Bed Bath & Beyond earnings: not beyond reproach

Investors didn't have a whole lot of confidence in Bed Bath & Beyond Inc. (NASDAQ: BBBY) ahead of tonight's earnings report - the stock hit a new 52-week low during the trading day. Under the unforgiving glare of the earnings spotlight tonight, the domestics retailer said third-quarter profit fell to $138.2 million from $142.4 million in the year-ago period. Earnings on a per-share basis edged up to 52 cents from 50 cents, matching analysts' expectations.

Net sales for the quarter were 10.8% higher at $1.795 billion, and comparable store sales in the reporting period edged up 0.8%. In the year-ago third-quarter period, same-store sales grew by 4.6%. According to Thomson, analysts were expecting revenue of $1.765 billion.

For the fourth-quarter, BBBY officials expect same-store sales to be virtually flat, leading to per-share earnings between 64 and 67 cents per share. This is well south of analysts' mean estimate of 77 cents per share, according to Reuters.

The poor fourth-quarter guidance is not sitting well with investors, who have sent BBBY reeling nearly 9% lower in after-hours trading. This move will bring the stock deeper into new-annual-low territory. In fact, a move of this magnitude come tomorrow morning, should the selling persist, would put the shares in the neighborhood of a six-year low. Bed Bath & Beyond shareholders may not be enjoying a good night's sleep tonight.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.