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Big Lots is a company that operates as a closeout retailer and BIG currently operates over 1300 stores. The image of BIG has changed over the last few years as they used to have boxes and pallets of merchandise scattered throughout the store. BIG looks more like any other retailer these days and I'm not sure what part of sales are actually closeout items from other stores. The last BIG I was in looked like any other retailer with a pretty wide range of inventory.
BIG reported 2nd quarter 2008 results last week and with the current economic outlook results we're impressive. Net sales for the quarter rose by 1.9% to $1.1 billion over same quarter 2007.Same store sales of stores open at least 2 years increased by 2.8% for 2nd quarter 2008 and this was after a same store sales increase of 5.2% for 2nd quarter 2007. Operating profit for 2nd quarter 2008 was $43.5 million or 3.9% of sales compared to $33.4 million or 3.1% of total sales.
BIG issued guidance for the third quarter 2008 with 1 to 2% increase in same store sales and 1 to 2% increase for the 4th quarter too. For 2008 Big Lots is looking for a net of $1.90 to $2.00 a share on a increased profit range of 5.5 to 5.7%. Based on the current quarter and guidance for the rest of 2008 I would rate Big Lots a strong buy. With the current growth BIG is showing and with the increase in sales as the economy strengthens,I think BIG is a clear value for your portfolio.
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