Shares of Bed Bath & Beyond Inc. (BBBY: Quote) slid six percent in after-hours trade on Wednesday, after the home furnishing retailer reported a lower profit for the second quarter, as its gross margin came under pressure and general costs escalated. Quarterly sales meanwhile rose a robust twelve percent owing to recent acquisitions and a not-so-impressive growth in same-store revenues. Its earnings came in below Street estimates, while sales surpassed their view.
Moving forward, Bed Bath & Beyond provided earnings outlook for the third quarter, the midpoint of which is indicated to miss the Street. The company reaffirmed its expectations for the full year.
Union, New Jersey-based Bed Bath & Beyond operates a chain of retail stores. Over the past year, the company has managed to report steady profit on strong demand for its wide variety of domestic merchandise and home furnishings.
The company reported second quarter net income of $224.3 million, a decline from $229.4 million last year. On a per share basis, quarterly earnings improved to $0.98 from $0.93, to reflect a lower share count.
On average, 25 analysts polled by Thomson Reuters expected earnings of $1.02 per share for the quarter. Analyst estimates typically exclude one-time items.
Sales for the quarter totaled $2.59 billion, compared to $2.31 billion last year. Twenty-two analysts estimated sales of $2.54 billion.
On a same-store basis, sales were up 3.5 percent in the quarter, but lower than the 5.6 percent growth recorded a year ago.
The 2012 quarter include results of Linen Holdings, a business-to-business distributor, and retailer Cost Plus Inc., both of which were acquired in June.
At the end of the quarter, Bed Bath & Beyond ran 1,449 stores, including 1,000 namesake stores, and 258 stores under the names of World Market, Cost Plus World Market, and World Market Stores.
During the quarter, the company repurchased nearly 3.1 million of its common stock for about $199 million. As of August 25, the company had a balance of $414 million under its repurchase program.
Bed Bath & Beyond expects third quarter earnings of $0.99 to $1.04 per share, while analysts currently expect earnings of $1.02 per share.
For the full year, the company continues to expect earnings to increase by a high single to a low double digit percentage.
BBBY closed Wednesday at $68.79, up 0.58%, on a volume of about 3.8 million shares on the Nasdaq. In after hours, the stock dropped $3.77 or 5.48%. In the past year, the stock traded in a range $53.15 - $75.84.
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by RTT Staff Writer
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