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

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

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.  

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 15^th
as it releases its Q4 and full-year earnings report.