Home goods retailer Bed Bath & Beyond (BBBY) recently reported fiscal 2017 results and gave guidance for the coming years. Guidance for earnings per diluted share (EPS) for fiscal 2018 was well below the fiscal 2017 level and also well below consensus expectations. It was also well below our expectations, which motivated us to take a closer look. We believe that the guidance provided by management is mathematically implausible and appears overly bearish.
Purpose of this article
We will walk through why we think the company’s guidance is mathematically challenging and discuss the possible motivations and ramifications of such implausible communication. We will also give a short update on our thesis, positioning and strategy regarding the company.
