, the category in which the company has no competitive edge.

The company did not even have much time to adjust its expenses to counter the volatility in sales, which occurred late in the quarter. Consequently, the soft sales might have adversely affected the bottom line.
 
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