Bed, Bath & Beyond Looks Better Than It Is

Same-store sales for the quarter rose 3.5%, compared with a rise of 5.6% in the second quarter a year ago.

For the third fiscal quarter, the company guides earnings in the range of $0.99 to $1.04. For the full fiscal year, Bed, Bath & Beyond expects EPS to rise by “a high single digit to a low double digit percentage range.” The consensus estimate calls for third quarter EPS of $1.02 on revenue of $2.71 billion. For the full year, the consensus EPS estimate is $4.69, which represents a 15.5% increase to the prior year’s EPS total.

The low estimate on full-year EPS is pushing the shares down in after-hours trading. What makes it worse is that the next quarter and the full fiscal year will include the effects of the company’s acquisition of Cost Plus stores. Today’s showing and forecast do not inspire confidence in investors.

The stock now trades down 5.5% at $64.98 in a 52-week range of $53.15 to $75.84.

Paul Ausick