Bed Bath & Beyond (BBBY) shares slid 9% in midday trading after the company missed earnings expectations and posted same-store sales growth that was weaker than some analysts expected. The company’s 98 cents of earnings per share missed expectations by a nickel.
Earnings fell year over year to $224 million from $229 million, the first year-over-year drop in three years. Sales got a boost from the company’s acquisition of Cost Plus� and distributor Linen Holdings, but selling, general and administrative costs jumped 15%. Gross margin fell to 39.8% from 41.1%.
Analysts were unclear how to value the new expanded company, with Nomura analyst Aram Rubinson writing that he had� “more questions than answers.”
“We are still not sure why BBBY bought these two businesses. We are also unclear as to how to contemplate one-time factors that are probably affecting the consolidated results. We believe a Neutral rating is appropriate, but with more �Q� (questions) than �A� (answers), we will wait for the �Q� (10Q) to fine-tune estimates.”
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