Bed Bath & Beyond Earnings: Increased Costs Strains Margins as Profit Drops

S&P 500 (NYSE:SPY) component Bed Bath & Beyond Inc. (NASDAQ:BBBY) reported its results for the second quarter. Bed Bath & Beyond is a chain of retail stores that sells products for the home.

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Bed Bath & Beyond Inc. Earnings Cheat Sheet

Results: Net income for Bed Bath & Beyond Inc. fell to $224.3 million (98 cents per share) vs. $229.4 million (93 cents per share) a year earlier. This is a decline of 2.2% from the year-earlier quarter.

Revenue: Rose 12.1% to $2.59 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Bed Bath & Beyond Inc. beat the mean analyst estimate of 84 cents per share. It beat the average revenue estimate of $2.25 billion.

Key Stats:

Last quarter’s profit decreases breaks a four-quarter run of profit increases. In the first quarter, net income rose 14.5% from the year earlier, while the figure increased 23.8% in the fourth quarter of the last fiscal year, 21.2% in the third quarter of the last fiscal year and 26.2% in the second quarter of the last fiscal year.

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 15 cents in the first quarter, by 7 cents in the fourth quarter of the last fiscal year, and by 9 cents in the third quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 5.1% to $2.22 billion in the first quarter. The figure rose 9.1% in the fourth quarter of the last fiscal year from the year earlier and climbed 6.8% in the third quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the third quarter has moved up from $1.06 a share to $1.08 over the last ninety days. For the fiscal year, the average estimate has moved up from $4.47 a share to $4.63 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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