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Should You Stay Away from Bed Bath & Beyond for Now?
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Are troubles over for Bed Bath & Beyond Inc. ? Apparently not, as the stock remains deeply entrenched in the bearish territory and has lost nearly 31% in the past one year. Moreover, it carries a Zacks Rank #4 (Sell) and currently, the share price is hovering close to its 52-week low of $41.15.
What’s Leading Bed Bath & Beyond to the Bearish Territory?
Bed Bath & Beyond, which offers domestic merchandise and home furnishing products, continue to be impacted by sluggish mall traffic and high promotional costs. On top of that, due to its exposure to global markets, this retail stores’ operator is highly prone to various risks associated with international operations like currency headwinds.
Additionally, the seasonal nature of Bed Bath & Beyond’s business may significantly impact results if any particular season fails to deliver. Notably, the company generates stronger results in the second and fourth quarters.
Meanwhile, Bed Bath & Beyond faces fierce competition from online giants like Amazon.com, Inc. (AMZN - Free Report) . Also, intense sales promotions and a shift from the brick-and-mortar store concept to online, have been weighing on the company’s margins. Alongside, its margins remain pressurized, mainly due to soft merchandise margins and a rise in coupon costs.
All these factors hurt the company’s quarterly performance when it posted dismal results in first-quarter fiscal 2016, wherein both top and bottom lines fell short of estimates. Additionally, the company's lowered comparable store sales view, expectations of SG&A expense and gross margin deleverage for fiscal 2016 raise concerns.
Nonetheless, Bed Bath & Beyond remains focused on strategic initiatives such as store expansion, eCommerce enhancement as evident from the buyout of One Kings Lane and improvement of customer services. However, only time will tell whether these endeavors are enough to bring the company back in investors’ good books when it reports second-quarter fiscal 2016 results next week. For now shift your focus to better-ranked retail stocks.
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Should You Stay Away from Bed Bath & Beyond for Now?
Are troubles over for Bed Bath & Beyond Inc. ? Apparently not, as the stock remains deeply entrenched in the bearish territory and has lost nearly 31% in the past one year. Moreover, it carries a Zacks Rank #4 (Sell) and currently, the share price is hovering close to its 52-week low of $41.15.
What’s Leading Bed Bath & Beyond to the Bearish Territory?
Bed Bath & Beyond, which offers domestic merchandise and home furnishing products, continue to be impacted by sluggish mall traffic and high promotional costs. On top of that, due to its exposure to global markets, this retail stores’ operator is highly prone to various risks associated with international operations like currency headwinds.
Additionally, the seasonal nature of Bed Bath & Beyond’s business may significantly impact results if any particular season fails to deliver. Notably, the company generates stronger results in the second and fourth quarters.
Meanwhile, Bed Bath & Beyond faces fierce competition from online giants like Amazon.com, Inc. (AMZN - Free Report) . Also, intense sales promotions and a shift from the brick-and-mortar store concept to online, have been weighing on the company’s margins. Alongside, its margins remain pressurized, mainly due to soft merchandise margins and a rise in coupon costs.
All these factors hurt the company’s quarterly performance when it posted dismal results in first-quarter fiscal 2016, wherein both top and bottom lines fell short of estimates. Additionally, the company's lowered comparable store sales view, expectations of SG&A expense and gross margin deleverage for fiscal 2016 raise concerns.
BED BATH&BEYOND Price, Consensus and EPS Surprise
BED BATH&BEYOND Price, Consensus and EPS Surprise | BED BATH&BEYOND Quote
Nonetheless, Bed Bath & Beyond remains focused on strategic initiatives such as store expansion, eCommerce enhancement as evident from the buyout of One Kings Lane and improvement of customer services. However, only time will tell whether these endeavors are enough to bring the company back in investors’ good books when it reports second-quarter fiscal 2016 results next week. For now shift your focus to better-ranked retail stocks.
Stocks That Warrant a Look
Some better-ranked stocks in the same industry include Big 5 Sporting Goods Corp. (BGFV - Free Report) and Five Below, Inc. (FIVE - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>