Earnings Preview: Bed Bath & Beyond

Bed Bath & Beyond (BBBY) is set to report its earnings tomorrow. Here’s part of a preview from AP:

BY THE NUMBERS: Bed Bath & Beyond said it January that it expects to earn 64 cents to 67 cents per share in the fourth quarter, which ends March 1. Analysts polled by Thomson Financial predict earnings of 65 cents per share on revenue of $1.96 billion.
ANALYST TAKE: Matt Nemer of Thomas Weisel Partners LLC said he is concerned about Bed Bath & Beyond’s bedding and textiles segment, which potentially accounts for up to 40 percent of its revenue.
“Continued weakness in the category could pressure the top line, and promotional activity could further impact margins,” the analyst wrote in a Friday client note.
Home furnishings and accessories retailers are being pressured as the housing market sags and consumers curb discretionary spending due to worsening credit problems and high energy costs.
Nemer anticipates a quarterly profit of 64 cents per share on sales of $1.95 billion.
Deutsche Bank North America’s Mike Baker said Bed Bath & Beyond’s margins are being squeezed as it deals with higher advertising and postage and paper costs. The company has had to send out more coupons to stay competitive in the latest economic environment, he said. Bed Bath & Beyond is also fighting rising depreciation and a shift toward lower-margin hard goods.
WHAT’S AHEAD: Nemer anticipates Bed Bath & Beyond will provide a weak fiscal 2008 forecast, due to the current economic climate and management’s cautious view of the market. He estimates 2008 earnings at $2.11 per share.
Analysts predict full-year net income of $2.15 per share.

Posted by on April 8th, 2008 at 9:53 am


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