Bed Bath & Beyond Plummeting After Reporting Earnings (BBBY)

Bed Bath & Beyond BBBY released their quarterly earnings this afternoon after the closing bell. The company reported first quarter net earnings of $137.6 million or $0.52 per share compared to $87.2 million or $0.34 per share in the year ago period. Wall Street analysts had anticipated BBBY would report EPS of $0.48 so this was a beat of 4 cents. Net sales came in at $1.92 billion versus $1.69 billion in last year's corresponding quarter. Analysts had anticipated that the company would report revenue of $1.89 billion. During the after hours trading session, despite beating on both the top and bottom lines, BBBY has fallen over 5% to $39.35. The reason that the stock is getting hit is because management offered conservative forward looking guidance. The company now expects earnings per share to be between $0.44 and $0.48 for the second quarter. Wall Street analysts' consensus 2Q estimates had been set at $0.63 per share. For investors looking to add short exposure in the retail sector, BBBY could offer an opportunity at current levels. Consider buying a put spread on the shares, or selling the stock short outright. Continued weakness in both the housing market and in the employment outlook could squeeze Bed Bath & Beyond in the near term.