Bed Bath & Beyond jumps after beating on profits
- Bed Bath & Beyond slightly missed on sales but beat on profits in the third quarter.
- The retailer's comparable sales decline was worse than expected.
- The company maintained its earnings guidance that topped Wall Street estimates.
- Watch Bed Bath & Beyond trade live.
Bed Bath & Beyond soared 9% to $13.36 a share early Thursday as investors brushed off soft sales and instead focused on its better-than-expected profit.The home-goods seller announced late Wednesday that it earned $0.18 a share in the third quarter - $0.01 better than the Wall Street consensus, according to Bloomberg data. Its revenue totaled $3.03 billion, slightly missing the $3.04 billion that was expected.
Looking ahead, Bed Bath & Beyond maintained its earnings guidance of $2 per share, topping the $1.97 that analysts were expecting.The company's guidance reflects many factors, including "the holiday selling season; the continuation of trends it has been experiencing; and actions being taken in support of the company's stronger bias towards prioritizing long-term profitability over near-term sales growth," said Bed Bath & Beyond in a press release.
But at least one Wall Street analyst was skeptical of the plan.
"Traction is taking hold with next-gen stores and assortment improvements, but these remain in their infancy, so near-term fundamentals should remain bleak," said Jefferies analyst Jonathan Matuszewski in a note out on Thursday.
"We'd prefer stabilization in comps and margins until becoming more constructive. We appreciate BBBY's initiatives, but need to see more progress off a larger base. Valuation reflects uncertainty with turnaround materializing, encroaching online competition, and too many stores," Matuszewski added.
Matuszewski maintained his "hold" position and lowered his price target from $16 to $15 - 22% above where shares were trading on Wednesday.
Bed Bath & Beyond was down 34% in the past year.
- After Bihar, now BJP promises free Corona vaccine in MP
- Sanofi, GSK to support COVAX with 200mn doses of Covid-19 vaccine
- Union Minister Smriti Irani tests positive for COVID-19
- Samsung overtakes Xiaomi to retake the smartphone crown in India
- Axis Bank is back in the black as fee collections ramp up and ₹10,000 crore in fund raising cushions the balance sheet