A bumpy ride for Bed Bath & BeyondApril 11, 2013: 2:32 PM ET
Bed Bath & Beyond got a boost Thursday after the home goods retailer reported stronger-than-expected revenue.
While earnings were in line with forecasts, investors cheered the sales figures. Net sales rose nearly 25%, while same store sales -- a key metric of consumer spending -- nudged up 2.5%
Shares of Bed Bath & Beyond (BBBY) rallied more than 4% Thursday before pulling back.
Some of the retreat could be due to the low same store sales figures. But UBS analysts point out that it was a tough quarter all around for consumer spending and raised their price target on the stock to $68 from $64.
"The notable takeaway for the skeptics was that the company's gross margin declined at an accelerating rate despite an easier comparison," analyst wrote in the report.
Still, they kept a neutral rating on the stock so there is a case to be made for being cautious.
StockTwits traders were mostly in Bed Bath & Beyond's corner.
Not too shabby for a company that's faced stiff competition from the likes of Amazon (AMZN). A recent study said shoppers will stroll through Bed Bath & Beyond's aisles to get a "feel" for the products they want, only to turn around and buy them online.
With those kinds of sales figures, it seems as though the retailer must be doing something (or a number of things) right.
Haha. Good one RocketBaxter. And very good question, given how eventful last month's Apple shareholder meeting was.
That's a good point. Bed Bath & Beyond has done a fair amount of buying back its own stock -- a healthy sign. It bought back $305 million during the latest quarter, and has $2.4 billion left under its current authorization.
But as UBS analysts point out, the retailer may want to consider joining the dividend party.
"The company would be well-served by having a more balanced approach," wrote the analysts, and I have to agree. Keeping anything balanced usually pays off in the long run.