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.
Bed Bath & Beyond Up 41% YTD: Will the Rally Continue in 2020?
Read MoreHide Full Article
Bed Bath & Beyond Inc. has been gaining momentum, thanks to solid gains from its robust transformational efforts. Moreover, the company remains committed toward bolstering its omni-channel capabilities, including store-growth strategy and digital expansion. Also, Bed Bath & Beyond has been smoothly progressing toward accomplishing its financial targets including earnings per share growth in fiscal 2020.
Year to date, the retailer has gained 41.1% compared with the industry’s 12.1% rally. The stock has also comfortably outperformed the Retail-Wholesale sector’s 24.1% gain and the S&P 500 Index’s 27.8% growth.
Factors Behind Bed Bath & Beyond’s Growth Story
Bed Bath & Beyond’s solid Transformation Plan targets achieving four major near-term priorities — stabilize and boost top-line growth; reset the cost structure; review and optimize asset base with its portfolio of retail banners, and refine the organization structure. Moreover, updates on the aforesaid plan state that the company expects an aggressive inventory reduction of up to $1 billion over the next 18 months. This will help it to reset inventory faster in both stores and distribution centers. Also, its cost savings, reduction of corporate workforce and other short-term actions are projected to reduce cost by $10 million and bolster margins.
Delving into the company’s store-rationalization endeavors, Bed Bath & Beyond remains focused on expanding its store base and increasing the productivity of existing stores to drive top-line growth. As part of the plan, the company is remodeling stores into the Next Generation Lab stores, where different experiences and visual merchandising are expected to boost customer shopping experience. Simultaneously, it plans to shut underperforming stores over the next couple of years to yield the benefit of heavy lease expiration cadence. This move will increase the company’s sales and profitability, on a per-store basis.
Additionally, Bed Bath & Beyond has been making constant investments in its customer-facing digital platforms. It is also making significant improvements in the search and recommendation functionality of its site and mobile app. Management is planning to convert the Reserve Online Pickup In-Store capability to Buy Online Pickup In-Store to improve the experience as customers can quickly pick up purchased products from the store, with conveniences such as curbside pickup or lockers.
With that said, we expect the company’s aforementioned strategies to consistently drive its performance in 2020. A VGM Score of A coupled with an expected long-term earnings growth rate of 6.4% further highlights this Zacks Rank #3 (Hold) stock’s potential.
DICK'S Sporting Goods, Inc. (DKS - Free Report) , which is also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 6.5%.
Sally Beauty Holdings, Inc. (SBH - Free Report) outpaced the earnings estimates in three of the trailing four quarters, the average beat being 4.2%. The company currently has a Zacks Rank of 1.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
Image: Bigstock
Bed Bath & Beyond Up 41% YTD: Will the Rally Continue in 2020?
Bed Bath & Beyond Inc. has been gaining momentum, thanks to solid gains from its robust transformational efforts. Moreover, the company remains committed toward bolstering its omni-channel capabilities, including store-growth strategy and digital expansion. Also, Bed Bath & Beyond has been smoothly progressing toward accomplishing its financial targets including earnings per share growth in fiscal 2020.
Year to date, the retailer has gained 41.1% compared with the industry’s 12.1% rally. The stock has also comfortably outperformed the Retail-Wholesale sector’s 24.1% gain and the S&P 500 Index’s 27.8% growth.
Factors Behind Bed Bath & Beyond’s Growth Story
Bed Bath & Beyond’s solid Transformation Plan targets achieving four major near-term priorities — stabilize and boost top-line growth; reset the cost structure; review and optimize asset base with its portfolio of retail banners, and refine the organization structure. Moreover, updates on the aforesaid plan state that the company expects an aggressive inventory reduction of up to $1 billion over the next 18 months. This will help it to reset inventory faster in both stores and distribution centers. Also, its cost savings, reduction of corporate workforce and other short-term actions are projected to reduce cost by $10 million and bolster margins.
Delving into the company’s store-rationalization endeavors, Bed Bath & Beyond remains focused on expanding its store base and increasing the productivity of existing stores to drive top-line growth. As part of the plan, the company is remodeling stores into the Next Generation Lab stores, where different experiences and visual merchandising are expected to boost customer shopping experience. Simultaneously, it plans to shut underperforming stores over the next couple of years to yield the benefit of heavy lease expiration cadence. This move will increase the company’s sales and profitability, on a per-store basis.
Additionally, Bed Bath & Beyond has been making constant investments in its customer-facing digital platforms. It is also making significant improvements in the search and recommendation functionality of its site and mobile app. Management is planning to convert the Reserve Online Pickup In-Store capability to Buy Online Pickup In-Store to improve the experience as customers can quickly pick up purchased products from the store, with conveniences such as curbside pickup or lockers.
With that said, we expect the company’s aforementioned strategies to consistently drive its performance in 2020. A VGM Score of A coupled with an expected long-term earnings growth rate of 6.4% further highlights this Zacks Rank #3 (Hold) stock’s potential.
3 Key Picks in Retail
Hibbett Sports, Inc. (HIBB - Free Report) has an impressive long-term earnings growth rate of 12.2%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
DICK'S Sporting Goods, Inc. (DKS - Free Report) , which is also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 6.5%.
Sally Beauty Holdings, Inc. (SBH - Free Report) outpaced the earnings estimates in three of the trailing four quarters, the average beat being 4.2%. The company currently has a Zacks Rank of 1.
Free: Zacks’ Single Best Stock Set to Double
Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.
See 5 Stocks Set to Double>>