Bed, Bath & Beyond (BBBY) shares slumped lower Wednesday after the struggling home retailer posted a surprise holiday quarter loss as supply chain snarls kept inventory stuck in warehouses and shipping ports and blunted overall sales growth.
Bed Bath & Beyond said it posted an adjusted loss for the three months ending on February 26, the group's fiscal fourth quarter, of 92 cents per share, down from a profit of 40 cents over the same period last year. and well shy of the Street consensus forecast of a 4 cents per share profit. Group revenues, Bed Bath & Beyond said, slumped 21.8% from last year to $2.05 billion, again missing analysts' estimates of a $2.075 billion tally.
Looking into the 2022 fiscal year, however, Bed Bath & Beyond said it sees higher adjusted earnings for the second half, when compared to 2021 levels.
"We are disappointed that our sales and gross margin performance does not reflect our team's hard work and execution against both strategic and transformation efforts in 2021," said CEO Mark Tritton. "Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business."
"The lack of available inventory to sell proved to be a continuing impediment to sales through the remainder of the fourth quarter and into the early part of fiscal 2022," he added. "Specifically, despite our overall inventory levels, product in transit, not available for sale or held at port remained abnormally high, particularly in key items."
Bed Bath & Beyond shares, which fell as much as 12.5% in early trading, were last seen 1.1% lower on the session at $17.70 each, a move that would trim its year-to-date gain to around 8%.
Sales from the group's buybuy Baby division, which GameStop (GME) chairman and Chewy.com (CHWY) found Ryan Cohen is urging the company to sell, notched low-single-digit gains when compared to 2021 levels, with an overall top line of $1.4 billion.
"Our buybuy Baby and Harmon banners demonstrate our ability to achieve stabilization and growth when there is strength in the face of macroeconomic factors given its domestic supply chain, as well as different key product demand such as apparel and gear versus our Bed Bath banner," Tritton said.
RC Ventures LLC, an investment group controlled by Cohen, has pushed Bed, Bath & Beyond to consider several strategic alternatives, including a full company sale, since revealing a near 10% stake in the group last month.
