Closeout retailer Big Lots
Big Lots, which is in the midst of a turnaround plan that has involved closing stores and revamping its merchandise, also approved the repurchase of up to $600 million of common shares, and said it expects to deliver annual compounded earnings per share growth of 20%through its fiscal year that ends in early 2010.
The results prompted KeyBanc to raise its rating on Big Lots shares to "buy" from "hold," citing the potential for the company to exceed expectations over the next several years.
"BIG's transformation has been dramatic over the past 12 months, far surpassing our expectations," wrote KeyBanc analyst Jeffrey Stein in a note.
"Despite operating in a highly populated and competitive space, we believe BIG has been able to distinguish itself by improving execution, cutting costs and providing a more compelling value proposition to the consumer."
For the latest fourth quarter ended Feb. 3, the retailer reported net income of $104.3 million, or 94 cents a share, up from $14.7 million, or 13 cents a share, a year ago.
Income from continuing operations was $91.6 million, or 83 cents a share for the quarter, up from $37.7 million, or 33 cents a share, a year ago.
Sales rose 10.8% to $1.55 billion from $1.39 billion a year ago.
Analysts on average had expected the company to earn 70 cents a share, before exceptional items, on revenue of $1.53 billion, according to Reuters Estimates.