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Bed Bath Gains As Analysts Sound Positive Ahead Of Q1 Earnings

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·1 min read
Bed Bath Gains As Analysts Sound Positive Ahead Of Q1 Earnings
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By Dhirendra Tripathi

Investing.com – Bed Bath&Beyond (NASDAQ:BBBY) rose more than 7% during Monday’s trading as two research houses sent out positive reports ahead of the retailer’s June 30 first quarter earnings announcement.

Baird analyst Peter Benedict believes the upcoming results appear biased to the upside based on robust sector demand and normal earnings seasonality.

The analyst said he is on the lookout to reengage with this "intriguing multi-year turnaround story," even as he maintained his neutral rating with a $30 target for the stock, a level breached in today’s rally. Bed Bath spent a brief time as a meme stock.

Another research firm, CFRA, said it believes the retailer’s turnaround scheme makes it worthy for even more traditional investors and said it sees a 40% rally in the stock price. 

Wednesday, Bed Bath said it will launch three new private-label brands, part of 10 such brands the store plans to offer. Private-labels are in-house exclusive brands that bring superior profit margins compared to those made by other manufacturers and sold by retailers.

For the first quarter, the company expects net sales to increase by over 40% versus the prior year period. Net sales for the first quarter ended May 30, 2020, were $1.30 billion.

It expects adjusted first quarter gross margin to be in the 34% range and expects to deliver between $80 million and $90 million in adjusted earnings before interest, taxes, depreciation and amortization.

For fiscal 2021, Bed Bath has guided for net sales and adjusted earnings of between $8 billion and $8.2 billion and between $500 million and $525 million, respectively.

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