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   Non-TechBed, Bath, and Beyond (BBBY)


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To: Neil H who wrote (68)7/25/2003 9:39:03 AM
From: Neil H
   of 78
 
Bed, Bath & Beyond Adolescence
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The company argues that it can continue to grow, if at a slower pace. Management believes that Bed Bath & Beyond could have up to 950 stores in the long term.

But the company's first-quarter earnings report last month and its subsequent purchase of Christmas Tree Shops fanned the critical fires.


Although the company's earnings topped Wall Street's consensus, its revenue numbers fell short of the Street's rosier projections. The company opened just eight stores in the quarter, far off its previous pace, and its square footage was up just 15.5% over the same period last year. The company warned that store space and revenue growth would slow down from previous levels.

Meanwhile, some saw the acquisition of the 23-store Christmas Tree Shops as evidence the company knows its days of organic growth are nearing an end.

In a note issued earlier this month initiating coverage on the company, Collin McGranahan of Bernstein Research summed up the bear view. Bed Bath & Beyond is a maturing company whose days of growth are ending, McGranahan said. Square footage is already declining, he noted, and the only way for the company to continue to add stores is by expanding into smaller, less profitable markets or by cannibalizing the sales of existing stores, he said.

"We think [the] significant deceleration in Bed Bath store square-footage growth is lasting and will lead to [an] increased vulnerability to home furnishings cyclicality, moderation in comp-store sales trends and decelerating earnings growth," McGranahan said in his note. "Current valuation embeds an optimistic view of the medium- to longer-term growth potential. However, the stock remains relatively expensive today, and we think [price-to-earnings] multiple compression is likely from these levels, as investors discount decelerating earnings growth." (Bernstein doesn't do investment banking.)

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To: Neil H who wrote (69)7/25/2003 9:40:21 AM
From: Neil H
   of 78
 
Bed, Bath & Beyond Adolescence
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At the time of the Christmas Tree acquisition, Bed Bath & Beyond was trading at more than 30 times the company's projected current-year earnings, a pricey multiple for an established retailer. That was rich enough for some investors, and the stock is down 11.4% since it reported earnings last month. In contrast, the S&P Retail Index is up 2.3% in the same time period as companies such as Wal-Mart (WMT:NYSE - news - commentary - research - analysis), Target (TGT:NYSE - news - commentary - research - analysis) and Lowe's (LOW:NYSE - news - commentary - research - analysis) have held steady or gained.

Nevertheless, several sell-side analysts reiterated positive ratings after the earnings announcement. And some praised the company's Christmas Tree acquisition, saying that it would provide continued, complementary growth.


" [Bed Bath & Beyond's] back is not up against the wall. It is not acquiring out of a need to grow," wrote Banc of America Securities analyst Aram Rubinson in a report last month. "Rather, the acquisitions it is making are more integral to the core than most retail acquisitions. At the same time, Christmas Tree Shops may be a crucial sourcing and merchandising partner." (Banc of America Securities has an investment banking relationship with Bed, Bath & Beyond.)

One hedge fund analyst concurs, saying the recent selloff in Bed Bath & Beyond shares has been overdone.

The analyst, whose fund is long the stock, praises the company's management team, saying they've done a good job at managing Wall Street's expectations. As they've been in the past, Bed Bath & Beyond's managers are likely being conservative about square footage and earnings expectations to give themselves room to surpass expectations, said the analyst, who asked not to be named.

The company is continuing to open stores and is continuing to grow, the analyst said. Bed Bath & Beyond's same-store sales, which compare results at like outlets open for more than one year, grew by an impressive 4.4% in the first quarter, while other companies struggled, the analyst noted. And the acquisition is a better use of cash than buying back shares or paying a dividend, the analyst said.



"I think it's a real class story," the analyst said.

