What to Watch When Bed Bath & Beyond Reports Late Wednesday

Retail

Published: January 6, 2020 1:00 pm

Last Updated: January 30, 2020 11:32 am

Bed Bath & Beyond Inc. (NASDAQ: BBBY) is set to release its fiscal third-quarter earnings report on Wednesday after the markets close. The consensus analyst forecast is $0.02 in earnings per share (EPS) and $2.85 billion in revenue. The same period of last year had $0.18 in EPS and $3.03 billion in revenue.

The company has just closed a huge sale-leaseback transaction, generating over $250 million in net proceeds. Overall, Bed Bath & Beyond sold roughly 2.1 million square feet of commercial space, including retail stores, a distribution facility and office space. The company will continue to occupy these properties pursuant to long-term leases.

The proceeds from this transaction may be used to reinvest in the company’s core business operations/ongoing business transformation efforts to drive growth, fund share repurchases, reduce the outstanding debt or some combination of these options.

Mark Tritton, Bed Bath & Beyond president and chief executive, commented:

We are pleased to complete this sale-leaseback transaction. This marks the first step toward unlocking valuable capital in our business that can be put to work to amplify our plans to build a stronger, more efficient foundation to support revenue growth, financial stability and enhance shareholder value.

Excluding Monday’s move, Bed Bath & Beyond had outperformed the broad markets, with its stock up about 40% in the past 52 weeks. Over the past quarter, the stock was up closer to 56%.

Here’s what a few analysts had to say ahead of the report:

Merrill Lynch has a Buy rating and a $24 price target.
Loop Capital has a Hold rating with a $15 price target.
Telsey Advisory Group rates it as Outperform with an $18 target.
Wedbush’s Outperform rating comes with an $18 price target.
Raymond James has a Buy rating.

Shares of Bed Bath & Beyond traded up about 4% to $16.76 on Monday. The 52-week range is $7.31 to $19.57, and the consensus price target is $14.46.

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