Bed Bath & Beyond Inc. BBBY is slated to release first-quarter fiscal 2020 results on Jul 8, 2020. In the last reported quarter, the leading specialty retailer delivered a positive earnings surprise of 80.95%. Nonetheless, its bottom line substantially missed estimates by 301.2%, on average, over the trailing four quarters.
The Zacks Consensus Estimate for the company’s fiscal first-quarter loss is pegged at $1.40, whereas it reported earnings of 12 cents in the year-ago quarter. Estimates have been unchanged in the past seven days. The consensus estimate for fiscal first-quarter sales is pegged at $1.32 billion, indicating a 48.9% decline from the prior-year quarter’s reported number.
Bed Bath Beyond Inc. Price and EPS Surprise
Bed Bath Beyond Inc. price-eps-surprise | Bed Bath Beyond Inc. Quote
Key Points to Note
Bed Bath & Beyond has been battling soft top-line numbers, comparable sales (comps) and margins for the past several quarters. The emergence of the coronavirus outbreak further affected its top line and margins as was clear in fourth-quarter fiscal 2019. The company has continued to feel the adverse impacts of the coronavirus outbreak in first-quarter fiscal 2020 as well mostly on store closures, soft traffic and high promotions.
All of its retail banners, except for buybuy BABY and Harmon Face Values stores, in the United States and Canada were closed from Mar 23 until at least May 16. At the reopened stores, the company has been operating online through Buy-Online-Pick-Up-In-Store (BOPIS) and contactless curbside delivery options at a few locations in the United States and Canada.
On May 11, management decided to expand the omni-channel services to 200 more locations. This is likely to have brought the total number of locations offering such services to roughly 750 stores, which is nearly 50% of the company’s total stores in North America. Moreover, the expansion plan is helping it to ship products online in less than two days or make pick-up available in less than two hours.
The move was in response to the rising demand for its products in the digital space. In addition, the company’s four e-commerce fulfillment centers remain operational. In a bid to expedite the delivery process and assign orders locally, it converted roughly 25% of Bed Bath & Beyond and buybuy BABY stores in the United States and Canada into regional fulfillment centers. This has almost doubled the company’s digital fulfillment capacity to cater to the rising digital sales. Notably, digital sales have surged more than 85% in April (as of Apr 25). These robust actions to reach customers and boost digital sales are likely to have reflected in the company’s fiscal first-quarter top line.
However, the majority of its stores remained closed through May 31, 2020, which is likely to have built pressure on its top and bottom lines. Moreover, the company suspended its store-remodeling plans and anticipates adverse impacts on its fiscal first-quarter results.
Our proven model does not conclusively predict an earnings beat for Bed Bath & Beyond this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Although Bed Bath & Beyond currently carries a Zacks Rank #3, its Earnings ESP of -42.35% makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Fastenal Company FAST has an Earnings ESP of +5.71%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amazon.com, Inc. AMZN has an Earnings ESP of +30.81%. It has a Zacks Rank #2 at present.
Kimberly-Clark Corporation KMB currently has an Earnings ESP of +1.78% and a Zacks Rank #2.
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