Bed Bath & Beyond posted solid third-quarter fiscal 2014
results, wherein both sales and earnings increased year over year.
Further, the company raised its earnings forecast for fiscal 2014.
We are impressed by the company's focus on strategic initiatives,
including store expansion, enhancement of eCommerce capabilities
and improvisation of customer services. Further, the company's
debt-free balance sheet and cash flow generating capacity provides
increased visibility to drive future growth. Also, looking at the
improving housing market, we expect the company's sales to grow at
an impressive pace. However, we remain concerned regarding the
company's margins, which have been negatively impacted by a rise in
coupon expenses and an increase in net direct-to-customer shipping
expense. Given the pros and cons, we maintain our Neutral stance on
Bed Bath & Beyond Inc. is a leading operator of specialty
retail stores in the U.S. and Canada. The company offers
merchandise through Bed Bath & Beyond, Harmon, Christmas Tree
Shops (CTS), andThat!, World Market, Cost Plus World Market, World
Market Stores and buybuy BABY stores. Bed Bath's stores primarily
span across 20,000 50,000 square feet on an average, while some
stores even exceed an area of 80,000 square feet. The company
provides a wide assortment of "everyday low price" products,
primarily including domestic merchandise (such as bed linens, bath
accessories, and kitchen textiles) and home furnishings (such as
cookware, dinnerware, glassware and basic house ware). Bed Bath's
product portfolio also includes food, giftware, health and beauty
care items along with infant and toddler merchandise.
As of Nov 29, 2014, the company operated 1,019 Bed Bath &
Beyond stores in all 50 states, the District of Columbia, Puerto
Rico and Canada 270 World Market or Cost Plus World Market stores
78 Christmas Tree Shop or andThat! stores 93 buybuy BABY stores and
50 stores under the names of Harmon or Harmon Face Values, thereby
bringing the total store count to 1,510. Additionally, in a joint
venture, Bed Bath & Beyond operates 5 stores in Mexico City
under its namesake brand.
Bed Bath & Beyond Inc. (BBBY): Read the Full
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