If Bed Bath & Beyond is Warning, Who’s Next? (BBBY)

By Douglas A. McIntyre Published Jun 5, 12:37AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Bed Bath & Beyonds (BBBY-NASDAQ) is apparently feeling the same consumer pinch as elsewhere, it guided $0.36-0.38 EPS versus $0.39 estimates and guided same-store-sales for the quarter down to up 1.6% from a prior 3% to 5% range.

Steven H. Temares, CEO stated, "Based upon what we have experienced and has been reported by others, the overall retailing environment, especially sales of merchandise related to the home, has been challenging. The efforts of our associates and their ability to execute remain at high levels. We continue to base our decisions upon what is necessary to achieve our long-term objectives. While we did not achieve all of our financial goals during our initial fiscal quarter of 2007, we remain optimistic that this year will be our best ever."

Here is the problem though: Even though this company has been dead money, it rarely has to issue an outright warning and rarely misses its targets (even if because of crafty guidance management). Shares closed down marginally at $40.47 on Monday and have been mostly in a $35.00 to $45.00 trading range for most of the last 4 years after a meteoric rise in the 1990’s. If you’ve ever been in a Bed Bath & Beyond, you’ll know that this is the ultimate ‘nesting’ shop and if Bed Bath & Beyond is seeing a fall-off then there are others behind it.

If its gets cheap enough this might start to look attractive to private equity on a cashflow and earnings ex-Cap-ex and on an EBITDA basis, but if they are going to slow too much then it may be a while before this starts to make sense. This may take out some near-term private equity speculation in the retail and ‘nesting’ plays.

Jon C. Ogg
June 5, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.