We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Bed Bath & Beyond (BBBY) is Declining Post Earnings
Read MoreHide Full Article
Dark clouds are looming over the horizon for home furnishing retailer, Bed Bath & Beyond Inc. at the moment with no silver lining in sight. Even a week after third-quarter fiscal 2016 earnings, the company’s shares continue to decline as investor’s see no hope of revival in its top and bottom-line performance. Further, shares of this Zacks Rank #5 (Strong Sell) company have been trending down in the year-to-date period.
Evidently, the company’s stock has declined 10.3% in the last one week, 10% in the past month and 15.3% year to date. On comparison with the Zacks categorized Retail – Miscellaneous/Diversified industry, we see the stock has significantly underperformed the industry’s decline of 4.2% in the last one week and 3.7% in the past one month. Further, it has lagged the industry’s growth of 6.8% in the year-to-date period.
Moreover, the chances of a rebound in the stock price seem minimal as its broader industry occupies a space in the bottom 50% of the Zacks Classified industries.
What’s Behind the Decline?
Last week, Bed Bath & Beyond reported dismal third-quarter fiscal 2016 results, wherein both top line and bottom line missed our estimates for the third time in a row. The company’s quarterly earnings of 85 cents per share declined nearly 22% year over year and were substantially below the Zacks Consensus Estimate of $1.00. Further, net sales of $2,955.5 million fell short of the Zacks Consensus Estimate of $3,058 million but climbed by a marginal 0.1%, year over year.
The company continued to reel under the impact of sluggish mall traffic, which more than offset online sales growth in third-quarter fiscal 2016. Sales were hurt by softness in comparable store sales (comps), which dropped roughly 1.4% in the quarter. While comps from customer-facing digital networks improved more than 20%, comps at stores fell at a low-single digit rate.
Further, the company provided a dismal outlook for fiscal 2016. Based on the quarter-to-date fourth-quarter comps performance and expectations for the holiday season, it expects comps to decline 50 basis points in fiscal 2016, along with a sales growth of just 1%.
Moreover, the company envisions fiscal 2016 earnings per share to be at the lower end of its historical range of $4.50 to a little over $5.00.
This has definitely induced a negative sentiment among analysts for the company, evident from the downward estimate revisions for the fourth quarter and fiscal 2016. In the last seven days, the Zacks Consensus Estimate for the fourth quarter dipped 2.7% to $1.79 per share, while the estimate for fiscal 2016 declined 3% to $4.52 per share.
However, Bed Bath & Beyond remains committed toward driving long-term growth on the back of its strategic investments, omni-channel development and enhancement of its product assortments through innovation. Moreover, the company’s constant shareholder-friendly moves are commendable.
Nonetheless, given the soft near-term view we remain cautious on the stock’s performance in the near future.
Stocks to Consider
Meanwhile, investors may consider investing in some favorably-ranked stocks in the same industry including Big 5 Sporting Goods Corp. (BGFV - Free Report) , sporting a Zacks Rank #1 (Strong Buy), DICK’s Sporting Goods Inc. (DKS - Free Report) and ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting, with a long-term earnings growth rate of 12%, has surged a whopping 76.2% year to date.
DICK’S Sporting has gained 48.2% year to date. Moreover, it has a long-term earnings growth rate of 12.8%.
ULTA Salon has jumped 39.1% year to date. The stock has a long-term earnings growth rate of 19.5%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why Bed Bath & Beyond (BBBY) is Declining Post Earnings
Dark clouds are looming over the horizon for home furnishing retailer, Bed Bath & Beyond Inc. at the moment with no silver lining in sight. Even a week after third-quarter fiscal 2016 earnings, the company’s shares continue to decline as investor’s see no hope of revival in its top and bottom-line performance. Further, shares of this Zacks Rank #5 (Strong Sell) company have been trending down in the year-to-date period.
Evidently, the company’s stock has declined 10.3% in the last one week, 10% in the past month and 15.3% year to date. On comparison with the Zacks categorized Retail – Miscellaneous/Diversified industry, we see the stock has significantly underperformed the industry’s decline of 4.2% in the last one week and 3.7% in the past one month. Further, it has lagged the industry’s growth of 6.8% in the year-to-date period.
Moreover, the chances of a rebound in the stock price seem minimal as its broader industry occupies a space in the bottom 50% of the Zacks Classified industries.
What’s Behind the Decline?
Last week, Bed Bath & Beyond reported dismal third-quarter fiscal 2016 results, wherein both top line and bottom line missed our estimates for the third time in a row. The company’s quarterly earnings of 85 cents per share declined nearly 22% year over year and were substantially below the Zacks Consensus Estimate of $1.00. Further, net sales of $2,955.5 million fell short of the Zacks Consensus Estimate of $3,058 million but climbed by a marginal 0.1%, year over year.
BED BATH&BEYOND Price, Consensus and EPS Surprise
BED BATH&BEYOND Price, Consensus and EPS Surprise | BED BATH&BEYOND Quote
The company continued to reel under the impact of sluggish mall traffic, which more than offset online sales growth in third-quarter fiscal 2016. Sales were hurt by softness in comparable store sales (comps), which dropped roughly 1.4% in the quarter. While comps from customer-facing digital networks improved more than 20%, comps at stores fell at a low-single digit rate.
Further, the company provided a dismal outlook for fiscal 2016. Based on the quarter-to-date fourth-quarter comps performance and expectations for the holiday season, it expects comps to decline 50 basis points in fiscal 2016, along with a sales growth of just 1%.
Moreover, the company envisions fiscal 2016 earnings per share to be at the lower end of its historical range of $4.50 to a little over $5.00.
This has definitely induced a negative sentiment among analysts for the company, evident from the downward estimate revisions for the fourth quarter and fiscal 2016. In the last seven days, the Zacks Consensus Estimate for the fourth quarter dipped 2.7% to $1.79 per share, while the estimate for fiscal 2016 declined 3% to $4.52 per share.
However, Bed Bath & Beyond remains committed toward driving long-term growth on the back of its strategic investments, omni-channel development and enhancement of its product assortments through innovation. Moreover, the company’s constant shareholder-friendly moves are commendable.
Nonetheless, given the soft near-term view we remain cautious on the stock’s performance in the near future.
Stocks to Consider
Meanwhile, investors may consider investing in some favorably-ranked stocks in the same industry including Big 5 Sporting Goods Corp. (BGFV - Free Report) , sporting a Zacks Rank #1 (Strong Buy), DICK’s Sporting Goods Inc. (DKS - Free Report) and ULTA Salon, Cosmetics & Fragrance, Inc. (ULTA - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Big 5 Sporting, with a long-term earnings growth rate of 12%, has surged a whopping 76.2% year to date.
DICK’S Sporting has gained 48.2% year to date. Moreover, it has a long-term earnings growth rate of 12.8%.
ULTA Salon has jumped 39.1% year to date. The stock has a long-term earnings growth rate of 19.5%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>