Recession stock: Big Lots

Big Lots, which specializes in sales of excess inventory, forecast income from continuing operations to range from $1.75 to $1.90 per share this year, compared with analyst expectations for earnings of $1.74 per share.

CEO Steve Fishman attributed the results and outlook to Big Lots offering its customers "better quality merchandise, new brands, and tremendous value at a time when they needed it the most."

He also mentioned that the company controlled costs very diligently and recorded the lowest expense rate in its history, investing for the future in new IT systems, and said that it opened 21 stores during the year.

Fishman said the global economic crisis over the last several months kept the company from performing as well as it could have in 2008, as it did for most businesses.

He also said the company has always believed that if it improved its merchandise offerings, made good real estate decisions and relentlessly attacked the cost structure, good things could happen for the business.

He noted that while sales comps were down in the 3% range for the fourth quarter, it was a continuation of the trends seen in the latter part of September and October. He said the consumer is focused on need-based product right now and is holding off until the last possible moment for bigger discretionary purchases.

Big Lots is not planning any big shifts, according to Fishman. He said that because of the deep, longstanding relationships the company has with its vendor partners, and the continuing struggles of other retailers, Big Lots anticipates more deals will be made available at savings that can then be passed on to customers to create excitement in stores.

The company will focus on value and savings from a marketing perspective. In-store signage has been overhauled, and its new television commercials will focus on savings and value.

Big Lots expects to open 45 stores this year, with the largest concentration in the coastal areas of the Northeast, the Carolinas and Florida, and in the west. Those were areas where it was the most difficult to find store leases in the company's price range during the past few years.

With retailers like Circuit City and Linens 'n Things closing shop, the company will have leverage in negotiating favorable terms on new stores.

It just goes to show that recessions can be positive for some companies.

Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, BIG an A or Strong Buy.

Jamie Dlugosch is a contributor to InvestorPlace.com.