Bed, Bath & Beyond Share Buybacks Tipped the Scale

Retail

Published: September 23, 2014 4:42 pm

Last Updated: April 27, 2020 5:25 pm

Bed, Bath & Beyond Inc. (NASDAQ: BBBY) reported fiscal second quarter 2014 earnings after markets closed Tuesday. The home furnishings company reported diluted earnings per share (EPS) of $1.17 on revenue of $2.95 billion. In the same period a year ago, the company reported EPS of $1.16 on revenue of $2.82 billion. First-quarter results compare to the Thomson Reuters consensus estimates for EPS of $1.14 and $2.89 billion in revenue.

Same-store sales for the quarter rose 3.4%, compared with a rise of 3.7% in the first quarter a year ago.

For the third quarter, the company guides earnings in the range of $1.17 to $1.21. For fourth fiscal quarter, the company expects earnings of $1.78 to $1.83 per share, and the full-year estimate now calls for EPS of $5.00 to $5.08.The consensus estimates called for third quarter EPS of $1.20 and full-year EPS of $5.03.

The company repurchased approximately $1 billion in common stock during the quarter and has $1.8 billion remaining in a $2 billion share buyback program that was approved in July.

When it reported first quarter results, Bed, Bath & Beyond estimated second quarter earnings in a range of $1.08 to $1.16. Analysts cut earnings estimates back from $1.20 three months ago and lowered the consensus to $1.14 30 days ago. Given the beating the company took when it missed estimates in the first quarter, managing expectations was clearly a goal for the second quarter.

It’s also worth noting that the $1 billion stock buyback during the quarter was nearly 4-times the size of the first quarter’s $273 million in share repurchases. In its announcement the company said, “The timing and amount of the Company’s share repurchases impacts the quarterly and full year diluted weighted average shares outstanding differently with the impact on the individual quarters being greater than the impact on the full year.” The firm said it would discuss its forecasting model during the conference call scheduled for later this afternoon.

Shares are trading sharply higher in after-hours trading Tuesday, up nearly 7% at $67.05, in a 52-week range of $54.96 to $80.82. Thomson Reuters had a consensus analyst price target of around $64.90 before today’s results were announced.

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