Q1 Preview: Tough Comps Ahead, But Bed Bath & Beyond (BBBY) Can Handle It

Bed Bath & Beyond (Nasdaq: BBBY) shares are under pressure Wednesday afternoon heading into the company's first-quarter earnings report, expected out after the market closes.

The Street is looking for EPS of 84 cents on revs of $2.25 billion. If Bed Bath & Beyond can hit the estimates, earnings would be up 17 percent from the same period last year, but down from $1.48 reported in the typically strong fourth quarter.

With its last report, Bed Bath & Beyond said it sees first-quarter 2012 EPS of 79 cents to 83 cents.

Shares of the retailer rose 21 percent in the quarter to $72.25 at the end of May. Since the end of the quarter, shares have risen 2.4 percent and are up over 27 percent for 2012. Over the last 52 weeks, Bed Bath & Beyond shares have moved between $48.75 and $75.84.

Investors might look at retailers like Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) for hints at Bed Bath & Beyond's quarter. Target reported strong first-quarter results while boosting FY12 guidance. Wal-Mart also had a strong quarter and issued guidance that was inline with expectations.

Data from Bloomberg shows 16 analysts at Buy, 11 at Hold, and one with a Sell rating on Bed Bath & Beyond. The Street's price target average is $76.75, which spans from $66 up to $91.

Analyst Comments:

• Goldman Sachs sees EPS of 87 cents and comps up 5.5 percent, saying guidance has typically been conservative. The firm is expecting a subpar sequential trend in sales per foot, though last quarter was a big one with Green Mountain (Nasdaq: GMCR) Keurig and SodaStream (Nasdaq: SODA) systems selling well.
  
  
• Deutsche Bank sees comps up 4 percent leading to EPS of 83 cents. Deutsche said: "...we believe 1Q12 comps are on track, as the delta between industry sales and our comp estimate is similar to the delta in 4Q11, despite a 150 bps easier y/y compare in 1Q12."
  
  One of the bigger risks Deutsche noted investors might hone in on includes the potential for raising guidance. Right now, Bed Bath & Beyond sees fiscal 2012 EPS at $4.62, what would be up 14 percent. Deutsche is looking for high-single-to-low-double digit growth in 2012, or about 8 percent to 10 percent.
  
  
• Wedbush is expecting EPS of 84 cents with comps up 4 percent. The firm noted Bed Bath & Beyond's "most similar competitor HomeGoods (a 390-store division of TJX Companies) already reported Q1 comps up 9%, which bodes well for [the company]."

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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