Can Bed Bath & Beyond’s 4Q17 Earnings Boost Its Stock?



Stock performance

Bed Bath & Beyond (BBBY), an American home furnishing company, is scheduled to announce its 4Q17 earnings after the market closes on April 11, 2018.

In 3Q17, it posted adjusted EPS (earnings per share) of $0.44 on revenues of ~$3 billion. Analysts were expecting the company to post adjusted EPS of $0.38 on revenue of $2.9 billion. Although Bed Bath & Beyond’s earnings were better than analysts’ expectations, the stock fell due to an increase in marketing and promotional spending and a decline in margins. A weakness in the broader equity market due to trade tensions between the United States and China have also contributed to a fall in the stock. As of April 5, 2018, BBBY was trading at $21.54, which represents a fall of 2% since the announcement of its 4Q17 earnings on December 20, 2018.

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Year-to-date performance

Bed Bath & Beyond had a tough year in 2017. The stock fell 45.9%. Since the beginning of 2018, BBBY stock has fallen 2%. Its peers Williams-Sonoma (WSM), Lowe’s (LOW), and Home Depot (HD) have returned 0.5%, -4.5%, and -5.5%, respectively, year-to-date. The S&P 500 and the SPDR S&P Homebuilders ETF (XHB) have fallen 0.4% and 5.6%, respectively.

Series overview

In this series, we’ll look at analysts’ revenue and EPS expectations for 4Q17. We’ll also look at BBBY management’s guidance for 2017 and analysts’ estimates for the next four quarters. Finally, we’ll look at the company’s valuation multiple and analysts’ recommendations.

Let’s start by looking at analysts’ revenue expectations for 4Q17.


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