Bed Bath & Beyond (BBBY) reported adjusted EPS (earnings per share) of $0.44 in 3Q17, which represents a fall of 48.2% from $0.85 in 3Q16. However, it outperformed analysts’ estimate of $0.37.
The fall in BBBY’s net margins offset the positive effects of share repurchases to post a decline in EPS. During the last four quarters, the company has repurchased 10.1 million shares, spending approximately $379.2 million. By the end of 3Q17, it had about $1.5 billion in its share repurchase program. Share repurchases reduce the number of shares outstanding, thus boosting the company’s EPS.
After posting its 3Q17 earnings, BBBY management maintained its EPS guidance for 2017 at $3, which represents a fall of 34.5% from $4.58 in 2016.
For the next four quarters, analysts are expecting the company to post EPS of $2.74, which represents a fall of 24.5% from $3.63 in the corresponding four quarters of the previous year.
BBBY has announced dividends of $0.15 per share to be paid on April 17, 2018, to shareholders of record as of March 16, 2018. It announced its dividends at a yield of 2.8% and a payout ratio of 20.1%. For 4Q17, analysts are expecting the company to pay dividends of $0.15 to take the total for 2017 to $0.60, which represents a growth of 20% from $0.50 in 2016.
Next, we’ll look at BBBY’s valuation multiple.