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.
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.
Bed Bath & Beyond Inc. (BBBY): Read the Full
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