The home improvement chain delivered 53 cents earnings per share compared to Wall Street estimates of 66 cents, and a 2 percent same-store sales decline, a key measure in the retail industry that tracks the success of each store.
"It's a truly existential crisis for this once-high-growth retailer because Bed Bath's got a frightful problem: the more it beefs up its online business, the worse it does," Cramer said.
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On the post-earnings conference call, Bed Bath & Beyond CEO Steven Temares said that while the company is sustaining "very healthy growth" in digital, it is losing out on foot traffic and on-location customers.
Moreover, the retailer is faced with cutthroat competition, namely Amazon and its low-cost e-commerce universe.
Bed Bath & Beyond offers free shipping for every purchase over $29 in an effort to rival the online giant, but Cramer says that results in customers turning to Amazon for purchases under $29 and to Bed Bath & Beyond for purchases over $29.
The problem? Bed Bath & Beyond gets less online business, and when it does get over-$29 purchases, it absorbs the cost of shipping and its margins shrink.
"So it's a catch-22," the "Mad Money" host said. Even Temares, the CEO, acknowledged that on the conference call, insisting that while his company is better than it has been lately, achieving profitability is a growing struggle in an environment under pressure.
"Look, I'm not picking on Temares," Cramer said. "But in this new world, no matter what a merchant does, they can't seem to win against Amazon."
When Bed Bath & Beyond started buying back stock, taking its 204 million shares in 2014 down to just 142 million, Cramer thought the chain may consider going private, like Nordstrom is reportedly doing now.
Instead, the stock slid from $80.82 in 2014 to under $30 now in a show of pure value destruction that management did not foresee and is seemingly having trouble correcting.
"I think the stock has to start reflecting this new world even more than it has. It still reflects too much of the old world, even down here. Unless Bed Bath can develop something new, something experiential, something different that can't be had online, the company's simply facing a dilemma that may be too hard for anyone to solve," Cramer said.
With a $4.2 billion market capitalization and a stock that yields only 2 percent, Cramer said the first is too high and the latter is too low to justify buying the stock at the price it is now.
"My advice: if you like it, shop there; it's a heck of a lot less risky than owning the stock," the "Mad Money" host said.
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