Retail

Bed Bath & Beyond shares head for worst one-day loss ever on weak outlook

Key Points
  • Bed Bath & Beyond issued 2018 earnings per share guidance in the low- to mid-$2 range.
  • Wall Street expected the retailer to earn $2.76 a share in fiscal 2018.
  • The retailer beat analysts' fourth-quarter expectations on the top and bottom line.
  • Shares of the retailer plummeted Thursday morning.
Shoppers exit a Bed Bath & Beyond store in New York.
Michael Nagle | Bloomberg | Getty Images

Shares of Bed Bath & Beyond fell more than 18 percent in trading Thursday after the retailer issued a weaker 2018 forecast.

The decline puts the retailer's shares on pace for its worst day in history, dating back to its IPO in June 1992. The stock is down more than 55 percent over the past year.

In its earnings announcement for the fiscal fourth quarter of 2017, the retailer said earnings per share in fiscal 2018 would be in the low- to mid-$2 range, compared with expected guidance of $2.76 a share, according to a Thomson Reuters survey.

In better news, it beat analysts' expectations on both the top and bottom line for the quarter. It reported revenue of $3.72 billion, compared with expectations of $3.68 billion, while adjusted earnings per share were $1.48, outpacing estimates of $1.39.

The home retailer, like many of its competitors, has struggled to protect its margins amid costly investments in e-commerce. Meantime, growing online businesses must be accompanied by a right-sized and well-managed store base in order to maintain profits, and Bed Bath & Beyond has struggled with that, too.

"Too many of Bed Bath & Beyond's stores — especially older ones — are a mess. They are a hodge-podge of product, tightly crammed into a space that is largely devoid of inspiration. This makes them hard and sometimes unpleasant to shop," said Neil Saunders, managing director of GlobalData Retail, in an email.

"At peak times, lines can be long, and it can be hard to find associates to assist on the shop-floor," he added.

— CNBC's Chris Hayes contributed to this report.