Bed Bath & Beyond, Inc. (BBBY) recently rebounded from a key trend line to move back within striking distance of the 52-week high on the heels of the company’s better expected Q3 results from early January.

Company Description

Bed Bath & Beyond, Inc., together with its subsidiaries, operates a chain of retail stores that sell a range of house and consumer goods in the United States. The company was founded in 1971, operates 1,083 stores and has a market cap of $10.74 billion.

Third-Quarter Results

Bed Bath & Beyond reported better than expected Q4 results on Jan 6 that sent its shares to a new 52-week high at $41.48. Sales for the period were up 10.8% from last year to $1.78 billion. Earnings also came in strong at 58 cents per share, 35% ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 10 cents, or 27%.

Same-store sales, a key retail metric, rose 7.3% from last year while the company’s gross margin gained a little more than two points to 41.1%. Bed Bath & Beyond also saw its SG&A expenses fall 2.5% to 38.9% of net sales. The company’s balance sheet looks strong too, with no debt and $1.2 billion in cash and equivalents.

Estimates Advance

The good quarter sent estimates higher, with the current year adding 25 cents to $2.16. The next-year estimate has added 30 cents to $2.47, a 15% growth projection.

Valuation

Shares of BBBY are trading with a forward P/E multiple of 19X, a premium to the overall market.

The Chart

Shares of BBBY recently rebounded from a trend line that has been supporting prices for most of the last 12 months to move back within striking distance of the 52-week high. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service.

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