Bed Bath & Beyond withdrew its fiscal 2019 outlook on Wednesday, saying that it would reveal its strategic plans in early 2020.
The retailer also reported third-quarter earnings and revenue that fell short of Wall Street's expectations. The company's new CEO Mark Tritton called the results "unsatisfactory" in a statement and said that the company has to create a durable business model for long-term profitable growth.
The stock plunged 8% in extended trading on the report.
Here's how the retailer did during its fiscal third quarter compared with what analyst were expecting, based on Refinitiv data:
Although the company withdrew its fiscal 2019 outlook, it said that it expects sales and profitability to remain under pressure in its fiscal fourth quarter.
Bed Bath & Beyond reported a fiscal third-quarter net loss of $38.6 million, or a loss of 31 cents per share, down from net earnings of $24.4 million, or 18 cents per share, a year earlier.
Excluding items, Bed Bath & Beyond lost 38 cents per share, falling short of analysts' estimates from Refinitiv, which called for earnings 2 cents per share.
Net sales dropped 9% to $2.76 billion, falling short of expectations of $2.85 billion. Same-store sales shrank 8.3%, wider than the decline of 5% forecast by analysts.
The company said that its results were "significantly impacted" by Thanksgiving falling later than usual in 2019, resulting in one less week of holiday sales for the retailer. Adjusting for the calendar shift, same-store sales only declined 3.6% during the quarter, and from Thanksgiving to Cyber Monday, same-store sale rose 7.1%. Digital sales grew by 13% in that five-day shopping period. All of Bed Bath & Beyond's stores were open on Thanksgiving Day.
CFO Robyn D'Elia said that the company is delaying 20 Bed Bath & Beyond store closures to sell more of their merchandise during the first half of fiscal 2020. Now, the company only plans to close 40 total stores, including about 20 Bed Bath & Beyond locations, and open about 10 stores in fiscal 2019.
With a new CEO at the helm, there has been plenty of shake-up at Bed Bath & Beyond in recent weeks. Tritton, who left Target to take over the leadership position at the beginning of November, has wasted no time to embark on his own turnaround plans.
On Monday, the company announced it had completed a real estate deal with an affiliate of Oak Street Real Estate Capital, netting it $250 million in proceeds. It sold roughly 2.1 million square feet of commercial real estate, which includes stores, office space and a distribution center, to the firm and will lease it back. Tritton described the transaction as marking "the first step toward unlocking valuable capital" at Bed Bath & Beyond.
He's also cleaning house. In December, Tritton ousted six senior executives — in the midst of the holiday shopping season — including the retailer's chief merchandising officer, marketing officer, digital officer, its general counsel and chief administrative officer.
"I have been active in the recruitment process for these roles already," Tritton told analysts on the conference call.
Bed Bath & Beyond has come under heightened pressure and sales have slumped as businesses such as Amazon, Walmart and Target have appealed more to consumers with speedier shipping and stronger websites, as they sell many of the same items that Bed Bath & Beyond has traditionally offered in its stores. Bed Bath & Beyond, which also owns Buy Buy Baby and Christmas Tree Shops, has roughly 1,500 locations in total.
The company said this week that it continues to work with outside financial advisors to review its real estate and determine the best uses "to optimize its asset base and enhance shareholder value." Tritton said Wednesday that the company is still actively pursuing adjustments to its portfolio, including real estate assets that it still owns.
Bed Bath & Beyond shares, which trade around $16.70, are up about 38% from a year ago. It has a market value of $2.1 billion. The stock was briefly halted ahead of the earnings announcement.