Can Bed Bath & Beyond Or Rite Aid Overcome Low Earnings Expectations?

The focus now is on the holiday shopping season, a time when many retailers grow desperate to succeed, if not simply to survive. Two retailers will pause this week to look back at the most recent earnings results: Bed Bath & Beyond Inc. (NASDAQ: BBBY) and Rite Aid Corporation (NYSE: RAD).

The consensus Wall Street forecast sees marginal top-line growth but profits that slipped for the home furnishings purveyor, for a quarter in which it tested a membership program.

On the other hand, for investors in the third largest drugstore chain in the United States, any news about the upcoming merger with Walgreens Boots Alliance Inc (NASDAQ: WBA) may overshadow what are expected to be unexciting results.

Bed Bath & Beyond

When Bed Bath & Beyond shares its fiscal third-quarter results, analysts on average predict earnings per share will have shrunk by a dime from a year ago to $0.99. But the $3.01 billion in expected revenue is likely to be about a 2-percent gain. Note that this New Jersey-based retailer fell short of consensus EPS estimates by at least a nickel in the past two quarters.

The forecast from 14 Estimize respondents is in the same ballpark, with EPS expected to come in at $1.00. The consensus revenue estimate for the three months that ended in November is $3.02 billion. Note that, like Wall Street, Estimize underestimated top- and bottom-line results in the previous two quarters.

Rite Aid

Wall Street's consensus forecast for Rite Aid calls for EPS to have slipped from $0.06 in the same period of last year to $0.04. While the Pennsylvania-based company matched analysts' EPS expectations in the previous quarter, it fell handily short in the quarter before that. The nine Estimize respondents have a consensus estimate of $0.05 per share for the three months that ended last month.

Estimize overestimated revenue in the previous quarter, and this time, the respondents are looking for $8.24 billion, a bit more optimistic than the Wall Street consensus forecast for the fiscal third quarter of $8.22 billion. Either figure would be only marginally higher than in the year-ago period, and yet they represent the second-highest top-line figure in the past eight quarters.

Bed Bath & Beyond is scheduled to report its latest results after the closing bell on Wednesday, while Rite Aid is expected to share its numbers the following morning.

Best Of The Rest

Other companies anticipated to report earnings growth this week include Accenture, CarMax, Darden Restaurants, FedEx, General Mills, Lennar, Micron Technology, Navistar and Paychex.

But if analysts are correct, earnings at Nike will be smaller than a year ago, and a net loss is in the cards for BlackBerry.

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