Bed Bath & Beyond tumbles after Q4 results (BBBY)

Bed Bath & Beyond reported mixed fourth-quarter results on Wednesday evening.
Shares plunged 8.5% as investors digested the report.
Bed Bath & Beyond was up 71% this year through Wednesday, spurred by an activist investor’s call for a management shakeup.
Watch Bed Bath & Beyond trade live.

Bed Bath & Beyond reported mixed fourth-quarter results and guidance on Wednesday evening, sending shares down 8.5% early Thursday.

"Shares are down as investors digest the reality that a sustained trend of MSD% declines in brick & mortar comps and EBIT% deterioration suggest an inflection in fundamentals is not in the near-term horizon," Jefferies analyst Jonathan Matuszewski said in a Thursday note to clients. He has a "hold" rating and $17 price target — about 4% below where shares were trading Thursday.

The retailer lost $1.92 a share on a GAAP basis, missing the earnings of $1.11 that analysts surveyed by Bloomberg were expecting. On an adjusted basis, excluding a non-cash goodwill and tradename impairments charge, Bed Bath & Beyond earned $1.20 a share, topping the $1.11 that was anticipated.

Revenue was a bit light, coming in at $3.3 billion versus the $3.33 billion Bloomberg consensus. Comparable sales also fell just short, printing down 1.4% against the down 1.3% consensus.

"During the fourth quarter and throughout fiscal 2018, we have been driving significant foundational change across our business," said CEO Steven Temares.

"The pace of our transformation accelerated during fiscal 2018 and we made measurable progress within each of our four focus areas of our plan. While this is a multiyear effort, our Board and management team are confident that the actions underway to drive our near-term and long-term financial targets will enable Bed Bath & Beyond to succeed and drive shareholder value."

Looking ahead to fiscal year 2019, the retailer sees adjusted earnings of $2.11 to $2.20 a share.

Bed Bath & Beyond shares have had a strong start to 2019, up more than 71% through Wednesday, propelled by the activist investors Legion Partners Asset Management, Macellum Advisors, and Ancora Advisors calling for a management shakeup. Back in March, the trio, which combined owns about 5% of the company, called for the outing of Temares and said it was seeking a review of options, including a sale, according to Reuters.

The group called for more transparency after Wednesday’s report.

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