J.P. Morgan Reiterates Neutral Rating on Bed Bath & Beyond Following 1Q13 Earnings

In a report published Thursday, J.P. Morgan analyst Christopher Horvers reiterated a Neutral rating and $68.00 price target on Bed Bath & Beyond BBBY.

In the report, J.P. Morgan noted, “Following BBBY's 1Q13 earnings, we are tweaking our FY13 and FY14 EPS estimates to $4.99 and $5.65, respectively. BBBY reported 1Q operating EPS of $0.93, in-line with consensus and our estimate. Same-store sales were 3.4%, roughly in-line with our estimate of 3%, driven by an increase in both average transaction amount and the number of transactions (with the transactions rebounding from a negative trend in 4Q). Gross margin declined a better than expected 50 bps (vs. 80E), attributed to increased couponing (redemption rate and amount), and a mix shift. SG&A increased 130 bps (vs. 70E), driven by higher payroll and advertising expenses and a ~100 bps impact from the inclusion of World Market's financial results, which has less efficiency as a percent of sales.”

Bed Bath & Beyond closed on Wednesday at $70.00.