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What Drove Bed Bath & Beyond’s EPS in the Fourth Quarter?

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Apr. 11 2019, Published 7:18 a.m. ET

Fourth-quarter EPS

Bed Bath & Beyond (BBBY) posted a loss of $1.92 per share in the fourth quarter. However, removing special or one-time items, the company’s adjusted EPS stood at $1.20, which beat analysts’ expectation of $1.11.

Year-over-year, the company’s EPS fell by 18.9% from $1.48 in the fourth quarter of 2017. The decline in revenue and decline in net margins lowered the company’s EPS during the quarter. However, some of the declines in EPS were offset by share repurchases. BBBY repurchased 9.1 million shares for $148.5 million in 2018, which includes 5.2 million shares for $78 million in the fourth quarter alone.

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Peer comparisons and outlook

During the comparable quarter, the EPS of RH (RH) and Williams-Sonoma (WSM) rose by 77.5% and 25%, respectively. For 2019, BBBY’s management has set its EPS guidance to be in the range of $2.11 to $2.20, which was higher than analysts’ expectation of $1.80. In 2018, the company’s adjusted EPS stood at $2.05. The management expects the company’s financial performance to improve gradually, and the company is expected to post a strong performance in the second half of 2019 due to the timing of transformational initiatives.

Dividends

BBBY’s board increased the company’s quarterly dividends by $0.01 to $0.17 per share, which represents an annualized payout of $0.68. The dividends will be paid on July 16 to shareholders on record as of June 14. As of April 10, the company’s dividend yield stood at 3.5% with its stock price trading at $19.41. On the same day, peer Williams-Sonoma’s dividend yield stood at 3.21%.

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