Bed Bath And Beyond Case Analysis

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Abstract
Bed Bath and Beyond is a home décor retailer established in 1971 and began selling its shares in 1992 on the NASDAQ stock market (Corporate Responsibility, n.d.). Today its common stock is trading at $41.19 (Bed Bath & Beyond Inc. Common, 2016), 49% below the “March 2014 closing peak of $80.48” (Lara, 2016). This analysis will explore Bed Bath and Beyond Inc.’s current situation as it relates to the stock market, past performance, and how it will compete for future growth, to determine if we should add this company to our portfolio and what the expected rate of return should be if our hedge fund decides to invest. Analysis of Bed Bath & Beyond Inc.
Bed Bath & Beyond’s stock prices have been steadily declining since the second quarter …show more content…

According to its annual financial reports Bed Bath & Beyond has shown a small but steady increases in sales and revenue for the past four years (Appendix, Bed Bath & Beyond Inc., 2016). But only by 3.28% for 2015, compared to 14.89% in 2013, showing a decline in growth (Bed Bath & Beyond Inc., 2016). Although this company’s net income growth has been declining over the last three years its gross profit margin is higher than industry the average at 38.17% (Bed Bath & Beyond Inc., 2016). Since 2010, the company has spent over $7.5 billion repurchasing its stock to increase outstanding stock value, demonstrating Bed Bath & Beyond’s commitment to its shareholders (Duprey, …show more content…

However, the company could repurchase the last of its scheduled $2 billion stock buyback plan to increase shareholder earnings. The company’s first dividend payment policy is not the only news this year for Bed Bath & Beyond. It recently paid “$11.78 million to acquire online retailer One Kings Lane” that specialized home furnishing, an area that Bed Bath & Beyond was missing to compete with Amazon and Wal-Mart’s e-commerce operations (Primack, 2016). Coupled with its recent stock repurchase, the $12 million acquisition, does explain the firm’s decline in net income, plus its recent addition of the new online subscription model. Signaling to the investors that Bed Bath & Beyond is positioning itself to compete with the box

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