Bed Bath & Beyond Inc. (NASDAQ: NASDAQ:BBBY)
Bed Bath & Beyond, who reported their quarterly earnings after the bell closed on September 19th, 2017 have seen their shares fall 33% since January of 2017. And now, after the earnings were released shares look to be taking a huge hit in the after hours trading session due to missed earnings expectations.
The company reported an adjusted net income of +0.75 cents per share. However this was sharply lower than what analysts had been expecting which was +$0.95 per share. Revenues came in at about $2.94 billion dollars which was much lower than the $3.01 billion dollar estimate.
One interesting note is that as recent as September 14th of this year, UBS Securities had taken a neutral stance on their opinion of the share price. Perhaps they saw chinks in the armor showing up during their fundamental analysis and weren’t ready to put a buy recommendation on the shares.
BBBY Price Action
Shares have traded in a 52-week Range of a low at $26.54 to a high of $48.83. During the regular trading session on Tuesday, shares closed at $27.03 which was down $0.27 on the day.
However, after the close of the after-hours trading session shares closed at $23.58 which was down -12.76% or down -$3.45 as of 8 p.m. Eastern Daylight Time.
One positive about the company’s financials is that they pay a fairly hefty dividend of 2.09% annually. This should keep some investors in the stock at least for the generous dividend.
Fundamental Analyst’s Comments/Statements
-It’s current Price/Book of 1.89 is about median in its peer group.
-We classify BBBY-MX as Harvesting because of the market’s relatively low growth expectations despite its relatively high returns.
-BBBY has relatively high profit margins while operating with median asset turns.
Change in the company’s annual revenues seems to be coming at the expense of earnings.
-BBBY return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
-The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers
-While BBBY revenue growth in recent years has been above the peer median, the stock’s P/E ratio is less than the peer median suggesting that the company’s earnings may be peaking and the market expects a decline in its growth expectations.
-The company’s level of capital investment seems appropriate to support the company’s growth.
BBBY has additional debt capacity. -Capitalcube.com
Bed Bath & Beyond Charts
The above price chart shows the 5 minute action during the regular trading session on the left and the after-hours trading session on the right in the shaded area. It is easy to see exactly when the earnings were announced and the share price dropped enormously. Shares didn’t even attempt a rally and basically flatlined afterward.
The above price chart shows Bed Bath & Beyond on a daily basis going back a few months. It is easy to see in the 3 highlighted over areas where price was rejected at the 50 period moving average. When shares open up on Wednesday they will be decisively well below this level. It may take a few quarters of good earnings before the price tests the 50 period moving average once again.
Company Profile
Bed Bath & Beyond Inc., together with its subsidiaries, operates a chain of retail stores. It sells a range of domestics merchandise, including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and juvenile products. It also provides various textile products, amenities, and other goods to institutional customers in the hospitality, cruise line, healthcare, and other industries. As of February 25, 2017, the company had a total of 1,546 stores, includes 1,023 Bed Bath & Beyond stores in 50 states, the District of Columbia, Puerto Rico, and Canada; 276 stores under the names of World Market, Cost Plus World Market, or Cost Plus; 113 buybuy BABY stores in 35 states and Canada; 80 stores under the CTS name; and 54 stores under the Harmon name. It also offers products through various Websites and applications, such as bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, christmastreeshops.com, buybuybaby.com, buybuybaby.ca, harborlinen.com, t-ygroup.com, and worldmarket.com. In addition, the Company operates Of a Kind, an e-commerce Website that features specially commissioned limited edition items from emerging fashion and home designers; One Kings Lane, an online authority in home décor and design that offers a collection of selected home goods, and designer and vintage items; PersonalizationMall.com, an online retailer of personalized products; Chef Central, an online retailer of kitchenware, cookware, and homeware items catering to cooking and baking enthusiasts; and Decorist, an online interior design platform that provides personalized home design services. Bed Bath & Beyond Inc. was founded in 1971 and is based in Union, New Jersey