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Here's How Bed Bath & Beyond (BBBY) Looks Ahead of Q2 Earnings

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Bed Bath & Beyond Inc. (BBBY - Free Report) is slated to release second-quarter fiscal 2022 results on Sep 29. This leading specialty retailer is expected to deliver sales and earnings declines in the to-be-reported quarter.

The Zacks Consensus Estimate for the company's fiscal second-quarter earnings is pegged at a loss of $1.59 per share, suggesting a 4,075% decline from the year-ago quarter's reported figure. The loss estimate has further widened in the past 30 days. The consensus mark for fiscal second-quarter sales is pegged at $1.44 billion, suggesting a 27.3% decline from the prior-year reported number.

We expect the company’s fiscal second-quarter total revenues to decline 25.2% year over year to $1,485.4 million. We expect the company to report a loss of $1.43 per share against earnings of 4 cents reported in the prior-year quarter.

In the last reported quarter, the company delivered an earnings surprise of 112.8%. Also, the company has a trailing four-quarter negative earnings surprise of 1,635%, on average.

Bed Bath & Beyond Inc. Price and EPS Surprise

Bed Bath & Beyond Inc. Price and EPS Surprise

Bed Bath & Beyond Inc. price-eps-surprise | Bed Bath & Beyond Inc. Quote

Key Points to Note

Bed Bath & Beyond has been gaining from continued strength in its digital channel, driven by enhanced omnichannel capabilities, including buy online and pick up in store, and same-day delivery services. On the last reported quarter’s earnings call, management noted that digital sales were nearly in-line with pre-pandemic levels. Management remained optimistic about the growth of its digital channel and is making efforts to offer an improved customer experience. The robust trends in the digital business are expected to have boosted the top line in the fiscal second quarter.

The company has been progressing well with the transformation plan, including store fleet optimization efforts and store remodeling programs. Bed Bath & Beyond has been on track with the rollout of Owned Brands as part of its three-year transformation plan. The gains from the rollout of newer brands are expected to have aided the company's performance in the to-be-reported quarter.

However, BBBY’s second-quarter fiscal 2022 results are likely to be affected by the ongoing macroeconomic environment, the shift in customer preference, rising inflation, supply-chain challenges, and significant dislocation in sales and inventory. Weak margins and high debt levels are also concerns.

To combat the higher supply-chain costs, the company has been adjusting its supply-chain infrastructure and cost structure to reflect lower sales. These are likely to have affected the company’s top and bottom lines in the to-be-reported quarter. Also, delayed unit receipts and long transit times, as well as significant muted demand, are expected to have acted as deterrents in the fiscal second quarter.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Bed Bath & Beyond this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Bed Bath & Beyond currently has an Earnings ESP of -4.73% and a Zacks Rank #3.

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:

Kroger (KR - Free Report) has an Earnings ESP of +0.21% and a Zacks Rank of #2. The company is expected to register top and bottom-line growth when it reports second-quarter fiscal 2022 numbers. The Zacks Consensus Estimate for KR's quarterly revenues is pegged at $33.9 billion, which suggests growth of 6.5% from the prior-year quarter's reported figure. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kroger’s quarterly earnings has moved up 2.6% in the past 30 days to 80 cents per share. It also suggests 2.6% growth from the year-ago reported number. KR has a trailing four-quarter earnings surprise of 15.7%, on average.

Hibbett Sports (HIBB - Free Report) currently has an Earnings ESP of +5.85% and a Zacks Rank #2. HIBB is likely to register top and bottom-line growth when it reports third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $427.3 million, which suggests growth of 12% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Hibbett’s quarterly earnings has moved up 13.9% in the past 30 days to $2.54 per share, suggesting growth of 51.2% from the year-ago quarter's reported number. HIBB has a trailing four-quarter negative earnings surprise of 5.5%, on average.

Tractor Supply Co. (TSCO - Free Report) currently has an Earnings ESP of +0.68% and a Zacks Rank #3. TSCO is anticipated to register top and bottom-line growth when it reports third-quarter 2022 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.3 billion, indicating an improvement of 8.8% from the prior-year quarter.

The Zacks Consensus Estimate for Tractor Supply’s bottom line has moved up by a penny in the past seven days to $2.09 per share. The consensus estimate suggests growth of 7.2% from the year-ago quarter's reported figure. TSCO has a trailing four-quarter earnings surprise of 10.2%, on average.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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