Bed Bath & Beyond Falls After Preliminary Results Miss Estimatesby
Share-price target cut on concern chain is losing market share
Performance reflects `recent trends,' CEO Temares says
Bed Bath & Beyond Inc., the seller of home goods and bathroom supplies, fell the most in almost a year after it said third-quarter profit and comparable sales will be less than forecast.
The retailer said Tuesday in a statement that preliminary third-quarter profit fell short of its earlier projections and those of analysts. Bed Bath & Beyond cited fewer store transactions than anticipated in the quarter ended Nov. 28, which includes the critical Thanksgiving holiday and the two days after. It forecast earnings per share of $1.07 to $1.10, down from an earlier estimate of as much as $1.21 a share. Analysts had estimated $1.20 a share on average.
The results sparked concern that the retailer is losing market share to competitors and consumers preferring to shop online. Seth Basham, an analyst at Wedbush Securities, cut his price target for the shares to $48 from $62. He has a neutral rating on them. Anthony Chukumba, an analyst for BB&T Capital Markets, said he sees “no turn in sight” for the retailer’s results, and maintained his hold rating.
“Our performance in the third quarter reflects the recent trends we have been experiencing,” Chief Executive Officer Steven Temares said in the statement.
Sales last quarter were $3 billion, the company said, less than the $3.02 billion analysts had predicted. That’s an increase from the same time last year of about 0.3 percent, compared to the chain’s earlier estimate of as much as 4 percent. Comparable sales slipped 0.4 percent from the same period a year ago, missing the company’s forecast for growth of 1 percent to 3 percent, even as online sales surged more than 25 percent.
Bed Bath & Beyond fell as much as 6.5 percent to $47.98 in New York, the biggest intraday decline since Jan. 9. The shares had slipped 33 percent this year through Tuesday.
Bed Bath & Beyond will report its final results for the third quarter after the close of trading Jan. 7. In addition to its flagship Bed Bath & Beyond chain, the Union, New Jersey-based company owns Christmas Tree Shops, Buybuy Baby and Cost Plus World Market.