Bed Bath & Beyond posted dismal first-quarter fiscal 2014
results, wherein both top and bottom line fell short of the Zacks
Consensus Estimate. The lower-than-expected earnings performance
was due to a challenging retail environment, soft sales and
increased costs because of the ongoing long-term investments.
Moreover, the company provided a cautiously optimistic guidance for
the second quarter and fiscal 2014. Though the near-term outlook
appears to be bleak, we believe the company's strategic initiatives
toward expanding its store base, investments in improving customer
service and progress in online sales show potential. Based on a
rebound in the housing market, we expect the company to grow at an
impressive pace. 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 20,000 50,000 square feet on an average, while some stores
even exceed 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 as well as infant and toddler merchandise.
As of May 31, 2014, the company operated 1,015 Bed Bath &
Beyond stores in all 50 states, the District of Columbia, Puerto
Rico and Canada 266 World Market or Cost Plus World Market stores
78 Christmas Tree Shop or andThat! stores 91 buybuy BABY stores and
50 stores under the names Harmon or Harmon Face Values, thereby
bringing the total store count to 1,500. 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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