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Shares of
were on the rise Monday, two days ahead of its fiscal first-quarter earnings. The market seems to be agreeing with a Baird analyst who sees an upbeat report coming from the home furnishings retailer.
Bed Bath (ticker: BBBY) was up 4.5% to roughly $30 in premarket trading. Analyst
Peter Benedict
reiterated a Neutral rating and $30 price target on shares of the retailer, although he wrote that the “bias to fiscal first-quarter results is higher based on robust sector demand” as well as a more normalized earnings environment.
The company’s outlook assumes core sales growth will climb between 65% and 70% year over year, and rise in the low single-digit range from the same prepandemic period in 2019. Benedict noted that
(TGT) and
’ (TJX) home furnishings business saw much bigger increases. While Bed Bath’s comparable sales have been lagging behind the overall industry’s, Benedict said that “the sheer dollar growth across the sector would seemingly suggest upside potential” for the results.
Moreover, the return of in-person weddings and a more traditional back-to-college season should bolster the company going forward.
Benedict was also upbeat about the rapid pace of recent private label brands from the company. CEO
Mark Tritton
told Barron’s those brands will be a key part of Bed Bath’s strategy going forward. “With another three (or more) on tap this fiscal year, Bed Bath’s merchandising transformation is well underway,” Benedict wrote. “When combined with benefits from store refreshes and larger scale remodels…Bed Bath has micro catalysts that should spur incremental demand.”
That said, he hoped to see more progress in terms of stabilizing store traffic and comparable sales before getting bullish again.
Benedict originally downgraded Bed Bath in January when it was swept up in the meme trade. That’s continued to propel the stock in recent weeks, and the shares are up nearly 63% since the start of the year, and 167.4% in the past 12 months.
Write to Teresa Rivas at teresa.rivas@barrons.com
