Bed Bath & Beyond Looks Strong Going Into Earnings

The specialty retailer’s full-year earnings estimates appear promising despite a tougher-than- expected fourth quarter.

Apr 9, 2014 at 1:17PM

For the past year, Bed Bath & Beyond (NASDAQ:BBBY) has been focused on improving its customer service within its stores. The retailer has attempted to do this in a number of ways, including making efforts to increase online retail sales through omnichannel opportunities and revamping its websites to streamline the shopping experience. In addition, Bed Bath & Beyond announced an initiative to introduce a food and beverage section in its namesake stores that includes products from its World Market stores. 

A year later, investors will find out how successful Bed Bath & Beyond was in implementing these changes. The company reports its fourth-quarter and full-year earnings for fiscal 2013 after market closes on Wednesday, April 9. It will be interesting to see how it actually performs against analysts' estimates. 

Lowering expectations
Bed Bath & Beyond on March 7 provided an earnings update for the fourth quarter. The company neither reaffirmed nor raised its original earnings projections but instead lowered the guidance. It now expects earnings to fall in the range of $1.57 to $1.61 a share in the fourth quarter from an initial range of $1.60 to $1.67 a share.

Bed Bath & Beyond announced that this adjustment was the result of bad weather conditions throughout the winter months. According to the company, this "included 464 times a store was closed for a full day and 1,923 times that a store was closed for a partial day."

These closures and delays halted stores from operating, thus preventing sales from taking place. In fact, Bed Bath & Beyond has stated that comparable-store sales were negatively affected by the unfortunate weather conditions by 2% to 4%, leading to a smaller-than-expected comparable sales increase of 1.7%. Analysts have since updated their own estimates to be more in sync with that of Bed Bath & Beyond.

Current estimates for the quarter and full year
While Bed Bath & Beyond made great strides throughout fiscal 2013, its fourth- quarter performance is expected to be slightly worse than the same quarter a year ago. Once again, this is primarily a result of poor weather conditions, causing operations to stop for hours and even days.

Keeping that in mind, investors should look past the short-term problems the company experienced and more toward the gains the company has made: its expanded omnichannel initiative via the introduction of new technology and data systems in its stores along with the debut of a new website for Buy Buy Baby and the redesign of the Bed Bath & Beyond website.

For the quarter, analysts estimate earnings per share of $1.60, $0.06 lower than the year-ago quarter. Revenue is expected to fall by 5.3% to $3.2 billion from $3.4 billion. Thankfully, net sales and earnings are expected to increase for the full year compared to the previous year.

Fiscal 2013 will almost certainly show decent growth over FY 2012. Bed Bath & Beyond's success with its decentralized management structure in delivering exceptional customer service along with its ongoing efforts to improve online retail sales and boost stores' product assortment are evidence that this retailer keeps getting better at what it does.

Analysts estimate 5.6% revenue growth from the previous year with net sales expected to total $11.5 billion. In addition, full-year earnings per share are expected to reach $4.80 a share, a 6% increase from fiscal 2012's diluted earnings per share of $4.53. It's quite possible that Bed Bath & Beyond was able to achieve these figures despite having a tough fourth quarter.

Beating the competition
Bed Bath & Beyond is expected to surpass competitors Target (NYSE:TGT) and Wal-Mart Stores (NYSE:WMT) in terms of revenue and earnings growth. Both competitors reported fourth-quarter and full-year earnings in February. It is understandable that Target had a rough fiscal 2013 after making headlines on account of a data breach within its systems. The data breach leaked customers' personal information including payment details, and it ultimately affected 110 million people.

Unfortunately for Target, sales fell along with earnings, as customers flocked elsewhere to do their shopping. Some vowed never to return again. While Wal-Mart had a better year than Target in terms of both revenue and earnings performance, net income fell by 5.7% from the previous year. By looking at the charts below, Bed Bath & Beyond is looking strong going into fourth quarter and full-year earnings and will likely beat the competition.


Company Name

FY 2012 Revenue

FY 2013 Revenue


Bed Bath & Beyond

$10.91 billion

$11.52 billion (estimate)

5.6% (estimate)


$2.999 billion

$1.97 billion


Wal-Mart Stores

$468.65 billion

$476.29 billion


Earnings Per Share

Company Name

FY 2012 EPS

FY 2013 EPS


Bed Bath & Beyond


$4.80 (estimate)

6% (estimate)





Wal-Mart Stores




Foolish takeaway
Foolish investors should keep their eyes on Bed Bath & Beyond. The company continues to improve its omnichannel business, introduce new products, expand operations, and provide exceptional customer service through hiring locals to manage its stores.

Furthermore, Bed Bath & Beyond's competitive prices and coupons are luring customers through the doors and forcing competitors to either mark down their products or offer better discounts. Investors would be wise to do more research on Bed Bath & Beyond before the company's earnings release on April 9. Expect results to come close, if not in-line, with analysts' estimates.

A better way to build wealth
While Bed Bath & Beyond may grow earnings into the future, The Motley Fool has an much better way to grow your wealth: invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Sounds tough, but our analysts have found multi-bagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

Natalie O'Reilly has no position in any stocks mentioned. The Motley Fool recommends Bed Bath & Beyond. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers