Bed Bath & Beyond tops analysts’ forecasts for earnings and revenue in Q4

Written by: Wajeeh Khan
April 28, 2020
  • Bed Bath & Beyond posts £2.49 billion in revenue in Q4 and makes 31 pence of earnings per share.
  • The retailer records a 5.6% decline in comparable sales but a 16% increase in online sales.
  • The company suspends dividend payments and share buyback in 2020 on COVID-19 uncertainty.

Bed Bath & Beyond (NASDAQ:BBBY) released its quarterly financial results on Wednesday. Beating analysts’ estimates for earnings and revenue in the fourth quarter, Bed Bath & Beyond jumped around 15% in after-hours trading on Wednesday. In the regular session, the stock had dropped around 17% on Wednesday.

The American chain of domestic merchandise retail stores, however, cited the rising uncertainty of the Coronavirus pandemic and said that it is impossible to give meaningful financial guidance for 2020 at this stage.  

Bed Bath & Beyond’s Financial Results Versus Analysts’ Estimates

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

According to Refinitiv, experts had forecast the retailer to print £2.46 billion in revenue in the fourth quarter. Their estimate for earnings per share (EPS) was capped at 16 pence per share. In its financial report on Wednesday, however, Bed Bath & Beyond boasted a higher revenue of £2.49 billion in Q4 and said that it made 31 pence of earnings per share in the recent quarter.

At £52 billion, the retailer’s net loss came out significantly narrower than £204 billion that was recorded in the same quarter last year. Its Q4 revenue was 6% higher than the year-ago figure.

The earnings report on Wednesday also highlighted that the retailer’s comparable sales saw a 5.6% decline in the fourth quarter. Bed Bath & Beyond, however, boasted a massive 16% increase in its online sales.

The fourth quarter ended on 29th February when the Coronavirus outbreak hadn’t pushed the U.S businesses into temporarily halting operations. The impact of the health crisis, therefore, is yet to show in the retailer’s financial performance. As of now, all of its stores other than Harmon Face Values and Buybuy Baby are shut down until May 2nd.  

Bed Bath & Beyond said on Wednesday that it delayed planned expenses worth £120 million including store remodelling. The retailer also plans on minimizing discretionary expenses including advertising and business travel.

Tip: looking for an app to invest wisely? Trade safely by signing-up with our preferred choice, eToro: visit & create account

Retailer To Prioritize £200 Million In Essential Expenditures

The retailer will instead prioritize around £200 million of what it called essential expenditures targeted at expanding pick-up options at its stores and optimizing the digital business.

According to CEO Mark Tritton, online orders for items like bread makers, coffee makers, and vacuums have surged during social distancing. The retailer, therefore, will turn around 25% of its U.S and Canada-based stores (both Buybuy Baby and Bed Bath & Beyond) into regional fulfilment centres temporarily to ensure timely deliveries during the health emergency.

Bed Bath & Beyond also suspended dividend payments and share buybacks in 2020. Combined with debt reduction, the move is expected to save roughly £480 million for the retailer.