Bed Bath & Beyond earnings preview: where next for BBBY shares?

Bed Bath & Beyond shareholders are hoping the efforts made to reshape the business and the momentum built over the last year can start to pay off when it releases its first quarter results this week. We explain what to expect and consider how BBBY shares could react.

Charts (6)

Bed Bath & Beyond Q1 earnings: when will they be released?

Bed Bath & Beyond (BBBY) will release first-quarter results before US markets open on Wednesday June 30, at 0815 EDT (1315 BST). This will cover the three months to the end of May.

What to expect from the BBBY results

BBBY has just completed the first phase of a three-year transformation plan and said it was looking to ‘start fresh’ in the new financial year after sharpening its size and scale, refining its portfolio of products, and strengthening its financial position. Last year, over 140 stores closed, it divested several non-core brands and it slashed over $1 billion off its debt pile.

It will be hoping to build on the momentum gathered over the past year. It has delivered comparable sales growth over three consecutive quarters and earnings have improved thanks to the shift to higher-margin online sales, which accounted for just under one-third of its total sales in the last financial year. It acquired over 10 million new digital customers, almost doubling the number of consumers buying online.

This will be helped by the fact that BBBY will be coming up against weak comparatives as the first-quarter of the last financial year covers the period when the pandemic first erupted and forced stores to close, which will flatter its results this year.

It has already said that net sales should be around 40% higher year-on-year, suggesting a figure of around $1.83 billion compared to $1.30 billion the year before. BBBY has said its margin should steadily improve this year and come in around 34% in the first quarter, delivering Ebitda of between $80 million to $90 million.

Analysts expect BBBY will turn to adjusted diluted earnings per share of $0.08 from a $1.96 loss the year before, while reported EPS of $0.05 would compare to an $2.44 loss.

Operationally, investors will want to hear about the initial performance of the new brands launched during the first-quarter - Nestwell, Haven and Simply Essential, which are three of the eight new launches BBBY plans to complete this year.

BBBY should have bought around $325 million of stock during the first-quarter after expanding its buyback programme last year, having previously planned on buying $300 million worth. That is part of the wider plan to up buybacks to $1 billion over the full year from a previous target of $825 million.

Investors will also want to see BBBY at least reaffirm its guidance for the full-year. The company is currently aiming to deliver $8.0 billion to $8.2 billion in sales and adjusted Ebitda of $500 million to $525 million.

Where next for the BBBY share price?

The Bed Bath and Beyond share price is trading above its ascending trendline dating back to mid-September. It trades above its gently upwards sloping 100 sma on the daily chart, and above the flat 50 sma suggesting a more neutral bias.  

The RSI is also showing a neutral bias at 50 ahead if earnings so a post earnings break out trade could be worth watching for.

Buyers could be looking for a breakout trade above 33p resistance from mid-March to target 45p the June high.  

Meanwhile sellers could be watching for a close below the ascending trendline at 25p and then 23p which could see sellers gain traction towards 17.8p.

How to trade Bed Bath & Beyond shares  

You can trade Bed Bath & Beyond shares with City Index by following these four easy steps:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for ‘Bed Bath & Beyond’ or ‘BBBY’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 

More from Equities

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.