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What to Expect from BBBY’s 2Q17 Earnings

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Part 2
What to Expect from BBBY’s 2Q17 Earnings PART 2 OF 6

What Are Analysts Expecting from BBBY’s 2Q17 Revenue?

2Q17 revenue expectations

In 2Q17, analysts are expecting Bed Bath & Beyond (BBBY) to post revenue of $3.01 billion, which represents an increase of 0.7% from $3.0 billion in 2Q16.

What Are Analysts Expecting from BBBY&#8217;s 2Q17 Revenue?

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Revenue growth

BBBY’s 2Q17 revenue growth is expected to be driven by the addition of new stores, acquisitions, and positive SSSG (same-store sales growth).

By the end of 1Q17, the company operated 1,546 compared to 1,539 stores in 2Q16. These new stores along with stores opened in 2Q17 are expected to drive BBBY’s 2Q17 revenue. For 2017, the company’s management expects to open 30 new restaurants, while closing 15 to 20 underperforming stores.

BBBY acquired One Kings Lane, an online home décor and designer, on June 13, 2017, and PersonalizationMall.com, an online personalized products retailer, on November 23, 2016. The company also acquired Chef Central, a kitchenware retailer, on January 27, 2017, and Decorist, which provides online personalized home design services, on March 6, 2017. All these acquisitions are expected to boost BBBY’s revenue.

For 2017, the company’s management expects the SSSG to be in the range of flat to slightly positive. To improve its SSSG, BBBY is focusing on improving its online product assortment, content, enhancing search and navigation systems, and creating a more friction-less checkout experience. To improve the relevancy of results, BBBY is implementing machine-learning capabilities.

Also, BBBY is paying attention to personalization, improved targeting, customer contact strategies, channel optimization, and branding activities to improve the effectiveness and efficiency of its marketing campaign. Also, it is expecting the pilot BEYOND+ membership program, which was launched in 1Q17, to drive its SSSG.

Peers’ comparisons

During the same period, Williams-Sonoma (WSM), Lowe’s (LOW), and Home Depot (HD) have posted revenue growth of 3.7%, 6.8%, and 6.2%, respectively.

Outlook

For the next four quarters, analysts are expecting BBBY to post revenues of $12.5 billion, which represents growth of 2.5% from $12.2 billion in the corresponding four quarters of the previous year.

Next, we’ll look at analysts’ estimated margins for 2Q17.

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