Goldman Sachs Cuts Bed Bath & Beyond's Q2 Expectations Following Q1 Report, Says 'Omnichannel Is Omnichallenged'

Goldman Sachs has cut its second-quarter estimates for Bed Bath & Beyond Inc. (NASDAQ: BBBY) following the retailer's first-quarter results, which fell short of both Goldman Sachs' and consensus' expectations on a top-line shortfall.

However, the brokerage said the result is "not shocking," as most retailers that guided prior to Easter fell short of forecasts.

Analyst Matthew Fassler cut the second-quarter EPS estimate to $1.13 from $1.19 to reflect softer core same-store sales and the One Kings Lane acquisition. The analyst's FY16/17/18 EPS estimates also fell to $4.70/$4.85/$4.60 from $4.85/$5.00/$4.70.

Related Link: Deutsche Bank Highlights Change Of Wording, Comps Forecast In Bed Bath & Beyond Guidance

The company reiterated its FY16 EPS guidance range of $4.50 to $5.00. The Street expects EPS of $1.21 for the second quarter and $4.99 for fiscal 2016 and $5.21 for fiscal 2018.

The company is focusing on providing a truly omnichannel experience for the shoppers, but the analyst is not enthused. In addition, the analyst said the company's "Look Love" style collections "thrusts BBBY into an already-crowded home fashion space, and introduces some fashion risk to the product."

As such, Fassler maintains his Sell rating on Bed Bath & Beyond, saying, "Omnichannel is Omnichallenged" investing to stay relevant is necessary, but not necessarily accretive."

Fassler also cut the price target to $46 from $47 on the stock, which is currently down 3.43 percent to $41.70 on the day.

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