Bed Bath & Beyond Inc.
), one of the leading operators of specialty retail stores in the
U.S. and Canada, is scheduled to report its second-quarter 2012
financial results following the close of trade on September 19,
We presently expect earnings of $1.02 per share for the quarter,
which is near the higher end of the company's projected earnings
range of 97 cents and $1.03. Meanwhile, the Zacks Consensus
Estimate for revenues is $2,538 million.
Looking Back - First-Quarter 2012
Bed Bath & Beyond reported a solid first-quarter 2012 result
with respect to earnings growth, cash flow generation and overall
financial strength. Earnings in the first quarter rose
approximately 24% to 89 cents per share from the year-ago earnings
of 72 cents, handily surpassing its earnings guidance range of 79
cents and 85 cents per share. Bed Bath & Beyond also outpaced
the Zacks Consensus Estimate of 84 cents per share.
Bed Bath & Beyond's top line augmented almost 5.1% to $2,218.3
million in the first quarter from $2,110 million in the year-ago
quarter. However, the company's top line missed the Zacks Consensus
Estimate of $2,243 million.
Accounting for the additional 53rd week in fiscal 2012, management
forecasts a comparable-store sales increase of 2% to 4% for both
the second quarter and fiscal 2012. Consequently, the company
expects comparable-store sales to boost net sales by 5% to 7% in
the second quarter and 6% to 8% in fiscal 2012.
Bed Bath & Beyond expects to deliver second-quarter 2012
earnings per share between 97 cents and $1.03. Moreover, the
company continues to expect fiscal 2012 earnings per share to
increase by a high-single to a low-double-digit percentage,
including one additional week this fiscal year.
In addition to 12 stores opened so far in 2012, the company expects
to open a total of 40 stores across all concepts in fiscal 2012.
The company expects the 2012 mix of store openings by concept to
remain similar to fiscal 2011.
Agreement of Estimate
For the second quarter of 2012, 1 of the 20 estimates was revised
upwards in the last 30 days and 1 was revised in the opposite
direction. In the last 7 days, 1 estimate moved up, while none
moved down. Estimates for fiscal 2012 witnessed 1 and 2 (out of 19)
upward revisions in the last 7 and 30 days, respectively, with no
For fiscal 2013, in both 7 and 30 days, 1 out of 17 estimates moved
in the positive direction, while there were no negative revisions.
Magnitude of Estimate Revisions
The magnitude of estimate revisions for Bed Bath & Beyond
almost depicts a neutral outlook for the upcoming quarter and
fiscal 2012. Over the last 7 and 30 days, estimates for the
upcoming quarter and fiscal 2012 remained unchanged at $1.02 and
$4.68, respectively. However, estimates moved down by 2 cents to
$5.17 per share for fiscal 2013 in the last 30 days, while it
remained stable in the last 7 days.
With respect to earnings surprises, Bed Bath & Beyond has
topped the Zacks Consensus Estimate over the last four quarters in
the range of approximately 5.95% to 11.28%. The average remained at
8.97%, indicating that Bed Bath & Beyond has surpassed the
Zacks Consensus Estimate by that measure in the trailing four
With an escalation of 24% in earnings per share in the first
quarter of fiscal 2012, Bed Bath & Beyond has been continuously
posting an improving earnings trend. Driven by its strong
countrywide network of more than 1,100 stores coupled with
strategic efforts to align merchandise based on regional climate
and demographics, we believe the company will continue to boost its
top- and bottom line.
Moreover, the company's recent deal to acquire one of the leading
casual home furnishings and entertainment products retailer, Cost
Plus Inc. is expected to be accretive to the merged company's
fiscal 2012 earnings per share. The acquisition, which is expected
to close during second-quarter 2012, is anticipated to increase Bed
Bath & Beyond's fiscal 2012 earnings in the high-single digit
to low double-digit percentage range.
Bed Bath & Beyond Inc. offers merchandise under Bed Bath &
Beyond, Harmon, Christmas Tree Shops (CTS) and buybuy BABY stores.
The New Jersey-based company operates a total of 1,180 stores,
including 995 Bed Bath & Beyond stores, 72 CTS stores, 45
Harmon stores and 68 buybuy BABY stores spread across 50 states of
the US, the District of Columbia, Puerto Rico and Canada. Apart
from this, the company operates two retail stores in Mexico City
under the name Home & More through a joint venture.
Bed Bath & Beyond operates in a highly fragmented industry and
faces competition from larger retailers such as
Wal-Mart Stores Inc.
) as well as from departmental and specialty stores.
Currently, Bed Bath & Beyond holds a Zacks #2 Rank, implying a
short-term Buy rating on the stock. However, the company retains a
long-term Neutral recommendation on the stock.
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