Earnings Preview: Bed Bath & Beyond

From AP:

Bed Bath & Beyond Inc. reports results for its fiscal third quarter on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: In early December, Bed Bath & Beyond pre-released results for the third quarter, saying same-store sales slipped amid a tough economic climate and liquidation sales by a major competitor.
The Union, N.J.-based housewares retailer it expects earnings to range between 31 cents and 35 cents per share for the quarter ended Nov. 29. That’s down from previous guidance of 41 cents to 47 cents a share the company gave in September. It also represents a drop from 2007, when the company earned 52 cents a share in the same period.
The company said its net sales for the quarter fell 0.7 percent from the same period the previous year, when it reported sales of $1.79 billion.
Same-store sales for the quarter declined about 5.6 percent. Same-store sales, or sales at stores open at least a year, are a key indicator of a retailer’s health because they measure revenue at existing locations rather than newly opened ones.
During the quarter, the retail chain saw shares sink to an eight-year intraday low as government figures show home furnishing sales fell.
BY THE NUMBERS: Analysts polled by Thomson Reuters estimate a profit of 33 cents per share on revenue of $1.79 billion for the quarter.
ANALYST TAKE: After the retailer pre-released lower-than-expected third quarter figures in early December, analysts said the company was facing increasing pressure from a difficult sales environment and the ongoing bankruptcy liquidation sales of items by competitor Linens ‘N Things.
“While we expect consumer spending will likely remain weak, Bed Bath & Beyond may well be one of the few retailers to show earnings growth next year,” SunTrust Robinson Humphrey analyst David Magee told investors in early December. “Moreover, once the macro environment improves, Bed Bath & Beyond should emerge stronger than most and could benefit from some ongoing consolidation in the space along the way.”
WHAT’S AHEAD: Investors will be looking for an update on how the company’s holiday sales fared and more details about what executives expects business trends to be in the coming year.
STOCK PERFORMANCE: During the quarter, which ended Nov. 29, shares fell about 34 percent to end the period at $20.29.

Posted by on January 6th, 2009 at 1:20 pm


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