Bed Bath & Beyond Reports Better-Than-Expected Revenue, Misses Earnings; Shares Soar 11%

Shares of the omnichannel merchandise retailer Bed Bath & Beyond Inc. (BBBY) soared 11.3% on reporting better-than-expected revenue and margins in the first quarter. Earnings missed the consensus estimates, yet the company raised its full fiscal year guidance based on the current quarter’s strong performance.

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The company reported adjusted earnings of $0.05 per share, missing the Street’s estimates of $0.08 per share. In the prior-year quarter, BBBY had reported an adjusted loss of $1.96 per share.

Net sales climbed 49% to $1.95 billion compared to the year-ago period and surpassed analysts’ expectations of $1.87 billion.

Comparable store sales grew 86%, including an estimated impact of 13% from fleet optimization activity. (See Bed Bath & Beyond stock chart on TipRanks)

Mark Tritton, the company’s President and CEO, said, “During the quarter, we successfully launched our margin-accretive, customer-inspired Owned Brands and accelerated growth with our Digital First, Omni-Always focus. We are re-establishing our authority in home, recapturing market share and unlocking our full potential.”

Going ahead, the company expects Q2 sales and adjusted earnings to fall in the range of $2.04-$2.08 and $0.48-$0.55 per share respectively. The Street estimates for the same time period are pegged at $2.01 billion and $0.52 per share.

For the full fiscal year 2021, the company expects net sales to be in the range of $8.2-$8.4 billion compared to the consensus estimate of $8.15 billion. Adjusted earnings are expected to be in the range of $1.40-$1.55 per share, as against analysts’ estimates of $1.47 per share.

For FY21, the company’s comparable sales are expected to grow in the low single-digit range from Q2 through Q4.

Following the results, Wells Fargo analyst Zachary Fadem reiterated the Sell rating on the stock but lifted the price target to $28 (15.9% downside potential) from $22.

Fadem said, “On one hand, BBBY delivered a very optimistic message, with better-than-expected top line results… But on the other hand, compares were the easiest BBBY may ever see, home goods demand is unprecedented today, and the company continues to cede market share and underperform its peers.”

The stock has an overall Hold consensus rating based on 2 Buys, 8 Holds, and 3 Sells. The average Bed Bath & Beyond price target of $27.36 implies 17.8% downside potential to current levels. Shares have gained 212.9% over the past year.