Bed Bath & Beyond Set for Usual Earnings Pop

Try a call option to profit next week

Despite the doldrums between earnings periods, next week offers up a number of well-known names that could provide some fireworks.  One retail name that we’ve had success trading in Winning Edge is Bed Bath & Beyond (NASDAQ:BBBY).  The home goods retailer reports second-quarter numbers next Wednesday after the market close.

Analysts are looking for a profit of 84 cents a share, a 20% increase compared to a year ago.  While that may appear daunting for a retailer in the current economy, the company has turned in average growth of 33% over the past four quarters.  And even though the whisper number is two cents higher than the analyst figure, it falls well short of BBBY’s recent strong performance.

The company has an enviable track record of meeting or beating the consensus analyst estimate.  In fact, BBBY hasn’t missed an estimate in the past 18 quarters.  And stock performance after recent beats has been impressive, including a 10.4% one-day jump last quarter.

The stock is currently flirting with the all-time high just above the $60 mark reached in July.  Though that level has provided strong resistance to date, another positive earnings beat should do the trick.  Buy the October 60 call for $2.80 or less.

Have a great trading week.

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