What To Expect From Bed Bath & Beyond’s Q1 Earnings
Bed Bath & Beyond (NASDAQ:BBBY) is scheduled to announce its fiscal first quarter earnings on Thursday, June 22 after market close. In Q4 2016, the retailer’s revenue increase 3% year-over-year (y-o-y) to 3.53 billion, primarily due to a 3% y-o-y increase in non-comparable sales, including PMall, One Kings Lane and new stores, and a 0.4% y-o-y increase in comparable sales. The company also posted diluted earnings $1.84 per share, which declined 4% y-o-y.
In fiscal 2016, Bed Bath & Beyond reported more than a 20% increase in its comparable sales growth from customer-facing digital channels over the corresponding period in the prior year. However, this increase was not able to offset the company’s declining foot traffic from its physical stores, and as a result its comparable store sales declined 0.6% in fiscal 2016. We expect this trend to continue into the first quarter as well.
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Future Outlook
Reuters’ compiled analyst estimates forecast revenues of $2.79 billion and earnings of 66 cents per share for Q1 2017, implying growth of about 2% and (17%), respectively.
For full year 2017, Bed Bath & Beyond expects a low to mid single-digit percentage increase in consolidated net sales. The company also expects flat to slightly positive comparable sales for the full year, on the back of continued strong growth in the customer-facing digital channels. However, we expect margin pressure to continue in fiscal 2017, due to an increase in net direct-to-customer shipping expense and coupon expense.
In addition, the company expects its full year capital expenditures to range between $400 million and $425 million, of which more than half of the spend is planned for technology-related projects in support of its growing omni-channel capabilities. The retailer plans to open 30 new stores and close approximately 15 to 20 stores in 2017. The company also expects its net diluted earnings per share to decline in the range of low single-digit to 10% in fiscal 2017, due to continued margin pressures from ongoing investments and higher anticipated tax rate.
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