Bed Bath & Beyond Inc. (BBBY): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Bed Bath & Beyond's strategic initiatives, including store expansion, enhancement of e-commerce capabilities and improvisation of customer services have started showing results as evident from its recently reported second-quarter fiscal 2014 results. The company's top and bottom lines improved year-over-year and surpassed the Zacks Consensus Estimate. Further, looking at the improving housing market we expect the company's sales to grow at an impressive pace. However, we are concern about the stock's margins which has been negatively impacted by a rise in coupon expenses, increase in net direct-to-customer shipping expense and mix shift to products sold in lower margin categories. Going forward, we expect this weakness to continue due to persistence of the above factors through the rest of fiscal 2014. Given the pros and cons, we maintain our Neutral stance on the stock.

Overview:

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 Aug 30, 2014, the company operated 1,017 Bed Bath & Beyond stores in all 50 states, the District of Columbia, Puerto Rico and Canada 269 World Market or Cost Plus World Market stores 78 Christmas Tree Shop or andThat! stores 92 buybuy BABY stores and 50 stores under the names of Harmon or Harmon Face Values, thereby bringing the total store count to 1,506. Additionally, in a joint venture, Bed Bath & Beyond operates 5 stores in Mexico City under its namesake brand.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: BBBY , CTS

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