Maybe so, but the piling on of stores isn't necessarily a growth panacea. Analysts point to another one-time highflier that tried the same strategy and lost: Toys R Us (TOY:NYSE - news - commentary - research - analysis), which kept heaping big-box stores into smaller and smaller cities with decreasing returns. It now trades around $12 and at an earnings multiple of about 11.

Says another retail analyst: "Toys R Us proved that you can grow yourself into the ground."


Neil

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To: Neil H who wrote (70)7/25/2003 9:42:02 AM
From: Neil H
   of 78
 
I subscribe to Louis Navallatier Blue Chip Growth Letter and this is one of his selections. I have been studying but do not yet own.
Neil

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To: Neil H who wrote (71)7/25/2003 11:24:00 AM
From: Frederick Langford
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Technically, BBBY's 5 week MA is 39.40, a break of this number could indicate a short setup.

Fred

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From: Mark30004/4/2012 8:32:58 PM
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BBBY on fast money web extra 4/4/2012

heres the link:

http://marklexusblogpage.blogspot.com/2012/04/bbby-on-fast-money-web-extra.html

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From: Paul Senior12/31/2012 6:30:27 PM
   of 78
 
I'm a buyer at current price. With stock near a 12-mo. low, the price/book value, p/e, and p/sales numbers look attractive to me. Company's been profitable every year at least the past ten; roe is pretty decent.

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From: magno861/8/2013 2:32:15 PM
   of 78
 
i think that at 56,75 is a good entry point

the company had two bad trims, but is quite solid company

as you can see in last four Q gross margin :

nov 11 1.074.010 ago-11 1.032.669 may-11887.199 feb-11 1.163.669


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From: Paul Senior3/11/2013 12:54:05 AM
   of 78
 
Positive write-up in this week's Barron's:

"One of the country's most successful retailers is on the bargain counter.

Bed Bath & Beyond has generated 16% annual growth in earnings per share over the past 10 years. But its shares, at $59, trade for less than 12 times projected profit for its fiscal year that ends in February 2014. The stock (ticker: BBBY) trades at a discount to other top retailers', including Costco Wholesale (COST) and Target (TGT), neither of which has such a good profit history.

The shares could trade into the $70s in the next year, simply based on projected earnings gains and a higher price/earnings multiple. The insular company could attract interest from private-equity investors or even Berkshire Hathaway (BRK.A) if Bed Bath & Beyond's co-founders, Leonard Feinstein, 75, and Warren Eisenberg, 82, decide to sell. However, there is no indication that the company is looking to sell.

A BUYER MIGHT PAY $85 a share—roughly 10 times this fiscal year's projected earnings before interest, taxes, depreciation, and amortization (Ebitda)—consistent with prices paid for other quality companies, versus Bed Bath & Beyond's current modest valuation of 6.5 times. The company's $13 billion market value makes it large, but digestible. "This is a high-quality, cash-rich company that could see improving margins this year, particularly in the back half," says Laura Champine, an analyst at Canaccord Genuity who carries a $74 price target on the stock. Bed Bath & Beyond has commanded an average of 15 times forward earnings in the past seven years."

etc.

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From: Amaurizontal6/12/2019 6:29:43 PM
   of 78
 
Last message dates back to 2013 but I have been looking at Bed bath & Beyond for a while as I believe the stock price might be too low. I am still trying to figure if there is a significant enough margin of safety right now.

But when reading the last quarter report, I stumbled upon something quite strange and maybe you guys could give me some hindsights.

They showed a deficit in net income of $253M for the March 2 2019 Report. In fact, the company's management decided to charge against its income a $500M goodwill impairment loss. Without taking into consideration this accounting charge, the real net income should be $150M (when taking tax income into consideration).

Following this quarter report and some changes in the administration board due to two significant active shareholders' actions, the stock price plummeted (from 17.7 to 12.2)

I struggle to understand why companies charge against their income this kind of loss while it is neither a recurring loss, nor is it an operating risk. I believe it should be charged against its capital surplus.
Is there something I am missing here ?

