BBBY - Embedded Expectations Analysis - 2018 11 14
Bed Bath & Beyond Inc. (BBBY:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 18.8x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm, and management may have concerns about their ability to increase profitability, their BABY and decorative furnishings categories, and online platformSpecifically, management may lack confidence in their ability to expand and enhance their assortment offering, and to refocus their efforts to create efficiencies and drive profitability. They may also have concerns about their decorative furnishing web sales, and about their ability to achieve their expected freight savings over the next few years. Moreover, they may be exaggerating the strength of their positioning for One Kings Lane within the custom furniture market, and may lack confidence in their ability to establish the positioning of their website and retail stores as a cobranded experience. Furthermore, they may lack confidence in their ability to maintain strength in their BABY category, and growth in their decorative furnishing category. Finally, they may lack confidence in their ability to effectively purchase product for their hotspot and deep-value categories, and to drive margin growth while investing in their customer value proposition
Bed, Bath & Beyond is an omnichannel retailer providing products, services and solutions for the home and life events. The company operates an ecommerce platform consisting of various websites and applications, including bedbathandbeyond.com, bedbathandbeyond.ca, harmondiscount.com, and facevalues.com. The company sells an assortment of domestics merchandise and home furnishings. Domestics merchandise includes categories such as bed linens and related items, bath items and kitchen textiles. Home furnishings include categories such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings (including furniture and wall decor), consumables and certain juvenile products.
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