Bed Bath & Beyond Misses Profit Targets

by InvestorPlace Staff | September 20, 2012 10:56 am

Kitchen, bath and bedroom merchandise retailer Bed Bath & Beyond (NYSE:BBBY[1]) reported lowered profitability across it’s more than 1,000 retail stores, with net income falling 2.2% during the recent second quarter earnings period, below analyst estimates.

The news sent BBY stock down over 8% in morning trading, and reversing what had been a nearly 10% year-to-date increase in both earnings[2] and the stock.

The company’s Investor Relations press release[3] was quick to point out that revenue growth continues, as net sales for the fiscal second quarter of 2012 increased approximately 12.1% from net sales  in the fiscal second quarter of 2011. However, comparable-store sales were down over the same period at 3.5%, compared with an increase of approximately 5.6% in last year’s fiscal second quarter.

BBBY has been using a discount coupon campaign to drive traffic into its stores during the slow economic times, and the result has been a cut in profitability on sales. Profit per share did increase in the second quarter, up to 98 cents per share from 93 cents per share, but the rise was attributable to fewer shares outstanding as BBBY repurchased approximately $199 million of its common stock representing approximately 3.1 million shares.

BBBY is anticipating a third quarter profit of up to $1.04 per share, one cent per share above estimates.

-Written by IP Staff

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