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Bed Bath & Beyond (BBBY) Q1 Earnings to Let Investors Down?
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Bed Bath & Beyond Inc. is slated to release first-quarter fiscal 2017 results on Jun 22. The question lingering in investors’ minds is whether this home furnishings retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Despite delivering a positive earnings surprise in the last reported quarter, the company lagged the Zacks Consensus Estimate by an average of 5.8% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
The current Zacks Consensus Estimate for the quarter under review is 66 cents, reflecting a year-over year slump of 17.9%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. On the positive side, analysts polled by Zacks expect revenues of $2.79 billion, up a little over 2% from the year-ago quarter.
Factors at Play
Bed Bath & Beyond has underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry over the last one year. The company’s shares have plunged 14.7%, compared with the industry’s dip of 1.9% in the said time frame.
The company has been reeling under sluggish mall traffic, with increasing shift toward online shopping. Despite posting better-than-expected fourth-quarter fiscal 2016 results, the company’s margins continued to remain under pressure. The margin pressure stemmed from increased shipping and promotional costs, along with a rise in SG&A expenses.
Management expects these factors to linger and consequently impact the gross margin and SG&A expenses in fiscal 2017. This in turn is likely to dent the company’s bottom-line. Consequently, the company provided dismal earnings per share view for fiscal 2017, which is expected to decline in the range of low-single digits percentage to 10%. Apart from this, Bed Bath & Beyond's global presence keeps it exposed to the threat of adverse currency fluctuations, which have troubled the company to quite an extent in the past. These factors clearly raise concerns, making us apprehensive about the upcoming results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Bed Bath & Beyond to beat earnings 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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. Additionally, the company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 66 cents. The combination of Bed Bath & Beyond’s Zacks Rank #4 and ESP of 0.00% makes surprise prediction difficult.
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:
Tupperware Brands Corporation (TUP - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank #2.
Philip Morris International Inc (PM - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
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At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>
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Bed Bath & Beyond (BBBY) Q1 Earnings to Let Investors Down?
Bed Bath & Beyond Inc. is slated to release first-quarter fiscal 2017 results on Jun 22. The question lingering in investors’ minds is whether this home furnishings retailer will be able to deliver a positive earnings surprise in the quarter to be reported.
Despite delivering a positive earnings surprise in the last reported quarter, the company lagged the Zacks Consensus Estimate by an average of 5.8% in the trailing four quarters. Let’s see how things are shaping up prior to this announcement.
Bed Bath & Beyond Inc. Price and EPS Surprise
Bed Bath & Beyond Inc. Price and EPS Surprise | Bed Bath & Beyond Inc. Quote
What to Expect?
The current Zacks Consensus Estimate for the quarter under review is 66 cents, reflecting a year-over year slump of 17.9%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. On the positive side, analysts polled by Zacks expect revenues of $2.79 billion, up a little over 2% from the year-ago quarter.
Factors at Play
Bed Bath & Beyond has underperformed the Zacks categorized Retail – Miscellaneous/Diversified industry over the last one year. The company’s shares have plunged 14.7%, compared with the industry’s dip of 1.9% in the said time frame.
The company has been reeling under sluggish mall traffic, with increasing shift toward online shopping. Despite posting better-than-expected fourth-quarter fiscal 2016 results, the company’s margins continued to remain under pressure. The margin pressure stemmed from increased shipping and promotional costs, along with a rise in SG&A expenses.
Management expects these factors to linger and consequently impact the gross margin and SG&A expenses in fiscal 2017. This in turn is likely to dent the company’s bottom-line. Consequently, the company provided dismal earnings per share view for fiscal 2017, which is expected to decline in the range of low-single digits percentage to 10%. Apart from this, Bed Bath & Beyond's global presence keeps it exposed to the threat of adverse currency fluctuations, which have troubled the company to quite an extent in the past. These factors clearly raise concerns, making us apprehensive about the upcoming results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Bed Bath & Beyond to beat earnings 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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. Additionally, the company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 66 cents. The combination of Bed Bath & Beyond’s Zacks Rank #4 and ESP of 0.00% makes surprise prediction difficult.
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:
Darden Restaurants, Inc. (DRI - Free Report) has an Earnings ESP of +1.74% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tupperware Brands Corporation (TUP - Free Report) has an Earnings ESP of +0.83% and a Zacks Rank #2.
Philip Morris International Inc (PM - Free Report) has an Earnings ESP of +1.63% and a Zacks Rank #3.
3 Stocks to Ride a 588% Revenue Explosion
At Zacks, we're mostly focused on short-term profit cycles, but the hottest of all technology mega-trends is starting to take hold...
By last year, it was already generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. See Zacks' Top 3 Stocks to Ride This Space >>