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Bed Bath & Beyond (BBBY) Q4 Earnings: Stock to Disappoint?
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Bed Bath & Beyond Inc. is scheduled to release fourth-quarter fiscal 2016 results on Apr 5. The big question facing investors is, whether this leading home furnishings retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Bed Bath & Beyond has been delivering negative earnings surprises for three straight quarters now. The Zacks Consensus Estimate for both, fourth-quarter and fiscal 2017 has been stable, over the last 30 days. However, the current Zacks Consensus Estimate of $1.78 per share for the fiscal fourth quarter reflects a year-over-year decline of 4.1%. Nonetheless, analysts polled by Zacks expect revenues of $3.5 billion, up 2.5% from the year-ago quarter.
Bed, Bath & Beyond has underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry in the past one year. Shares of the company have slumped 20.2% over the past year, as compared with the industry’s decline of 6.4%.
The company has been reeling under the impact of sluggish mall traffic for a while now. This was also evident from Bed, Bath & Beyond’s last quarterly results, wherein slow traffic in stores more than offset online sales growth, thereby leading to a dismal outcome. Further, the gross margin remained pressurized owing to higher direct-to-customer shipping expenses, as well as a rise in coupon costs. Moreover, the company witnessed a rise in selling, general and administrative (SG&A) expenses due to higher payroll and payroll-related expenses, as well as an increase in technology expenses. Management expects these factors to linger and consequently impact gross margin and SG&A expense in fiscal 2016, which is likely to dent the company’s bottom-line.
Considering these factors and the current business trends, along with the expected impact from the company’s recent acquisitions of One Kings Lane, and PersonalizationMall.com, management provided its fiscal 2016 earnings guidance. The company envisions fiscal 2016 earnings per share at the lower end of its historical range of $4.50 to a little over $5.00.
Additionally, given its international exposure, Bed, Bath & Beyond remains prone to foreign currency headwinds. Adverse currency has troubled the company to a great extent in the past and hence, any persistence of currency woes remains a challenge for Bed, Bath & Beyond. All said, it seems unlikely for the company to break its dismal earnings surprise trend this quarter.
Earnings Whispers
Our proven model does not conclusively show that Bed, Bath & Beyond is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Bed, Bath & Beyond currently has an Earnings ESP of 0.00%. This is because both, the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bed, Bath & Beyond currently carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Yum China Holdings, Inc. (YUMC - Free Report) , slated to release earnings on Apr 5, currently has an Earnings ESP of +2.86% and a Zacks Rank #3.
Tupperware Brands Corporation (TUP - Free Report) , slated to report earnings on Apr 25, currently has an Earnings ESP of +3.23% and a Zacks Rank #3.
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Bed Bath & Beyond (BBBY) Q4 Earnings: Stock to Disappoint?
Bed Bath & Beyond Inc. is scheduled to release fourth-quarter fiscal 2016 results on Apr 5. The big question facing investors is, whether this leading home furnishings retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Bed Bath & Beyond has been delivering negative earnings surprises for three straight quarters now. The Zacks Consensus Estimate for both, fourth-quarter and fiscal 2017 has been stable, over the last 30 days. However, the current Zacks Consensus Estimate of $1.78 per share for the fiscal fourth quarter reflects a year-over-year decline of 4.1%. Nonetheless, analysts polled by Zacks expect revenues of $3.5 billion, up 2.5% from the year-ago quarter.
Bed Bath & Beyond Inc. Price and EPS Surprise
Bed Bath & Beyond Inc. Price and EPS Surprise | Bed Bath & Beyond Inc. Quote
Factors Influencing this Quarter
Bed, Bath & Beyond has underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry in the past one year. Shares of the company have slumped 20.2% over the past year, as compared with the industry’s decline of 6.4%.
The company has been reeling under the impact of sluggish mall traffic for a while now. This was also evident from Bed, Bath & Beyond’s last quarterly results, wherein slow traffic in stores more than offset online sales growth, thereby leading to a dismal outcome. Further, the gross margin remained pressurized owing to higher direct-to-customer shipping expenses, as well as a rise in coupon costs. Moreover, the company witnessed a rise in selling, general and administrative (SG&A) expenses due to higher payroll and payroll-related expenses, as well as an increase in technology expenses. Management expects these factors to linger and consequently impact gross margin and SG&A expense in fiscal 2016, which is likely to dent the company’s bottom-line.
Considering these factors and the current business trends, along with the expected impact from the company’s recent acquisitions of One Kings Lane, and PersonalizationMall.com, management provided its fiscal 2016 earnings guidance. The company envisions fiscal 2016 earnings per share at the lower end of its historical range of $4.50 to a little over $5.00.
Additionally, given its international exposure, Bed, Bath & Beyond remains prone to foreign currency headwinds. Adverse currency has troubled the company to a great extent in the past and hence, any persistence of currency woes remains a challenge for Bed, Bath & Beyond. All said, it seems unlikely for the company to break its dismal earnings surprise trend this quarter.
Earnings Whispers
Our proven model does not conclusively show that Bed, Bath & Beyond is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: Bed, Bath & Beyond currently has an Earnings ESP of 0.00%. This is because both, the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bed, Bath & Beyond currently carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (#4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Fastenal Company (FAST - Free Report) , expected to release earnings on Apr 11, currently has an Earnings ESP of +2.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Yum China Holdings, Inc. (YUMC - Free Report) , slated to release earnings on Apr 5, currently has an Earnings ESP of +2.86% and a Zacks Rank #3.
Tupperware Brands Corporation (TUP - Free Report) , slated to report earnings on Apr 25, currently has an Earnings ESP of +3.23% and a Zacks Rank #3.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>