Bed Bath & Beyond Plunges After Hours

In last week’s CWS Market Review, I made a bold prediction: I said that I thought Bed & Bath & Beyond ($BBBY) could report earnings of 88 cents per share for its May quarter. This was well above what most others thought. The company had given guidance of 79 to 83 cents per share. Wall Street’s consensus was for 84 cents per share.

As it turns out, I wasn’t optimistic enough. For its fiscal first quarter, Bed Bath & Beyond earned 89 cents per share.

This was a big improvement over the May quarter from last year when BBBY earned 72 cents per share. For the May quarter, gross margins slightly contracted from 40.6% to 40.0%. Sales rose by 5.1% to $2.218 billion, and same-store sales rose by 3%.

But the big news was BBBY’s weak guidance for the fiscal second quarter which ends in August. BBBY said to expect earnings to range between 97 cents and $1.03 per share. Wall Street had been expecting $1.08. The shares dropped 11% in after-hours trading.

For this year, the company sees earnings growth in the high single digits to low double digits. Let’s say that’s 8% to 12%. For the last fiscal year, BBBY earned $4.06 per share. The guidance translates to earnings between $4.38 and $4.55 per share. The Street had been expecting $4.63 which represents growth of 14%. In other words, looking past next quarter, this was below Wall Street’s view but not by much. Certainly not worth an 11% haircut.

Let’s see what happens tomorrow, but I suspect BBBY won’t be down by so much once trading starts.

Here are the sales and earnings for the past few quarters:

Quarter Sales Gross Profit Operating Profit Net Profit EPS
May-99 $356,633 $146,214 $28,015 $17,883 $0.06
Aug-99 $451,715 $185,570 $53,580 $33,247 $0.12
Nov-00 $480,145 $196,784 $50,607 $31,707 $0.11
Feb-00 $569,012 $238,233 $77,138 $48,392 $0.17
May-00 $459,163 $187,293 $36,339 $23,364 $0.08
Aug-00 $589,381 $241,284 $70,009 $43,578 $0.15
Nov-01 $602,004 $246,080 $64,592 $40,665 $0.14
Feb-01 $746,107 $311,802 $101,898 $64,315 $0.22
May-01 $575,833 $234,959 $45,602 $30,007 $0.10
Aug-01 $713,636 $291,342 $84,672 $53,954 $0.18
Nov-02 $759,438 $311,030 $83,749 $52,964 $0.18
Feb-02 $879,055 $370,235 $132,077 $82,674 $0.28
May-02 $776,798 $318,362 $72,701 $46,299 $0.15
Aug-02 $903,044 $370,335 $119,687 $75,459 $0.25
Nov-03 $936,030 $386,224 $119,228 $75,112 $0.25
Feb-03 $1,049,292 $443,626 $168,441 $105,309 $0.35
May-03 $893,868 $367,180 $90,450 $57,508 $0.19
Aug-03 $1,111,445 $459,145 $155,867 $97,208 $0.32
Nov-04 $1,174,740 $486,987 $161,459 $100,506 $0.33
Feb-04 $1,297,928 $563,352 $231,567 $144,248 $0.47
May-04 $1,100,917 $456,774 $128,707 $82,049 $0.27
Aug-04 $1,273,960 $530,829 $189,108 $120,008 $0.39
Nov-05 $1,305,155 $548,152 $190,978 $121,927 $0.40
Feb-05 $1,467,646 $650,546 $283,621 $180,980 $0.59
May-05 $1,244,421 $520,781 $150,884 $98,903 $0.33
Aug-05 $1,431,182 $601,784 $217,877 $141,402 $0.47
Nov-06 $1,448,680 $615,363 $205,493 $134,620 $0.45
Feb-06 $1,685,279 $747,820 $304,917 $197,922 $0.67
May-06 $1,395,963 $590,098 $148,750 $100,431 $0.35
Aug-06 $1,607,239 $678,249 $219,622 $145,535 $0.51
Nov-07 $1,619,240 $704,073 $211,134 $142,436 $0.50
Feb-07 $1,994,987 $862,982 $309,895 $205,842 $0.72
May-07 $1,553,293 $646,109 $154,391 $104,647 $0.38
Aug-07 $1,767,716 $732,158 $211,037 $147,008 $0.55
Nov-08 $1,794,747 $747,866 $203,152 $138,232 $0.52
Feb-08 $1,933,186 $799,098 $259,442 $172,921 $0.66
May-08 $1,648,491 $656,000 $118,819 $76,777 $0.30
Aug-08 $1,853,892 $739,321 $187,421 $119,268 $0.46
Nov-08 $1,782,683 $692,857 $136,374 $87,700 $0.34
Feb-09 $1,923,274 $785,058 $231,282 $141,378 $0.55
May-09 $1,694,340 $666,818 $142,304 $87,172 $0.34
Aug-09 $1,914,909 $773,393 $222,031 $135,531 $0.52
Nov-09 $1,975,465 $812,412 $245,611 $151,288 $0.58
Feb-10 $2,244,079 $955,496 $370,741 $226,042 $0.86
May-10 $1,923,051 $775,036 $225,394 $137,553 $0.52
Aug-10 $2,136,730 $874,918 $296,902 $181,755 $0.70
Nov-10 $2,193,755 $896,508 $305,110 $188,574 $0.74
Feb-11 $2,504,967 $1,076,467 $461,052 $283,451 $1.12
May-11 $2,109,951 $857,572 $288,948 $180,578 $0.72
Aug-11 $2,314,064 $950,999 $371,636 $229,372 $0.93
Nov-11 $2,343,561 $958,693 $357,020 $228,544 $0.95
Feb-12 $2,732,314 $1,163,669 $550,765 $351,043 $1.48
May-12 $2,218,292 $887,199 $313,398 $206,836 $0.89

Posted by on June 20th, 2012 at 5:40 pm


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