Bed Bath & Beyond sinks by 20%
Home supplies firm struggles in the face of inflation and Delta variant
Bed Bath & Beyond’s stock price sank on Thursday after it reported far weaker second quarter results than had been expected.
The home supplies retailer reported adjusted earnings per share of four cents, well below the 52 cents EPS forecast by Wall Street analysts.
Instead of the $2.06bn (£1.52) predicted by forecasters, the company’s revenues stood at $1.98bn, a 26% year-on-year decline.
The company attributed its trouble in large part to the runaway inflation which has beset both the United States and Europe throughout 2021 and the Delta variant of Covid-19.
CEO blames Delta and inflation
CEO Mark Tritton stated: “In August, the final and largest month of our second fiscal period, traffic slowed significantly and, therefore, sales did not materialise as we had anticipated. As Covid-19 fears re-emerged amid the on-going Delta variant, we experienced a challenging environment."
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He added: “Furthermore, unprecedented supply chain challenges have been impacting the industry pervasively, and we saw steeper cost inflation escalating by month, especially later in the quarter, beyond the significant increases that we had already anticipated. This outpaced our plans to offset these headwinds."
For the full-year, Bed Bath & Beyond forecast full year sales of $8.1bn to $8.3bn and adjusted EPS between $0.70 and $1.10 below the $1.51 predicted by Wall Street.
By mid-afternoon (EDT), the company traded down by 20.5% at $17.64, 67% below its 2021 high.
Further reading: FTSE dips despite UK’s 5.5% GDP jump