Bed Bath & Beyond records worst daily performance in the stock market following largely downbeat figures for sales

Written by: Michael Harris
March 11, 2020
  • Bed Bath & Beyond records worst daily performance in the stock market following largely downbeat figures for sales.
  • Bed Bath & Beyond lost 25% in the stock market on Wednesday.
  • Falling traffic, heightened promotions, and inventory issues blamed for the drop in sales.
  • Bed Bath & Beyond to release Q4 and full-year earnings report on April 15th.

In its report on Tuesday, Bed Bath & Beyond announced worse than expected sales figures that saw a decline in share prices. Following the announcement, Wall Street now expects the company’s turnaround to take longer than previously thought.

The downbeat results cast a strong impact on the American chain of retail stores. Bed Bath & Beyond had gained around 53% in the stock market last year. On Wednesday, the stock lost over 25% that marked its record worst day in the stock market. Following the massive decline, it now has a market capitalization of around $1.4 billion.

Falling Traffic, Heightened Promotions, And Inventory Issues Blamed For The Drop In Sales

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

The company said falling traffic in its stores, heightened promotions, and issues regarding inventory management were primarily responsible for poor sales in 2019’s fourth quarter. Inventory issues in Q4 included various categories either running low on stock or being out of it in the first place. Bed Bath & Beyond is also the owner of BuyBuy Baby, and Christmas Tree Shops.

The retail store also revealed its same-store sales to have dropped 5.4% in December and January. According to Refinitiv, analysts had estimated a 3.97% decline in its same-store sales in the recent quarter.

Digital sales, as per the company, were up by 20% in Q4 while the brick and mortar stores recorded an 11% decline in same-store sales. With greater online sales, however, Bed Bath & Beyond faced additional costs attributed to shipping and returns. On the gross margins front, the retail store registered a decline of 300 basis points ascribed to increased discounts that weighed heavily on profits.  

Tip: looking for an app to invest wisely? Trade safely by signing-up with our preferred choice, eToro: visit & create account

Tritton As The New CEO Wasn’t Well Received By The Investors

The report on Tuesday painted a softer picture for Bed Bath & Beyond for the upcoming quarters. The retail store had also greatly lost investors’ confidence when it hired Tritton as the new CEO. Tritton has previously served as a chief merchandising officer at Target.

After Tuesday’s revelation, Telsey Advisory Group lowered its target price on Bed Bath & Beyond’s stock to $15 from the previously accentuated $18. With share prices reported below $11 on Wednesday, four other brokerages have lowered their price target on its stock to around $10.

Further insight into the company’s performance will be revealed on April 15th as it releases its Q4 and full-year earnings report.