Bed Bath & Beyond Inc.
), the operator of home furnishing store chains, is slated to
report its third-quarter fiscal 2013 results on Jan 8, 2014. In
the last quarter, it posted a marginally positive surprise of
0.87%. Let's see how things are shaping up for this announcement.
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Factors this Past Quarter
Though Bed Bath & Beyond managed to deliver positive earnings
and sales surprises in second-quarter fiscal 2013, the company's
margins remained soft during the quarter due to higher operating
costs, increase in coupons and their redemption, higher markdowns
and shift in the mix of merchandise sold to lower margin
categories. We believe this weakness should continue in the
quarters ahead due to recurrence of the above factors through
fiscal 2013 as well as the ongoing consolidation of World Market
and Linen Holdings.
Our proven model does not conclusively show that Bed Bath &
Beyond is likely to beat earnings estimates this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, #2 or #3 for this to happen. This is not the
case here, as you will see below.
ESP for Bed Bath & Beyond is 0.00%. This is because the Most
Accurate estimate stands at $1.15 cents, which is in line with
the Zacks Consensus Estimate.
Zacks Rank #4 (Sell):
Bed Bath & Beyond's Zacks Rank #4 when combined with a
negative ESP makes surprise prediction difficult. We caution
against stocks with a Zacks Ranks #4 and #5 (Sell rated stocks)
going into the earnings announcement, especially when the company
is seeing negative estimate revisions momentum.
Stocks that Warrant a Look
Here are some other companies you may want to consider as our
model shows they have the right combination of elements:
American Express Company
) has an Earnings ESP of +1.59% and a Zacks Rank #2 (Buy).
Dollar Tree Inc.
) has an Earnings ESP of +2.80% and a Zacks Rank #3 (Hold).
) has an Earnings ESP of +1.84% and a Zacks Rank #3 (Hold).