Goldman Sachs Previews Bed, Bath & Beyond's Earnings

Goldman Sachs is out with a note previewing earnings from Bed Bath & Beyond, Inc. BBBY. It has a Neutral rating and a $60 price target on shares. In a note clients, Goldman writes, "We expect another earnings beat for BBBY when the firm reports May quarter results on June 22. We are positioned $0.03 above consensus, at $0.65 vs. $0.52 a year ago and the Street's $0.62. The difference between our outlook and the Street's stems mostly from higher sales and related SG&A leverage in our model, offset by a lower gross margin forecast, 20 bp below consensus, on the impact of higher cotton prices. Our sales forecast is supported by analysis of sequential sales trends and of the relationship between BBBY's sales growth and sector sales growth. Note that the difference between our forecast and the Street moderates in 2Q, and we stand below consensus in the second half of the year, as we model gross margin challenges and moderating sales trends as the year progresses." Shares of BBBY gained 60 cents yesterday to close at $52.59, a gain of just over 1%.