Bed Bath & Beyond stock tanks after delta variant, supply chain, inflation warning
Bed Bath & Beyond reported a net loss of $73.2M, or 72 cents per share, with net sales of $1.98B
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Bed Bath & Beyond shares fell over 25% Thursday after the big box retailer warned of a significant slowdown in foot traffic in its stores in August attributed by the company to the spread of the delta variant in states like Florida, Texas and California, which represent a substantial portion of the company's sales.
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In addition, chief executive officer Mark Tritton cited unprecedented supply chain challenges and steeper cost inflation than anticipated, especially towards the end of the second quarter.
The company reported a loss of $73.2 million, or 72 cents per share, compared to 217.9 million, or $1.76 per share, a year ago. Excluding one-time items, Bed Beth & Beyond earned 4 cents per share, well below analyst expectations of 52 cents. Meanwhile, net sales came in at $1.98 billion, down 26% from $2.69 billion a year ago. Wall Street was expecting net sales of $2.06 billion.
"While our results this quarter were below expectations, we remain confident in our multi-year transformation," Tritton said in the company's earnings release.
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The company has remodeled 70 stores to date, including its NYC flagship store in Chelsea, and remains on track for up to 150 remodeled Bed Bath & Beyond stores by the end of 2021 and 450 by the end of its three-year transformation. Tritton previously told FOX Business that the company also plans to launch new stores focused on growing the company's Buy Buy Baby brand.
Despite the company's second-quarter challenges, Tritton said the Buy Buy Baby brand continued to build on the positive momentum from previous quarters with double-digit growth thanks to strengthing in apparel and travel gear and increasing market share for the quarter.
Tritton also emphasized that the company's higher margin Owned Brands have outperformed the company's penetration goals across the overall chain, with particular strength in remodeled stores, while digital channels saw significant growth above 2019 levels at nearly double the proportion of sales.
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As of the end of the second quarter, Bed Bath & Beyond has total available liquidity of $2 billion.
"We are well positioned to continue our planned investments in our business and pave the way towards a more profitable future," Tritton added. "We have the plan, the team and the resources to unlock our potential."
Looking ahead, Beyond Bath & Beyond anticipates third quarter net sales in the range of $1.96 billion to $2 billion, with adjusted earnings per share between breakeven and 5 cents.