Bed Bath & Beyond Stock Craters as Earnings Crack Under Supply Chain Pressures
Bed Bath & Beyond
‘s turnaround hit a triple roadblock of higher prices, supply chain issues, and the Delta variant. Its stock is tumbling.
Bed Bath & Beyond had been staging a turnaround since CEO Mark Tritton, with the stock up 25% in 2021 heading into Thursday’s earnings release, ahead of the S&P 500’s 16% rise and the Dow Jones Industrial Average’s12% advance. Now that’s been called into question after Bed Bath & Beyond (ticker: BBBY) reported an adjusted profit of four cents a share, missing forecasts for 52 cents a share, on sales of $1.99 billion, below forecasts for $2.06 billion.
Bed Bath & Beyond also said it would earn between zero and five cents in the third quarter, below forecasts for 28 cents, and lowered its full-year guidance to a range of $0.70 to $1.10, from $1.40 to $1.55. The company blamed the Covid-19 Delta variant and supply chain issues for the miss.
While Bed Bath & Beyond stock has dropped 26% to $16.48 Thursday after the release, management tried to remain upbeat. It noted Bed Bath & Beyond’s strong financial position and the progress it has made. “While our results this quarter were below expectations, we remain confident in our multi-year transformation,” Tritton said in the company’s earnings release.
At least someone is. Wells Fargo analyst Zachary Fadem, on the other hand, isn’t soso sure. “[We] believe Q2’s hiccup undeniably casts doubt on BBBY’s ability to deliver on its aggressive multi-year turnaround plans,” he writes.
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