Bed Bath & Beyond Inc. (BBBY) is scheduled to release its second-quarter 2011 results on Wednesday, September 21, 2011. The Zacks Consensus Estimate is pegged at 84 cents a share for the second quarter of fiscal 2011. This portends an estimated increase of 20% from the prior-year quarter.
First Quarter 2011, Synopsis
The company's first-quarter earnings rose approximately 20% to 72 cents per share from the year-ago earnings of 52 cents per share, handily surpassing its earnings guidance range of 58 cents to 61 cents per share. Bed Bath & Beyond also outpaced the Zacks Consensus Estimate of 62 cents a share. The company has reported nine consecutive quarters of improving trends.
Bed Bath & Beyond's top line jumped almost 9.7% to $2,110.0 million from $1,923.0 million in the year-ago quarter. The company also beats the Zacks Consensus Estimate of $2,070.0 million.
The company has been witnessing increasing trends in comparable-store sales. After falling 0.6% in the second quarter of fiscal 2009, comparable-store sales were positive in the subsequent quarters. In the quarter under review, comparable-store sales climbed 7%.
Agreement of Analysts
Over the last 30 days, not a single analyst has revisited their estimate for the upcoming second quarter of fiscal 2011 and for full fiscal 2011.
Magnitude of Estimate Revisions
With no analysts revisiting their estimates for the upcoming quarter and fiscal 2011, the estimates have remained stagnant at 84 cents and $3.68 per share, respectively, over the last 30 days.
Considering earnings surprises, the stock has been steady over the last four quarters, with positive surprises ranging between a low of 11.1% and a high of 16.1%. The average remained positive at 13.7%.
Bed Bath & Beyond represents a strong brand with solid growth opportunities. Industry consolidation, cross merchandising opportunities, future growth potential for newer concepts, and strong balance sheet and cash flow should continue to augur well for the company.
Further, Bed Bath & Beyond is well positioned to benefit from recent positive housing turnover trends, which should support sales for home furnishing retailers in fiscal 2011.
Bed Bath & Beyond, however, operates in a highly fragmented industry and faces competition from larger retailers, such as Target Corporation (TGT) and Wal-Mart Stores Inc. (WMT) as well as from departmental and specialty stores. Despite its strong fundamentals, Bed Bath may find it difficult to execute and implement new business strategies which, in turn, will impact its operations adversely.
Currently, Bed Bath & Beyond holds a Zacks #4 Rank, implying a short-term Sell rating on the stock. However, in the long term, we have a Neutral recommendation on the stock.