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

Andrew Klips |

Consumer Stocks Post Mixed EarningsNotable 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.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:


Symbol Name Price Change % Volume
AZO AutoZone Inc. 511.46 8.90 1.77 651,303 Trade
WMT Wal-Mart Stores Inc. 76.15 0.13 0.17 7,153,326 Trade
BIG Big Lots Inc. 48.19 -0.09 -0.19 561,567 Trade
P Pandora Media Inc. 9.47 0.33 3.61 6,423,155 Trade
FVL:CA Freegold Ventures Limited 0.15 0.00 0.00 4,500
TOL Toll Brothers Inc. 39.30 0.05 0.13 2,262,191 Trade


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