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Bed Bath & Beyond Falls after Dismal Preliminary Q3 View

Shares of Bed Bath & Beyond Inc.BBBY declined 6.3% yesterday in the after hour trading session after the company lowered its third-quarter fiscal 2015 projections. The company also provided update on the comparable sales for the fourth quarter of fiscal 2015.

Bed Bath & Beyond expects net sales for the third quarter to increase nearly 0.3% year over year to $3 billion, sharply lower than its previous estimate of increase in the range of nearly 1.8% to 4%. The company has also revised its comparable store sales estimates and now expects comparable stores sales to decrease 0.4% in comparison to the company's previous estimate of increase in the range of 1% to 3%.

Consequently, the company also lowered the earnings estimates for the third-quarter of fiscal 2015. The company now expects net earnings per share in the range of $1.07 to $1.10, well below the company's previous estimate of around $1.14 to $1.21. The Zacks Consensus Estimate for the third-quarter of fiscal 2015, which is pegged at $1.18, may witness downward estimate revision in the coming days.

Lower-than-expected third-quarter estimate was primarily due to weaker in-store transaction counts as well as overall softness in the retail sector in the third quarter. On the positive side, the company's online sales reported robust growth of over 25%. The company expects comparable sales from the starting of the fourth-quarter of fiscal 2015 to increase roughly 1%.

Although, the company trimmed its guidance we cant's ignore its strategic initiatives, including store expansion, eCommerce enhancement and improvement of customer services that may act as a catalyst future.

Zacks Rank

Bed Bath & Beyond currently has a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in this sector include Regis Corp. RGS , CST Brands, Inc. CST and ULTA Salon, Cosmetics & Fragrance, Inc. ULTA . Regis sports a Zacks Rank #1 (Strong buy) whereas CST Brands and ULTA Salon, Cosmetics & Fragrance holds a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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