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Bed, Bath & Beyond (BBBY) Q3 Earnings: Will It Disappoint?
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Bed Bath & Beyond Inc. is slated to release third-quarter fiscal 2016 results on Dec 21. Last quarter, the company had delivered a negative earnings surprise of 5.1%.
In fact, it has underperformed the Zacks Consensus Estimate by an average of 1.5% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
Bed Bath & Beyond continues to be impacted by sluggish mall traffic and high promotional costs. Further, due to its exposure to global markets, the company remains susceptible to risks associated with international operations like currency headwinds. These factors have led the company to report dismal top-line results for almost 12 quarters now. Moreover, the company reported a second consecutive earnings miss in the last quarter.
Though the company reiterated its outlook for fiscal 2016, its soft comps and weak margins trends are anticipated to hurt results throughout fiscal 2016. Bed Bath & Beyond projects comps growth for fiscal 2016 in the range of flat to up 1%. Additionally, management continues to expect gross margin and selling, general and administrative expense deleverage in fiscal 2016. We believe this is likely to hurt the company’s third-quarter results as well.
The company’s shares have also plunged nearly 2.7% year to date, substantially lagging the Zacks categorized Retail-Miscellaneous/Diversified industry, which has grown 11.7% in the same period.
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 noteworthy.
Nonetheless, given the soft near-term view we remain cautious on the company’s performance in the upcoming 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: Earnings ESP for Bed Bath & Beyond is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bed Bath & Beyond carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) 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:
Constellation Brands Inc. (STZ - Free Report) , scheduled to report earnings on Jan 5, has an Earnings ESP of +2.96% and a Zacks Rank #3.
Caterpillar Inc. (CAT - Free Report) , expected to report earnings on Jan 26, has an Earnings ESP of +3.03% and a Zacks Rank #3.
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Bed, Bath & Beyond (BBBY) Q3 Earnings: Will It Disappoint?
Bed Bath & Beyond Inc. is slated to release third-quarter fiscal 2016 results on Dec 21. Last quarter, the company had delivered a negative earnings surprise of 5.1%.
In fact, it has underperformed the Zacks Consensus Estimate by an average of 1.5% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
BED BATH&BEYOND Price and EPS Surprise
BED BATH&BEYOND Price and EPS Surprise | BED BATH&BEYOND Quote
Factors Influencing this Quarter
Bed Bath & Beyond continues to be impacted by sluggish mall traffic and high promotional costs. Further, due to its exposure to global markets, the company remains susceptible to risks associated with international operations like currency headwinds. These factors have led the company to report dismal top-line results for almost 12 quarters now. Moreover, the company reported a second consecutive earnings miss in the last quarter.
Though the company reiterated its outlook for fiscal 2016, its soft comps and weak margins trends are anticipated to hurt results throughout fiscal 2016. Bed Bath & Beyond projects comps growth for fiscal 2016 in the range of flat to up 1%. Additionally, management continues to expect gross margin and selling, general and administrative expense deleverage in fiscal 2016. We believe this is likely to hurt the company’s third-quarter results as well.
The company’s shares have also plunged nearly 2.7% year to date, substantially lagging the Zacks categorized Retail-Miscellaneous/Diversified industry, which has grown 11.7% in the same period.
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 noteworthy.
Nonetheless, given the soft near-term view we remain cautious on the company’s performance in the upcoming 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: Earnings ESP for Bed Bath & Beyond is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.00. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Bed Bath & Beyond carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) 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:
CarMax Inc. (KMX - Free Report) , slated to report earnings on Dec 20, has an Earnings ESP of +2.82% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Constellation Brands Inc. (STZ - Free Report) , scheduled to report earnings on Jan 5, has an Earnings ESP of +2.96% and a Zacks Rank #3.
Caterpillar Inc. (CAT - Free Report) , expected to report earnings on Jan 26, has an Earnings ESP of +3.03% and a Zacks Rank #3.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>