Why Bed Bath & Beyond Missed Analysts’ Estimates in 2Q17

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Part 4
Why Bed Bath & Beyond Missed Analysts’ Estimates in 2Q17 PART 4 OF 8

What Analysts Expect from BBBY’s Revenues in the Next 4 Quarters

Revenue expectations

For the next four quarters, analysts expect Bed Bath & Beyond (BBBY) to post revenues of ~$12.3 billion, which represents growth of 0.9% from ~$12.2 billion in the corresponding four quarters of the previous year.

What Analysts Expect from BBBY&#8217;s Revenues in the Next 4 Quarters

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Management guidance

For 2017, BBBY’s management expects its revenue growth to be flat. The company expects to open 25 new stores and close 15 stores in 2017. The net rise in store count is expected to offset negative SSSG to record flat revenue growth.

To drive its sales, BBBY is focusing on personalization, customer contact strategies, improved targeting, channel optimization, and branding activities. To enhance its customer’s online experience, BBBY has been working to improve its search and navigation tools, content, and services. The My Offers and the BEYOND+ membership programs are expected to personalize the customer experience and drive engagement.

BBBY is working on accelerating its SKU onboarding process, which is expected to add more than 300,000 SKUs in 2017. To manage its competitive pricing, BBBY has applied dynamic pricing to more than half of its online-only SKUs and is working on to expand to other SKUs.

In its Furniture and Décor segment, the company has introduced furniture and design bars in a few of its Bed Bath & Beyond stores as well as its buybuy BABY stores. The company has opened its first One Kings Lane’s studio in Southampton, New York. 

BBBY is also expecting to publish its fourth catalog in October 2017. All these initiatives are expected to drive BBBY’s revenue growth in the next four quarters.

Peer comparisons

During the same period, Home Depot (HD), Lowe’s (LOW), and Williams-Sonoma (WSM) are expected to post revenue growth of 5.1%, 2.8%, and 3.2%, respectively.

Next, we’ll look at BBBY’s 2Q17 margins.


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