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Bed Bath & Beyond Beat Analysts’ EPS Expectations in Q3 2018

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Third-quarter performance

In the third quarter of 2018, Bed Bath & Beyond (BBBY) posted adjusted EPS of $0.18, outperforming analysts’ EPS expectation of $0.17. However, year-over-year, the company’s EPS fell by 59.1% from $0.44 in the third quarter of 2017.

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Year-over-year EPS decline

The decline in BBBY’s net margins more than offset the positive effects of revenue growth and share repurchases, resulting in a decline in BBBY’s third-quarter EPS. In the last four quarters, the company repurchased 5.9 million shares at the cost of $115.6 million. In the third quarter alone, the company repurchased 527,000 shares for ~$8 million. At the end of the third quarter, the company has ~$1.4 billion still available under its share repurchase program.

Peer comparisons and outlook

During the same period, Williams-Sonoma (WSM) and RH (RH) have posted EPS growth of 10.5% and 66.3%, respectively. For fiscal 2018, BBBY’s management expects its EPS to be around $2.0, which represents a fall of 35.9% from $3.12 in 2017. For fiscal 2019, the company’s management expects its EPS to be the same as that in 2018.

Dividends

On January 9, BBBY’s management announced quarterly dividends of $0.16, which will be paid on April 16, 2019, to shareholders on record as of March 15, 2019. As of January 9, the company’s dividend yield stood at 5.22% with its stock price trading at $12.26. In comparison, the dividend yield of peer Williams-Sonoma was at 3.21% on the same day.

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