Why Is Bed Bath & Beyond (BBBY) Stock Down Today?

Bed Bath & Beyond (NASDAQ:BBBY) stock is down 3% today after the retailer reported disappointing earnings.

The front view of a Bed Bath & Beyond (BBBY) retail location in Indianapolis, Indiana.
Source: Jonathan Weiss / Shutterstock.com

Bed Bath & Beyond reported a surprising holiday-quarter loss as the company ran low on inventory and struggled with supply constraints and backlogs at U.S. ports.

Prior to today, BBBY stock had been up 19% year to date at just under $18 per share. Bed Bath & Beyond has a current market value of $1.7 billion.

What Happened With BBBY Stock

The retailer that focuses on items for the home reported that its fiscal fourth-quarter net loss grew to $159 million, or $1.79 per share. This is a sharp turn from net income of $9 million or 8 cents per share a year earlier. Excluding one-time items, the company said that it lost 92 cents a share. Analysts surveyed by Refinitiv had expected earnings per share of 3 cents.

Bed Bath & Beyond’s revenue fell 22% in the quarter to $2.05 billion from $2.62 billion a year earlier. That fell short of analyst expectations for sales of $2.07 billion. The company said its same-store sales dropped 12% compared to a year ago.

In a news release, Bed, Bath & Beyond said that out-of-stock merchandise caused the company to miss out on $175 million in sales during the quarter. The company declined to provide forward guidance.

Why It Matters

The latest earnings miss comes at a sensitive time for Bed Bath & Beyond. The company is struggling to transform itself and move more of its sales online and away from its brick-and-mortar retail network. The company has been investing heavily in technology, welcoming back customers with targeted emails, and expanding its more profitable private label business.

At the same time, BBBY stock has been drawn into meme stock rallies along with other retailers such as GameStop (NYSE:GME). And the company has been targeted by activist investor Ryan Cohen, the chairman of GameStop, who has been critical of the progress made to date and called for accelerated changes at Bed Bath and Beyond.

The retailer recently struck a deal with Cohen, agreeing to add new board members and explore whether it should spin off or sell its BuyBuy Baby brand, which has been one of the company’s top-performing units. The latest financial results are not likely to inspire confidence in Cohen and other BBBY shareholders.

What’s Next for Bed Bath & Beyond

BBBY stock takes a pounding today following its weak financial results and lack of forward guidance. If anything, the latest numbers are likely to increase the drama surrounding Bed Bath & Beyond, its stock, and its ongoing efforts to transform itself into more of an e-commerce company. How investors such as Ryan Cohen react to the latest financial results could impact Bed Bath & Beyond’s stock in coming days and weeks.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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