Bed Bath and Beyond Sees Big Gains After Improved Guidance

Shares of domestic store retailer Bed Bath and Beyond saw its shares soar over 20% after Wall Street learned that the company improved its guidance for 2019.

Bed Bath and Beyond announced that it is ahead of schedule in terms of slowing down the declines in operating profit and net earnings per share. The company also said it is increasing net earnings per share by 2020 and that its fiscal 2019 earnings per share will be about the same as 2018′s.

It was on Wednesday that the retailer said it had earned $0.18 a share in the third quarter. This was one penny higher than what analysts had been expecting according to data from Bloomberg. Revenue however was a slight miss at $3.03 billion while analysts had expected $3.04 billion.

Looking ahead, for this quarter, the company has earnings guidance of $2 per share, while analysts are waiting for $1.97 a share.

“Traction is taking hold with next-gen stores and assortment improvements, but these remain in their infancy, so near-term fundamentals should remain bleak,” said Jefferies analyst Jonathan Matuszewski this week.

“We’d prefer stabilization in comps and margins until becoming more constructive. We appreciate BBBY’s initiatives, but need to see more progress off a larger base. Valuation reflects uncertainty with turnaround materializing, encroaching online competition, and too many stores,” Matuszewski noted.

The analyst has a “hold” rating on the stock and lowered his price target to $15 from $16.

Disclaimer: We have no position in Bed Bath & Beyond Inc. (NASDAQ: BBBY) and have not been compensated for this article.