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What to Expect From Bed Bath & Beyond's (BBBY) Q3 Earnings?

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Bed Bath & Beyond Inc. BBBY is slated to release third-quarter fiscal 2021 results on Jan 6. The leading specialty retailer is expected to deliver sales and earnings declines in the to-be-reported quarter. The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings is pegged at 2 cents per share, suggesting a 75% decline from the year-ago quarter’s reported figure. The consensus mark has moved down by a penny in the past 30 days.

The consensus estimate for fiscal third-quarter sales is pegged at $1.97 billion, indicating a 24.8% decline from the prior-year quarter’s reported number.

In the last reported quarter, the company delivered a negative earnings surprise of 35.5%. However, the bottom line beat estimates by 92.5%, on average, in the trailing four quarters.

Bed Bath & Beyond Inc. Price and EPS Surprise

Bed Bath & Beyond Inc. Price and EPS Surprise
Bed Bath & Beyond Inc. Price and EPS Surprise

Bed Bath & Beyond Inc. price-eps-surprise | Bed Bath & Beyond Inc. Quote

Key Points to Note

Bed Bath & Beyond has been witnessing challenges related to the ongoing supply-chain disruptions, cost inflation and a drop in store traffic due to the rising COVID-19 Delta cases. It has also been facing delays in bringing items to stores. Industry-wide concerns, including port congestions and elevated transportation costs, are expected to have further dampened the quarterly performance.

On the last reported quarter’s earnings call, management anticipated the headwinds to persist through part of the holiday season, thus, crushing hopes of a swift economic recovery. This is likely to have led to drab sales and earnings in the to-be-reported quarter.

Bed Bath & Beyond has been witnessing rising freight costs, owing to the industry-wide supply-chain constraints. On the last reported quarter’s earnings call, management expected higher freight costs to continue throughout fiscal 2021 and increase sequentially in the fiscal third quarter. This is anticipated to have affected the company’s profitability in the fiscal third quarter.

For the fiscal third quarter, management predicted an adjusted gross margin of 34-35%, reflecting the adverse impacts of the global supply-chain challenges. Adjusted EBITDA was expected to be $80-$85 million for the fiscal third quarter.

However, the company has been progressing well with the transformation plan, including store fleet optimization efforts and store remodeling programs. Its digital momentum and store rationalization efforts have been keeping it in good stride. The company has been on track with its planned rollout of Owned Brands as part of its three-year transformation plan. Gains from the efforts are expected to have partly aided the company’s performance in the to-be-reported quarter.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Bed Bath & Beyond this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Bed Bath & Beyond currently has a Zacks Rank #3 and an Earnings ESP of -100.00%.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Boot Barn BOOT has an Earnings ESP of +0.91% and it currently sports a Zacks Rank of 1. The company is expected to register top and bottom-line growth when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for BOOT’s quarterly revenues is pegged at $461.5 million, which suggests growth of 52.6% from the prior-year quarter’s reported figure.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Boot Barn’s quarterly earnings has been unchanged in the past 30 days to $1.98 per share, suggesting 98% growth from the year-ago reported number. BOOT has delivered an earnings beat of 35.3%, on average, in the trailing four quarters.

Archer Daniels Midland ADM currently has an Earnings ESP of +5.05% and a Zacks Rank #3. ADM is likely to register top and bottom-line growth when it reports fourth-quarter 2021 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $20.2 billion, which suggests growth of 12.3% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Archer Daniels’ quarterly earnings has moved up 3.4% in the past 30 days to $1.23 per share, suggesting growth of 1.7% from the year-ago quarter’s reported number. ADM has delivered an earnings beat of 23.4%, on average, in the trailing four quarters.

Starbucks SBUX currently has an Earnings ESP of +0.57% and a Zacks Rank #3. SBUX is anticipated to register top and bottom-line growth when it reports fourth-quarter 2021 results. The Zacks Consensus Estimate for the quarterly revenues is pegged at $7.99 billion, indicating an improvement of 18.4% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Starbucks’ bottom line has moved up by a penny in the past 30 days to 80 cents per share. The consensus estimate suggests growth of 31.2% from the year-ago quarter’s reported figure. SBUX has delivered an earnings beat of 15.3%, on average, in the trailing four quarters.


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Archer Daniels Midland Company (ADM) : Free Stock Analysis Report

Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report

Boot Barn Holdings, Inc. (BOOT) : Free Stock Analysis Report

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