Bed, Bath & Beyond Looks Better Than It Is

Bed, Bath & Beyond Inc. (NASDAQ: BBBY) reported fiscal 2012 second quarter earnings after markets closed today. The home furnishings company reported earnings per share (EPS) of $0.98 on revenue of $2.59 billion. In the same period a year ago, the company reported EPS of $0.93 on revenue of $2.31 billion. Second-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.02 and $2.54 billion in revenue.

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