Q4 Preview: Investor Focus Lies on Bed Bath & Beyond's (BBBY) Outlook

Bed Bath & Beyond Inc. (Nasdaq: BBBY) shares are trading in negative territory heading into the retailer's fourth-quarter 2011 numbers, expected out after the market closes Wednesday.

The Street is looking for earnings of $1.33 and revs of $2.66 billion. The company reported EPS of $1.12 and revs of $2.51 billion reported in the same period last year.

Shares of Bed Bath & Beyond fell just 1.3 percent over the quarter to end February at $59.74. The stock is up 11.3 percent since and nearly 15 percent higher in 2012. Over the last 52 weeks, Bed Bath & Beyond has traded within a range of $47.77 to $68.20.

With many of its peers showing increases in comps, things look good for Bed Bath & Beyond heading into the results.

Data from Bloomberg shows 16 analysts rate the stock a Buy, 12 are at Hold, and one is at Sell. The Street's price target average is $70, ranging from $63 to $80.

Analyst Comments

• Goldman Sachs sees sales of $2.65 billion and earnings of $1.33 per share, suggesting little in the way of risk-to-reward heading into the tape. Goldman noted since a miss in the third quarter of 2008, Bed Bath & Beyond has beat the consensus by double-digit gains nine out of 11 times. The firm said, "Acceleration in retail sector sales in Jan./Feb. and BBBY’s propensity for beating guidance suggest that this stance is conservative, but our framework has driven our forecasts above consensus or many quarters; it does not do so for 4Q."
  
  
• Wedbush sees EPS of $1.36 with comps of 4.5 percent. Wedbush acknowledged concerns Bed Bath & Beyond may have lost some exclusivity in two hot items: home soda makers and single-serve coffee brewers. Amid the wider distribution, Wedbush affirmed its belief Bed Bath & Beyond remained the top seller. The firm commented, "Longer-term, we do not see BBBY’s success as reliant on any particular hot products. With respect to threats from online competitors, such as Amazon’s casa.com, we believe online merchants have a very slim, if any, pricing advantage, and believe that the company’s marketing, coupons, and store experience will continue to drive strong traffic as well as its recent significant investments in E-C."
  
  
• Deutsche Bank sees EPS of $1.35 with comps up 4 percent. Though comps will be tougher, Deutsche noted sales trends are the strongest they've been since the first quarter of 2000. Deutsche believes there is potential for sales growth of at least 3 to 4 percent amid concerns of slowing sales.
  
  Looking ahead, Deutsche said, "In each of the last two years, BBBY has guided to next year EPS growth of 10% - 15% but has beaten it handily. If BBBY uses the same growth estimate for next year using consensus 2011 as the base, that would imply $4.30-$4.50 EPS for 2012 compared to consensus of $4.46. But, next year has an extra week, which we believe can materially help 4Q12. As a result, our 2012 EPS forecast is $4.69 on a 3.5% comp."

Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. You can also check out Bed Bath & Beyond's past performance at Streetinsider's Bed Bath & Beyond's Income Statement.

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