Retail

Bed Bath & Beyond falls 15% after earnings miss

Key Points
  • Shares of Bed Bath & Beyond fell 15 percent on Wednesday after second-quarter earnings fell short of estimates.
  • Sales were flat at $2.94 billion, less than expected $2.96 billion.
  • Same-store sales were down 0.6 percent, rather than growing 0.3 percent, as expected.
Bed Bath and Beyond posts drop in same-store sales
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Bed Bath and Beyond posts drop in same-store sales

Shares of Bed Bath & Beyond fell 15 percent on Wednesday after second-quarter earnings fell short of estimates.

The home goods retailer said second-quarter earnings fell to $48.6 million, or 36 cents a share, from $94.2 million, or 67 cents a share, a year ago. Analysts surveyed by Thomson Reuters had expected Bath Bath & Beyond to earn 50 cents a share.

Sales were flat at $2.94 billion, less than expected $2.96 billion.

For the sixth straight quarter, same-store sales declined, dropping 0.6 percent, rather than growing 0.3 percent, as expected.

"These poor numbers...need to be set against the context of a robust consumer economy where spending on homewares and home-related products has been strong. Framed in this way, the numbers are little short of terrible and underscore the myriad of missteps Bed Bath & Beyond is making," said Neil Saunders, Managing Director of GlobalData Retail.

Bed Bath & Beyond shares fell below its 52-week low in after-hours trading. Over the past year, the stock is down 18 percent.

The home goods retailer said that it remains on track to achieve "moderating declines" in operating profit and net earnings per share in fiscal 2018 and 2019 and earnings per share growth by 2020.

Bed Bath & Beyond, like many of its competitors, has struggled to protect its margins amid costly investments in e-commerce. Meantime, growth at its online businesses is being offset by declines at its physical stores.