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Did Bed Bath & Beyond Meet Analysts’ Earnings Estimate in 4Q17?

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Apr. 17 2018, Updated 7:32 a.m. ET

4Q17 performance

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.

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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.

Dividends

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.

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