Bed Bath & Beyond Beats

Bed Bath & Beyond Inc. Beats Consensus Estimates, Shares Rise

On June 24, Bed Bath & Beyond, Inc. (BBBY - Analyst Report) released earnings results for the first quarter ended May 30, 2009.

The company performed above expectations. It reported a net income of $87.2 million or $0.34 per share, compared to $76.8 million or $0.30 per share the same quarter a year ago, thus beating the consensus EPS estimate by 9 cents. The company has beaten consensus estimates in each of the last three quarters.

Net sales rose by 2.8% to $1.69 billion, up from $1.65 billion, which again was slightly above the consensus estimate of $1.68 billion. However, same-store sales declined by a less-than-expected 1.6%. Same-store sales have declined in five of the past six quarters, after having risen every quarter since the company went public in 1992.

The sales results show that the company has benefited from the bankruptcy filed by peer Linens 'n Things last May, as it has helped the company to cut down on advertising expenses. BBBY has also reduced payroll expenses.

The global recession has reduced consumer spending to necessities and has hit the home decor retail segment very hard. In general, BBBY and other home goods retailers are struggling with excess inventories and declining demand for home goods and furniture amid a struggling housing market. The strong showing of BBBY in such a scenario has resulted in the appreciation of its shares by 9%, closing June 25 at $31.08.

As such the consensus estimate for BBBY shares is Hold.

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