Bed Bath & Beyond released its third quarter financial results after the closing bell on Thursday. Here’s what the results mean for mutual fund investors.
Inside BBBY’s Results
Earnings
The company reported earnings of $225.4 million, or $1.23 per share, down from $237.2 million, or $1.12 per share, last year. On average, analysts expected to see earnings of $1.19 per share.
Revenue
Revenue rose 2.7% to $2.94 billion from $2.87 billion. Analysts expected to see $2.97 billion in revenue.
Outlook
Looking ahead, BBBY expects fourth quarter earnings to be between $1.78 and $1.83 per share.
For FY2014, the company now expects to see earnings between $5.05 and $5.09 per share, compared to its prior outlook of earnings between $5.00 and $5.08 per share.
Analysts expect to see Q4 earnings of $1.80 per share and $5.04 per share for FY2014.
Low Revenue Growth
Bed Bath & Beyond is currently trading at 15x 2015 earnings estimates, but the stock appears to be overvalued due to its weak revenue growth. In its most recent results, the retailer reported revenue growth of just 3%, which is on the low side for a retail company. Fund managers and investors should consider waiting for this stock to bottom out before entering the position.
Mutual Funds to Watch
Investors interested in BBBY may also be interested in the funds listed below. These funds currently have the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| {% mutualfund FLPSX %} | Fidelity® Low-Priced Stock | 3.45% |
| {% mutualfund VTSMX %} | Vanguard Total Stock Market Index | 1.73% |
| ARTQX | Artisan Mid Cap Value Investor | 1.76% |
The Bottom Line
The funds above offer investors a diverse group of holdings. Investors interested in BBBY may also be interested in Williams Sonoma (WSM) and Pier 1 Imports (PIR).