Bed Bath and Beyond's stock plunged more than 12 percent during extended trading after the company reported same-store sales that fell well below Wall Street's expectations.
The retailer reported a same-store sales decrease of 2.6 percent. Analysts had expected a decrease of 0.7 percent. While comparable sales for the company's digital channels grew more than 20 percent, in-store sales fell by a number in the mid-single-digit percent range.
Bed Bath and Beyond announced sales of about $2.9 billion, a decrease of about 1.7 percent from the same time last year.
The retailer said restructuring costs, Hurricane Harvey and a new accounting standard weighed on its second quarter results.
"How [customers] discover product, their expectations and knowledge around pricing and services offered, and how they share their thoughts about their shopping experiences are all changing rapidly," CEO Steven Temares said Tuesday on a call with analysts and investors.
Temares outlined initiatives Bed Bath and Beyond is pursuing to accomplish that goal. Those mentioned include adopting a new technology model, hiring a new chief information officer and the company's first chief technology officer, and establishing a strategic portfolio management office.
Temares said Bed Bath and Beyond has launched four projects focused on meeting changing customer needs, improving margins, improving the retailer's supply chain and optimizing inventory.
The customer-focused initiative is the furthest along of the four, he said. Realigning the store's management structure, including last month's decision to cut 880 department and assistant store manager positions, falls under that umbrella, he said.
Bed Bath and Beyond expects the initiatives to save $150 million over the next few years, a portion of which may be reinvested in the company.
Online sales represent only 15 percent of Bed Bath and Beyond's sales, Temares said, meaning there is still room for "significant growth."
Bed Bath and Beyond is opening a 525,000-square-foot fulfillment center in Las Vegas this fall, Temares said. It is also expanding its pilot same-day delivery service in Houston, Dallas and Washington, D.C., to include Seattle and two boroughs in New York City.