Bed Bath & Beyond
Inc. (BBBY), one of the leading operators of specialty
retail stores in the U.S. and Canada, is scheduled to report its
first-quarter 2012 financial results after the market closes on
June 20, 2012.
The current Zacks Consensus
Estimate for the quarter is 84 cents per share. Meanwhile, the
Zacks Consensus Estimate for revenues is $2,243 million.
Fourth-Quarter 2011 - A
Synopsis
Bed Bath & Beyond reported a
solid fourth-quarter 2011 with respect to earnings growth, cash
flow generation and overall financial strength. Earnings in the
fourth quarter rose 32% to $1.48 per share from the year-ago
earnings of $1.12 a share, easily surpassing its earnings guidance
range of $1.28 and $1.33 per share. Bed Bath & Beyond also
outpaced the Zacks Consensus Estimate of $1.33 per share.
Bed Bath & Beyond's top line
jumped almost 9.1% to $2,732.3 million in the fourth quarter from
$2,505 million in the year-ago quarter. The company's top line also
outdid the Zacks Consensus Estimate of $2,659 million.
Guidance
Accounting for the additional 53rd
week period in fiscal 2012, management forecasts comparable-store
sales increase of 2% to 4% for both first quarter and fiscal 2012.
Consequently, the company expects comparable-store sales to boost
net sales by 4% to 6% in the first quarter and 5% to 7% in fiscal
2012.
Bed Bath & Beyond expects to
deliver first-quarter 2012 earnings per share between 79 cents and
85 cents. Fiscal 2012 earnings per share are projected to increase
by a high-single to a low-double digit percentage, including one
additional week this fiscal year.
Zacks
Consensus
The analysts following the stock
expect Bed Bath & Beyondto post first-quarter 2012 earnings of
84 cents a share, higher than 72 cents delivered in the prior-year
quarter. Currently, the Zacks Consensus Estimate ranges between 82
cents and 88 cents a share.
For fiscal 2012, the Zacks
Consensus Estimate stands at $4.63 per share, higher than the
year-ago fiscal earnings of $4.06. The current Zacks Consensus
Estimate ranges between $4.48 and $4.75 per share.
Agreement of
Estimate
For fiscal 2012, 3 of the 21
analysts covering the stock have revised their estimates upward,
while none have revised their estimates in the downward direction,
over the last 7 and 30 days.
In the last 7 and 30 days, 2
analysts have revised their estimates in the positive direction for
first-quarter 2012, while no movement in estimates has been noticed
in opposite direction.
Magnitude of Estimate
Revisions
The magnitude of estimate revisions
for Bed Bath & Beyond almost depicts a neutral outlook for the
upcoming first quarter and fiscal 2012. Over the last 7 and 30
days, estimates for the upcoming quarter remained unchanged at 84
cents. Whereas, estimates has been moved up by a penny to $4.63 per
share for fiscal 2012, in the last 7 days.
Surprise
History
With respect to earnings surprises,
Bed Bath & Beyond has topped the Zacks Consensus Estimate over
the last four quarters in the range of approximately 8% to 16.1%.
The average remained at 11.5%, indicating that Bed Bath &
Beyond has surpassed the Zacks Consensus Estimate by that measure
in the trailing four quarters.
Our
Recommendation
With a 32% increase in earnings per
share in the fourth quarter of fiscal 2012, Bed Bath & Beyond
has reported twelve consecutive quarters of improving 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 retailerCost Plus Inc.
(CPWM) 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
operated a total of 1,175 stores, including 995 Bed Bath &
Beyond stores, 71 CTS stores, 45 Harmon stores and 64 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 Target Corporation (TGT) and
Wal-Mart Stores Inc. (WMT) 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.
BED BATH&BEYOND (BBBY): Free Stock Analysis Report
COST PLUS INC (CPWM): Free Stock Analysis Report
TARGET CORP (TGT): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis Report
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