Bed Bath & Beyond, Bracing For Earnings (BBBY)

Bed Bath & Beyond, Inc. (NASDAQ: BBBY) is set to report earnings for its Feb-2008 fiscal fourth quarter today after the close.  First Call has estimates at $0.65 EPS on $1.96 Billion in revenues for the quarter.  As far as guidance or estimates ahead, its fiscal first quarter is expected to see $0.36 EPS on $1.65 Billion in revenues.  If the home furnishings retail giant is willing to go out on the limb with guidance for the next year, First Call has its fiscal Feb-2009 estimates at $2.15 EPS on revenues of $7.6 Billion.  As far as how that compares to today’s fiscal end expectations, that would represent roughly a 3% gain on EPS on slightly more than an 8% gain in revenues.

Analysts have gone more cautious on this one in recent months, and the average price target from analysts is just north of $30.00.  As a reminder, this was just downgraded over the last two weeks by JPMorgan (from Neutral to underweight).  Options traders appear to be braced for this stock to move more than $1.00 in either direction based on a static snapshot of early afternoon put/call prices today. 

The chart for Bed Bath & Beyond shows an old retail growth stock that has become just another cyclical play.  In recent weeks shares are up close to 10%, but that is well off of recent highs around $32.00.  The 50-day moving average is $29.92 and the 200-day moving average is $32.10.

We’d caution that some of these last minute numbers may be out of normal pre-earnings comparison.  The culprit for today’s 5% drop to $29.35 is a downgrade just this morning from Piper Jaffray.  That may throw many of the last minute figure off the mark.  Its 52-week trading range is $24.49 to $41.90. 

Jon C. Ogg
April 9, 2008

Jon Ogg produces the Special Situation Investing Newsletter.  He can be reached at [email protected] and he does not own securities in the companies he covers.