What to Watch for When Bed Bath & Beyond (BBBY) Posts Earnings

NEW YORK (TheStreet) -- Shares of Bed Bath & Beyond (BBBY) are up 0.28% to $70.95 in late morning trading Wednesday, ahead of the retailer's first quarter earnings due out after the market closes later today.

Wall Street is expecting the company to earn 94 cents per share on revenue of $2.74 billion for the quarter ended May 2015, according to Thomson Reuters data.

In the same quarter a year ago, the company earned 93 cents per share on sales of $2.66 billion.

Union, N.J.-based Bed Bath & Beyond, with its subsidiaries, is a retailer selling a range of domestic merchandise, including bed linens and related items, bath items and kitchen textiles, as well as other home goods.

Separately, TheStreet Ratings team rates BED BATH & BEYOND INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate BED BATH & BEYOND INC (BBBY) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, notable return on equity and attractive valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • BED BATH & BEYOND INC has improved earnings per share by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, BED BATH & BEYOND INC increased its bottom line by earning $5.13 versus $4.81 in the prior year. This year, the market expects an improvement in earnings ($5.25 versus $5.13).
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 4.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Specialty Retail industry and the overall market, BED BATH & BEYOND INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: BBBY Ratings Report

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