Bed Bath & Beyond (BBBY) got crushed again on Tuesday, falling by over 5%. I discovered the company's shares through a Joel Greenblatt-style stock screener, where the main focus was on firms with low P/E ratios and high (above 10%) returns on invested capital. Despite my initial enthusiasm of the advertised "headline" numbers, I decided to take a deeper dive into the company's fundamentals, as there could be some company-specific and industry-specific risks lurking below the raw numbers posted on most financial sites.
The business
Bed Bath & Beyond is primarily located in North America and sells an array of items including everything from bedding to furniture to kitchenware. Usually, when any retail name is brought up, Amazon (AMZN) is brought up alongside it. Getting this out of the way, I don't think the company is immune from the disrupting effects of Amazon, but I will say that from personal experience that its namesake store offered an unique experience for my wife and me when we set up our registry there. Could we have done this all on Amazon? Probably, but we didn't want to - some things are just better in-person, such as picking out china and silverware. They made it very easy for everyone to search for our name on their digital registry list and pick out exactly what they wanted to gift us.
