Will Bed Bath & Beyond (BBBY) Miss Earnings? - Analyst Blog

By
A A A

Bed Bath & Beyond Inc. ( BBBY ) is scheduled to report its fourth-quarter fiscal 2013 results after the market closes on Apr 9. Last quarter, this home-furnishing retailer posted a negative earnings surprise of approximately 2.61%. Let's see how things are shaping up for this announcement.

Growth Factors in the Past Quarter

Bed Bath & Beyond reported dismal third-quarter fiscal 2013 with lower-than-expected top and bottom line results, while it surpassed the prior-year quarter results. The upside in year over year sales was primarily driven by the inclusion of World Market and Linen Holdings, an increase in comparable-store sales (comps) and new store openings. Further, the company lowered its fourth quarter and fiscal year forecasts for almost every component of the income statement.

Moreover, in the beginning of March, Bed Bath & Beyond further lowered its earnings projections for the fourth quarter along with the below-expected preliminary comps results due to the chilly, harsh winter weather that dampened the January and February sales results.

Earnings Whispers?

Our proven model does not conclusively project Bed Bath & Beyond as likely to beat earnings this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 to surpass earnings estimates. However, this is not the case here due to the following factors:

Zacks ESP: ESP for Bed Bath & Beyond is 0.00% since the Most Accurate estimate stands at $1.60 per share, which is in line with the Zacks Consensus Estimate.

Zacks #3 Rank (Hold): Bed Bath & Beyond's Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise call. We caution against stocks with a Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is undergoing negative estimate revisions.

Other Stocks to Consider

Bed Bath & Beyond is not the only firm we are looking up to this earnings season. Our model shows that the following stocks have the right combination to post an earnings beat:

Interactive Brokers Group Inc. ( IBKR ) Earnings ESP stands at +13.79% and it carries a Zacks Rank #2 (Buy).

Chipotle Mexican Grill Inc. ( CMG ) has an Earnings ESP of +1.06% and a Zacks Rank #3 (Hold).

Zep Inc. ( ZEP ) with an Earnings ESP of +11.11% holds a Zacks Rank #3 (Hold).




BED BATH&BEYOND (BBBY): Free Stock Analysis Report

CHIPOTLE MEXICN (CMG): Free Stock Analysis Report

INTERACTIVE BRK (IBKR): Free Stock Analysis Report

ZEP INC (ZEP): Free Stock Analysis Report

To read this article on Zacks.com click here.



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 , Business , Earnings , Stocks

Referenced Stocks: BBBY , CMG , IBKR , ZEP

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Vox Media Acquires Re/Code
Vox Media Acquires Re/Code          

Stocks

Referenced

Most Active by Volume

62,785,261
  • $16.7344 ▲ 1.42%
61,357,890
  • $45.95 ▼ 24.16%
58,875,487
  • $56.90 ▲ 21.27%
40,303,685
  • $132.0116 ▲ 1.85%
36,122,438
  • $5.285 ▲ 7.42%
27,540,845
  • $8.595 ▲ 1.00%
27,111,666
  • $35.045 ▲ 1.08%
25,882,062
  • $72.88 ▲ 1.05%
As of 5/27/2015, 03:57 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com