Tuesday, June 21, 2011

Bed Bath & Beyond, Inc. (NASDAQ: BBBY): Q1 Earnings Preview 2011

Bed Bath & Beyond, Inc. (NASDAQ: BBBY) is scheduled to release its first-quarter earnings after the closing bell on Wednesday, June 22, 2011. Analysts, on average, expect the company to report earnings of 63 cents per share on revenue of $2.08 billion. In the year ago period, the company reported earnings of 52 cents per share on revenue of $1.92 billion.

Bed Bath & Beyond Inc., along with its subsidiaries, is a chain of retail stores, operating under the names Bed Bath & Beyond, Christmas Tree Shops, Harmon and Harmon Face Values and buybuy BABY. In addition, the Company is a partner in a joint venture, which operates two stores in the Mexico City market under the name Home & More. 

In the preceding fiscal fourth-quarter, the New Jersey-based company's net income was $283.5 million or $1.12 per share, compared with $226.0 million, or $0.86 per share, in the prior-year quarter. Revenue grew 11.6% to $2.50 billion from $2.24 billion in the prior year quarter. Analysts, on average, expected the company to report earnings of 97 cents per share on revenue of $2.39 billion. 

At its last earnings call in April, the company said that it expects first-quarter earnings per share to be in the range of 58 cents to 61 cents. For full year, net earnings per share is expected to increase by about 10% to 15%. The company also said it expects net sales to rise at a mid-single-digit rate during the current first quarter and the full year, and is modeling same-store sales increases of 2 percent to 4 percent for the same periods. The company also said it expects to open 45 new stores this year across all its store chains, which also include Christmas Tree Shops and buybuy Baby, and expects to continue renovating and relocating existing stores.

The company has benefited from a recovery in consumer spending. Sales at home goods chains suffered during the housing downturn and recession, as consumers tightened their belts and spent only on basics. They are now showing more interest in spending on their homes as they spent more time at home.

Bed Bath represents a strong brand with solid growth opportunities. A brisk expansion strategy, debt-free balance sheet and strong cash position augur well for the company’s future operating performance. However, intense competition from department stores, specialty stores and mass merchandisers will likely  to continue hurt BBBY’s growth. The company's goal is to gain market share at the expense of department-store rivals such as Macy's (NYSE:M) and specialty retail competitors that include Williams-Sonoma (NYSE:WSM), Pier 1 Imports (NYSE:PIR) and even mass chains such as Wal-Mart (NYSE:WMT).

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire