Earnings Preview: Bed Bath & Beyond

Today’s the last day of trading for 2007. The market is closed tomorrow. On Thursday, Bed Beth & Beyond will report its Q3 earnings. Here’s a preview from the AP:

OVERVIEW: Home furnishing retailers have suffered as a downturn in the housing market and softer consumer spending take a toll on sales and growth.
Consumers are being pressured to curb discretionary spending due to high food and gas prices and persistent credit problems. Bed Bath & Beyond has been a standout in the sector, however, as it focuses on middle- to high-income consumers which are less affected by the weak retail environment.
The company announced a $1 billion buyback program in September.
BY THE NUMBERS: Analysts polled by Thomson Financial expect a profit of 52 cents per share on revenue of $1.77 billion.
ANALYST TAKE: “Bed Bath & Beyond’s biggest challenge is perhaps living up to its past success,” wrote Deutsche Bank analyst Mike Baker in a Dec. 19 note to investors. “This includes generating among the highest operating margin and return on capital in hardline retailing and driving sales per foot substantially ahead of competitors.”
He rates the company “Hold.”
He added that the company has healthy square-footage growth and cash flow, but its operating margin is being squeezed as competitors offer promotions and same-store sales growth slows.

Posted by on December 31st, 2007 at 11:18 am

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