Bed Bath & Beyond Jumps After It Tops Estimates, Starts Dividendby
Bed Bath & Beyond Inc. gained as much as 8.6 percent in late trading after posting better-than-expected results and announcing a quarterly dividend, easing concerns that the retailer is losing ground to online rivals.
Excluding some items, earnings amounted to $1.85 a share in the fourth quarter, which ended Feb. 27, the company said in a statement Wednesday. Analysts had predicted $1.81 on average. Sales rose to $3.42 billion, topping the $3.38 billion estimate.
The results helped restore faith in the company after a rocky start to the holiday season sparked investor fears. Analysts cut their ratings of the retailer in the wake of its third-quarter results, and the stock tumbled. The company’s strength -- home goods and bathroom supplies -- puts it in the cross hairs of e-commerce sites such as Amazon.com Inc.
To placate shareholders, Chief Executive Officer Steven Temares has been revamping the business and returning cash to investors. In addition to share repurchases, Bed Bath & Beyond said on Wednesday that it would initiate a quarterly dividend of 12.5 cents a share.
Still, growth remains muted. The company expects same-store sales to increase 1 percent to 2 percent this quarter. They gained 1.7 percent on that basis last quarter. Analysts had estimated 0.8 percent.
The stock rose as high as $53 in extended trading after the results were released. Bed Bath & Beyond had been up 1.2 percent this year through Wednesday’s close.