Bed, Bath & Beyond Earnings: Shares Slide Despite Strong Quarter

Bed Bath & Beyond (BBBY) shares skidded more than 5% in premarket trading after the home furnishings retailer reported its first-quarter earnings late Wednesday. While the quarterly results were strong, the company issued a disappointing forecast for the second quarter.

For its fiscal first quarter, which ended May 29, Bed Bath & Beyond reported that its net earnings rose some 53% to $137.6 million, or 52 cents per share, compared to $87.2 million, or 34 cents per share in the same quarter a year ago. Net sales rose 13.5% to $1.923 billion, from $1.694 billion last year. The results topped expectations for earnings of 48 cents per share and revenue of $1.89 billion.

The all-important comparable store sales measure increased by approximately 8.4%, compared with a decrease of approximately 1.6% last year.

But for the fiscal second quarter, the company forecast net earnings per share to be in the 59 cent to 63 cent per share range, which is below analysts' expectations for earnings of 64 cents a share, according to Thomson Reuters I/B/E/S. For the full year, the company expects an earnings increase of approximately 15%, an improvement over earlier forecast of 10% to 15% growth.

Similarly, the company's second-quarter sales and comparable sales forecasts clearly predict a slowdown compared to the last few quarters. Bed, Bath & Beyond said it expects sales to grow in the high single digits, while same-store sales are expected to grow in the mid single digits. Analysts had expected second quarter revenue of $2.1 billion -- at least 10% higher than a year earlier.

Still, some analysts this morning issued positive notes. Raymond James upgraded BBBY to strong buy from market perform, and Oppenheimer said the weakness in the shares creates a buying opportunity.