Bed Bath & Beyond Earnings Preview

After the close today, Bed Bath and Beyond (BBBY) will report its fourth quarter earnings. Here’s a preview from AP:

EXPECTATIONS: The company, which, as of the end of November 2005, operated 793 superstores selling better-quality home merchandise, forecast in December fourth-quarter earnings of 64 cents a share, and sales in stores open at least one year — a key performance gauge called same-store sales — to rise between 3 percent to 5 percent.
Wall Street expects earnings of 65 cents per share, the mean estimate of 27 analysts surveyed by Thomson Financial, on $1.64 billion in sales.
ANALYST TAKE: “While Bed Bath & Beyond remains a best-in-class operator with strong cash flow generation, its slowing growth across a tougher home spending backdrop with increased competition makes for a range-bound stock in the near term,” Goldman Sachs analyst Adrianne Shapira wrote in a March 13 client note.
The investment bank also lowered its fourth-quarter estimate to 65 cents from 66 cents per share, and scaled down its same-store sales estimate for the quarter to 3 percent from 3.5 percent.
QUARTER DEVELOPMENTS: Bed Bath & Beyond in January approved a $200 million increase to its previously announced $400 million stock buyback program. The company said it didn’t expect the new $600 million authorization would have a material impact on fourth-quarter earnings.
The retailer in January also named its chief merchant, Arthur Stark, as its new president, and named Eugene A. Castagna, a vice president of finance, as chief financial officer and treasurer. Castagna succeeded Ronald Curwin, who was named senior vice president of investor relations, a new post.
COMPETITORS: Bed Bath & Beyond competes with other home-focused retailers like Target Corp., Linens N Things, and Pier 1 Imports Inc.
Target in mid-February reported its fourth-quarter earnings rose 14 percent, above analysts’ estimates, and forecast earnings per share growth in the mid-teens range in 2006. Pier 1, which is trying to engineer a turnaround amid several months of flagging sales, in March said it would sell its British subsidiary to Iceland-based Palli Ltd. for about $15 million.
Linens N Things agreed to be taken private in a $1.3 billion buyout by an investment group in January.
STOCK PERFORMANCE: Bed Bath & Beyond shares have gained about 6 percent so far this year and touched a 52-week low of $35.85 on Jan. 6. It is down 19 percent from a year-high of $46.99 it hit in July 2005.

Posted by on April 5th, 2006 at 10:08 am


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