Bed Bath & Beyond (BBBY) posted EPS (earnings per share) of $1.41 in 4Q17. However, removing one-time or special items, the company’s adjusted EPS stood at $1.48, which represents a fall of 19.6% from $1.84 in 4Q16. However, the company’s 4Q17 EPS was better than analysts’ expectation of $1.39.
The decline in BBBY’s net margins has led to a fall in its 4Q17 EPS. However, some of the declines were offset by revenue growth and share repurchases. The company has repurchased approximately 8 million shares in 2017 for approximately $252.3 million. By the end of 2017, the company had approximately $1.5 billion in its share repurchase program. Share repurchases drive a company’s earnings by lowering the number of shares outstanding. From the above graph, we can see that the company has outperformed analyst estimates three times in the last five quarters.
Peers comparisons and outlook
In 4Q17, Williams-Sonoma (WSM), Lowe’s (LOW), and Home Depot (HD) posted EPS growth of 8.4%, -14%, and 17.4%, respectively. For 2018, analysts are expecting BBBY to post EPS of $2.35, which represents a fall of 28.1% from $3.27 in 2017. The company’s management expects its 2018 EPS to be in the low-to-mid $2 range.
BBBY’s management has announced quarterly dividends of $0.16 per share compared to $0.15 in the previous quarter. The dividends will be paid on July 17, 2018, to shareholders on record as of June 15, 2018. The dividends were announced at a payout ratio of 23.2%, and its dividend yield was 3.7% given the stock price of $17.21.
Next, we’ll look at BBBY’s valuation multiples.