How Did Bed Bath & Beyond Fare in the Fourth Quarter?



Fourth-quarter performance

Bed Bath & Beyond (BBBY) posted fourth-quarter earnings after the market closed on April 10. The company posted adjusted EPS of $1.20 on revenues of $3.31 billion. Year-over-year, the company’s EPS fell by 18.9%, while its revenue declined by 11.0%.

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Stock performance

During the quarter, BBBY beat analysts’ EPS expectation of $1.11, while its revenue fell short of analysts’ expectation of $3.33 billion. The company’s SSSG (same-store sales growth) fell 1.4% during the quarter against analysts’ expectation of a decline of 1.3%. After posting its fourth-quarter results on April 10, the company’s management set EPS guidance for 2019 to be in the range of $2.11 and $2.20, which was above analysts’ expectation of $1.80.

Despite providing positive guidance for 2019, BBBY’s stock fell in aftermarket trading on April 10. During the earnings call, the company announced that its board would make changes to its composition, governance structure, and compensation practices. The board also stated that it would accelerate its board refreshment program, thus bringing in new faces. However, these initiatives failed to impress investors, who were expecting more concrete solutions to improve the company’s performance, leading to a fall in the company’s stock price. BBBY’s stock fell ~9.4% in yesterday’s aftermarket trading hours.

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Year-to-date performance

After losing 48.5% of its value in 2018, BBBY’s stock has risen 71.5% in 2019 as of April 10. During the same period, Williams-Sonoma (WSM) and RH (RH) have returned 18.6% and -3.6%, respectively. The broader comparative index, the SPDR S&P Homebuilders ETF (XHB), which invests in home improvement and home furnishing companies, has returned 23.6%.

Series overview

In this series, we’ll analyze BBBY’s performance and compare it with analysts’ expectations. We will also cover the management’s guidance for 2019.


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