Will BBBY’s 2Q17 Earnings Boost Its Stock Price?
American home furnishing and domestics merchandising company Bed Bath & Beyond (BBBY) is scheduled to announce its 2Q17 earnings after the market closes on September 19, 2017.
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In 1Q17, BBBY posted adjusted EPS (earnings per share) of $0.58 on revenue of $2.7 billion. Analysts had projected the company would post EPS of $0.66 on revenue of $2.8 billion. Also, the company’s same-store sales growth (or SSSG) fell 2.0%. The negative SSSG and lower-than-expected 1Q17 earnings appear to have lowered investors’ confidence, leading to a fall in BBBY’s stock price. As of September 12, 2017, BBBY was trading at $29.01, which represents a decline of 14.0% since the announcement of its 1Q17 earnings on June 22, 2017.
BBBY is struggling to compete against e-commerce giant Amazon (AMZN). The entry of Amazon has curbed the pricing power of home improvement retailers, thus lowering their margins, which has led to a fall in BBBY’s stock price. Since the beginning of 2017, the stock price of the company has fallen 28.6%. During the same period, stocks of peers Williams-Sonoma (WSM), Lowe’s (LOW), and Home Depot (HD) have returned 1.6%, 10.6%, and 19.3%, respectively.
The SPDR S&P Homebuilders ETF (XHB) and the S&P 500 Index (SPX) have returned 16.6% and 11.5%, year-to-date, respectively. XHB has invested approximately 23% of its holdings in home improvement retailers.
In this series, we’ll look at analysts’ 2Q17 revenue and EPS expectations. We’ll also cover management’s 2017 guidance and include analysts’ estimates for the next four quarters. We’ll end this series by looking at BBBY’s valuation multiple and analysts’ recommendations.
First, let’s discuss analysts’ 2Q17 revenue expectations.