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From: Glenn Petersen3/7/2022 3:53:21 AM
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Chewy Co-Founder Ryan Cohen Takes Large Stake in Bed Bath & Beyond, Pushes for Changes

Billionaire investor wants the chain to simplify its turnaround plan and consider a sale or separation of Buybuy Baby

By Cara Lombardo
Wall Street Journal
Updated March 6, 2022 7:06 pm ET

Ryan Cohen, the billionaire co-founder of online pet-products retailer Chewy Inc., CHWY 2.91% has a big stake in Bed Bath & Beyond Inc. BBBY -3.40% and is pushing the housewares retailer to streamline its strategy and explore strategic alternatives.

Mr. Cohen, who also serves as chairman of videogame retailer GameStop Corp. GME -5.70% , owns a 9.8% stake in Bed Bath & Beyond through his investment firm, RC Ventures LLC, according to a copy of a letter sent to its board Sunday that was viewed by The Wall Street Journal. That makes him a top-five shareholder in the New Jersey-based chain, which has a market value of roughly $1.6 billion.

Bed Bath & Beyond has hundreds of physical stores around the country and operates the Buybuy Baby and Harmon retail chains. While its shares initially received a boost from the pandemic, they have fallen over the past year and closed Friday at $16.18, not far from where they were three years ago.

The chain has a turnaround plan that includes reducing the number of products in its stores and launching new private-label brands. But this plan left it vulnerable to supply-chain issues roiling the retail industry and caused it to cede more sales to rivals such as Amazon.com Inc. and Target Corp. Some analysts who initially backed Chief Executive Mark Tritton’s plan are now questioning its viability.

Mr. Cohen says in the letter that Bed Bath & Beyond’s strategy is failing to stem sustained market share losses, noting that core sales dropped 14% from a year ago in the most recent quarter.

He urges the company to take two main steps: narrow the focus of its turnaround plan and maintain the right inventory mix to meet demand, and explore a separation of the Buybuy Baby chain or a sale of the entire company.

He writes that given Buybuy Baby’s growth trajectory, it could be worth several billion dollars. He also writes that the entire company could be better off in the hands of a private-equity firm.

He says the company should better align leadership compensation with results.

Far from a typical activist, Mr. Cohen gained a cult following after he built a big GameStop stake and in November 2020 criticized the company for moving too slowly toward e-commerce. He joined GameStop’s board in January 2021, which contributed to the Reddit-fueled jump in its shares that followed, and took over as chairman in June 2021.

GameStop’s shares are trading lower than they were a year ago, closing Friday at $111.66, but roughly 30 times where they were two years ago. At its peak in January 2021, the stock hit $347.51, giving the company a market value of over $20 billion. GameStop’s market value currently stands at about $8.5 billion. Its sales have been increasing.

Mr. Cohen says in the letter that given his focus on GameStop, he isn’t in a position to become a Bed Bath & Beyond director himself, but he doesn’t rule out his firm nominating directors if necessary. The window to nominate directors to the company’s board is open now and closes mid-March.

Raised in Montreal, Mr. Cohen co-founded Chewy in 2011. He served as its CEO through 2018 after leading the company to a $3.35 billion sale to PetSmart Inc. In addition to a sizable position in GameStop, RC Ventures has been a large shareholder of Apple Inc. for years.

This isn’t the first time that Bed Bath & Beyond has come under activist-shareholder pressure in recent years. Mr. Tritton was named CEO in 2019 after a trio of activists pushed to revamp the board, saying the company hadn’t adapted to the rise of e-commerce and shrinking profit margins. The activists reached a settlement agreement that put four new directors on the company’s board.

Write to Cara Lombardo at cara.lombardo@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the March 7, 2022, print edition as 'Investor Targets Bed Bath & Beyond.'

Chewy Co-Founder Ryan Cohen Takes Large Stake in Bed Bath & Beyond, Pushes for Changes - WSJ

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