What to Look for in Bed Bath & Beyond Earnings

Bed Bath & Beyond Inc. (NASDAQ: BBBY) is scheduled to release its fiscal first-quarter financial results after the markets close on Wednesday. Consensus estimates from Thomson Reuters call for $0.86 in earnings per share (EPS) on $2.78 billion in revenue. That would compare with the $0.93 in EPS on $2.74 billion posted in the same period of last year.

This retail giant of household products has been public for almost 25 years now. Bed Bath & Beyond had a very strong growth story for years, but that was before its recent spate of problems meeting earnings estimates or keeping guidance up. The company has turned to stock buybacks to boost earnings and shrink its float, but it gets to keep buying back stock at lower and lower share prices due to those disappointing headwinds.

Bed Bath & Beyond shares peaked at roughly $70 but had dipped back to under $50 by the start of 2016 and mostly stayed there so far this year. Analysts have seemingly thrown in the towel and revenue growth has all but stalled. Still, with $5.00 or more in EPS power and only $1.5 billion in long-term debt, this retail giant needs to start paying a dividend now that its growth prospects seem to have peaked.

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Prior to the release of the earnings report, a few analysts weighed in on the company:

• Longbow Research initiated coverage with a Neutral rating.
• Credit Suisse initiated coverage with a Hold rating.
• Merrill Lynch reiterated a Sell rating.
• Nomura reiterated a Neutral rating with a $50 price target.
• Wedbush reiterated a Neutral rating with a $46 price target.
• Barclays reiterated an Equal Weight rating with a $50 price target.
• BTIG initiated coverage with a Neutral rating.

So far this year, Bed Bath & Beyond has underperformed the broad markets, with the stock down about 10%. Over the past year, the stock is down as much as 38%.

Shares of Bed Bath & Beyond were trading at $43.64 on Wednesday. The stock has a consensus analyst price target of $47.74 and a 52-week trading range of $41.26 to $71.20.

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