Bed Bath & Beyond shows what's right in retail
If you listened to the naysayers, you would have missed out on stellar earnings at the home-goods retailer.
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focus on China and lending. Sell everything if you want to. I am focused on Bed Bath & Beyond (BBBY).
Here's the largest domestic furnishings company in the country, and it reports earnings of $2.11 a share instead of the $1.92 the Street was looking for.
This is the "magnitude" of having sales that are good and bottom-line numbers that are amazing. This is what I was talking about when I said that you will be amazed when you see the numbers from these retailers.
If you visit a Bed Bath & Beyond -- I live down the block from the original -- you will see everything that's supposed to be doing so badly: bedding, kitchen gizmos, rugs, household products needed for new homes, discretionary trade-up wastebaskets and mirrors, handy items that make your house better.
everything that's supposed to be in a depression, if you read the papers. In fact,
I will go a step further. If you never go into a Bed Bath & Beyond store,
your life will be pretty much the same. That's how discretionary it is.
Now, it's true that you would then have to shop at Family Dollar (FDO) for everyday low prices, but, sure enough, that one blew away the numbers yesterday. Or you would have to go to Costco (COST), which, not coincidentally, also blasted the numbers away this morning.
What can I say? This is what happens when you ratchet back expenses, hold down inventory so you don't have to dump it at or near losses, and you make a conscious decision to run your business not for the hedge funds that want top-line growth but for the shareholders (I don't even consider hedge funds shareholders anymore).
again, focus on the Chinese tightening credit, something that we know is
actually good (as it was in Norway and Australia), because it shows that there
is natural demand that no longer needs stimulus and that overheating must be
stopped. Focus on the dollar-yen cross, for all I care, or palladium or all
sorts of other things that 310 million Americans who need to invest could not care
I will focus on the stories that get missed because of that obsession, stories like Bed Bath & Beyond, right in front of you -- in my case literally -- and how they can make you 10% in an evening, money that people (consciously or subconsciously) tried to make you miss.
Shame on them.
Good for you.
Random musings: Family Dollar on its call made it clear that private label is here to stay. Have people already forgotten the big private-label purchase that Treehouse Foods (THS) made at the end of the year? THS is looking a little like Chattem (CHTT), JM Smucker (SJM) and Warner Chilcott (WCRX), other sleepy companies that have done brilliant acquisitions to boost earnings, in CHTT's case so brilliant as to attract a bid! ... Credit Suisse upgrades Bank of America (BAC). It is happening. I remain convinced that with Citigroup (C), we have seen the lows on that equity deal.
At the time of publication, Cramer was long on Bank of America and Costco.
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Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
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