Consumer Stocks Post Strong Earnings: Big Lots, AutoZone, Toll Brothers

Andrew Klips  |

Notable earnings reports have been delivered on Tuesday from Toll Brothers, AutoZone and Big Lots. So how’d they do?

Big Lots (BIG) swung to a loss in the fiscal third quarter and raised its earnings guidance for the full year. The closeout retailer was struck by a 0.4% drop in sales to $1.13 billion. The Columbus, Ohio-based company reported a third-quarter loss of $5.99 million, or 10 cents per share, compared to a profit of $4.19 million, or 6 cents per share, in the year prior quarter. Gross margins, which have been pressured by stiff competition from rivals like Wal-Mart (WMT), faded to 38.1% from 39% in the 2011 quarter.

Analysts were expecting a loss of 24 cents per share and revenue of $1.4 billion.

Looking at the current quarter, Big Lots said that it expects adjusted earnings of $1.91 to $2.10 per share. For the complete year, Big Lots raised its guidance for adjusted earnings to between $2.86 and $3.05 per share; up from its prior estimate of $2.80 to $2.95 per share. Wall Street had been expecting consolidating income of $2.80 per share.

Shares of BIG closed Monday’s session at $28.04 and are down about 26 percent across 2012.

AutoZone Inc. (AZO) reported a 6.4% jump in fiscal first-quarter profit to $203.5 million, or $5.41 per share, versus $191.1 million, or $4.68 per share in the year prior quarter. Net sales rose to $1.99 billion from $1.92 billion last year. Same store sales – sales at stores open at least one year – grew by 0.2% as gross margins widened from 51.1% to 51.8% on a 53 basis point improvement in merchandise margins related to lower acquisition costs and tightened shrink expense.

Wall Street was predicting the Memphis, Tennessee auto parts retailer to record earnings of $5.41 per share on $2.02 billion in revenue.

Shares of AZO closed Monday at $378.01 and are ahead by 18 percent this year.

Luxury home builder Toll Brothers Inc. (TOL) posted a stark increase in fourth quarter net income to $411.42 million, or $2.35 per share, compared to $15.04 million, or 9 cents per share, in Q4 last year. The increase was largely attributable to a $350.7 million net tax benefit. Adjusted income totaled $60.7 million, or 35 cents per share. On the whole, Toll Brothers posted wide gains. Quarterly revenue surged 48% to $632.8 million from $427.8 million the year earlier. Net contracts increased by 75% to $684.1 million as units rose 70%. The backlog of orders for the Horsham, Pennsylvania-based company jumped 54% to $1.67 billion, lending credence to the continued recovery of the American housing market.

Analysts were expecting an adjusted per-share profit of 23 cents on revenue of $566.74 million.

Shares of TOL closed Monday at $32.43 and are up by 62 percent in 2012.

Another highly anticipated earnings report will be coming after the markets close on Tuesday from Internet-music provider Pandora Inc. (P). Wall Street is expecting Pandora to post earnings of 1 cent per share on revenue of $117 million from the third quarter, compared to nil per share and $75 million in revenue in Q3 last year.

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