Wedbush Impressed With Bed Bath & Beyond's Passion And Commitment To Customers

However, the brokerage remains on the sidelines, citing gross margin pressures.

"[I]ncreasing price transparency, expanding couponing, channel conflict, channel mix shift and free shipping offers will continue to weigh on gross margins until the competitive environment settles, making the medium-term profit trajectory unclear," analyst Seth Basham said.

Basham expects the gross margin figures to have fallen less than the previous year's figure, as long as the company meets guidance. Further, the analyst noted that sales may benefit from "improving industry trends, planned lower free shipping thresholds and new online merchandise categories."

Related Link: Bed Bath & Beyond: Where Will Profit Erosion Stop?

"We further believe that the company's strong cash flows and balance sheet, awareness and adaptation to shifting consumer shipping behavior, and disciplined deductive management processes, led by tenured CEO Steve Temares, point to long-term staying power," Basham said.

Shares of Bed Bath & Beyond closed Monday's regular trading at $45.05 and were trading at $44.16, down 1.98 percent on Tuesday at time of writing. Basham has a price target of $42.

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