Bed Bath & Beyond Earnings Update: BBBY stock rockets higher despite disappointing quarter
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UPGRADE- BBBY shares spiked 12% on Thursday after dropping 6% in the premarket.
- Bed Bath & Beyond lost $25 million in the fiscal third quarter on an adjusted basis.
- BBBY revenue dropped 28% QoQ.
Bed Bath & Beyond (BBBY), the home goods retailer, produced disappointing fiscal third quarter earnings but still managed to spike more than 10% on Thursday's open. When the results came out before the market opened, the premarket sent BBBY shares down 6%. Being that the stock has been a retail favorite for much of 2020, it appears this price mismatch demonstrates that institutions are selling while retail traders are buying.
BBBY Stock News: a lacklustre quarter
Bed Bath & Beyond (BBBY) reported revenue of $1.88 billion in the fiscal third quarter, a stark 28% decline from the same quarter one year ago. The adjusted net loss came in at $25 million, or -$0.25 per share, compared with the year ago quarter's $10 million profit, or $0.10 per share.
CEO Mark Tritton blamed the supply chain for the company's dismal quarter. "Overall, sales were pressured despite customer demand due to the lack of availability with replenishment inventory and supply chain stresses that had an estimated $100 million, or mid-single digit, impact on the quarter and an even higher impact in December," he said.
Bed Bath & Beyond revenue has been falling on an annual basis since 2018. Under a restructuring plan, the retailer closed dozens of stores in 2021. On Wednesday, the company said it would shutter another 37 in 19 states by the end of February.
BBBY key statistics
| Market Cap | $1.5 billion |
| Price/Earnings (Forward) | 10 |
| Price/Sales | 0.2 |
| Price/Book | 1.9 |
| Enterprise Value | $3.6 billion |
| Operating Margin | 3.7% |
| Profit Margin |
-2% |
| 52-week high | $53.90 |
| 52-week low | $13.32 |
| Short Interest | 47% |
| Average Wall Street Rating and Price Target | Hold, $17.75 |
BBBY Stock Forecast: not looking good, folks
BBBY's surge on Thursday may be a welcome sign to those who happen to own the stock and are hoping for a turnaround. In the big picture, however, a company with plans to close as many as 200 stores overall can expect a lot of tears for investors in the short-term.
Is this 10% gain the beginning of a turnaround? Here at FXStreet, we are doubtful. Thursday's gain seems to be the product of retail investors trying to invoke a short squeeze. With 47% of the BBBY float shorted, a significant updraft could force bears to cover their shorts, which in turn pushes the share price even higher in a vicious cycle i.e. other meme stocks like GameStop (GME) and AMC Entertainment Holdings (AMC) from last year.
Currently, BBBY is sitting near lows from October in the $14 range. Bulls are hoping this is the bottom. It would be less than surprising, however, if BBBY sank to support near $12 or even $8. With the entire market given over to bears of late, it seems pessimism is the better horse to bet on.
As can be seen on the weekly chart below, BBBY usually bounces off the 30 level on the Relative Strength Index (RSI). With the RSI currently at 36, it would appear that the carnage is not over yet.
BBBY 1-week chart
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- BBBY shares spiked 12% on Thursday after dropping 6% in the premarket.
- Bed Bath & Beyond lost $25 million in the fiscal third quarter on an adjusted basis.
- BBBY revenue dropped 28% QoQ.
Bed Bath & Beyond (BBBY), the home goods retailer, produced disappointing fiscal third quarter earnings but still managed to spike more than 10% on Thursday's open. When the results came out before the market opened, the premarket sent BBBY shares down 6%. Being that the stock has been a retail favorite for much of 2020, it appears this price mismatch demonstrates that institutions are selling while retail traders are buying.
BBBY Stock News: a lacklustre quarter
Bed Bath & Beyond (BBBY) reported revenue of $1.88 billion in the fiscal third quarter, a stark 28% decline from the same quarter one year ago. The adjusted net loss came in at $25 million, or -$0.25 per share, compared with the year ago quarter's $10 million profit, or $0.10 per share.
CEO Mark Tritton blamed the supply chain for the company's dismal quarter. "Overall, sales were pressured despite customer demand due to the lack of availability with replenishment inventory and supply chain stresses that had an estimated $100 million, or mid-single digit, impact on the quarter and an even higher impact in December," he said.
Bed Bath & Beyond revenue has been falling on an annual basis since 2018. Under a restructuring plan, the retailer closed dozens of stores in 2021. On Wednesday, the company said it would shutter another 37 in 19 states by the end of February.
BBBY key statistics
| Market Cap | $1.5 billion |
| Price/Earnings (Forward) | 10 |
| Price/Sales | 0.2 |
| Price/Book | 1.9 |
| Enterprise Value | $3.6 billion |
| Operating Margin | 3.7% |
| Profit Margin |
-2% |
| 52-week high | $53.90 |
| 52-week low | $13.32 |
| Short Interest | 47% |
| Average Wall Street Rating and Price Target | Hold, $17.75 |
BBBY Stock Forecast: not looking good, folks
BBBY's surge on Thursday may be a welcome sign to those who happen to own the stock and are hoping for a turnaround. In the big picture, however, a company with plans to close as many as 200 stores overall can expect a lot of tears for investors in the short-term.
Is this 10% gain the beginning of a turnaround? Here at FXStreet, we are doubtful. Thursday's gain seems to be the product of retail investors trying to invoke a short squeeze. With 47% of the BBBY float shorted, a significant updraft could force bears to cover their shorts, which in turn pushes the share price even higher in a vicious cycle i.e. other meme stocks like GameStop (GME) and AMC Entertainment Holdings (AMC) from last year.
Currently, BBBY is sitting near lows from October in the $14 range. Bulls are hoping this is the bottom. It would be less than surprising, however, if BBBY sank to support near $12 or even $8. With the entire market given over to bears of late, it seems pessimism is the better horse to bet on.
As can be seen on the weekly chart below, BBBY usually bounces off the 30 level on the Relative Strength Index (RSI). With the RSI currently at 36, it would appear that the carnage is not over yet.
BBBY 1-week chart
Like this article? Help us with some feedback by answering this survey:
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