Bed Bath & Beyond Posts Sales Decline Amid Supply-Chain Disruptions

“The customer experience was compromised as strong demand wasn’t met with strong product availability,” Chief Executive Mark Tritton told analysts on Thursday. He said the supply-chain issues dented sales by about $100 million in the quarter, and the impact was even greater in December.

In addition to challenges in getting products, a shortage of paper supply and labor constraints curtailed the company’s distribution of circulars, which are a big driver of traffic and sales, Mr. Tritton said.

Mr. Tritton has been trying to turn around the home-goods chain by adding more private-label brands, decluttering stores and making prices more competitive with peers. He has also struck a partnership with Kroger Co. , which will sell some Bed Bath & Beyond products starting next year, and Bed Bath & Beyond has been buying back stock.

But Mr. Tritton has said that it has been difficult to make many of these changes during the pandemic, which has temporarily shut some stores, upended supply chains and created a labor shortage.

The company posted a loss of $276.4 million, compared with a loss of $75 million a year earlier.

It also lowered its full-year financial forecast. The company said it now expects to post sales of $7.9 billion in the full fiscal year, and that its earnings could vary between break even and a 15-cents-a-share loss. In September, Bed Bath & Beyond had said it thought yearly sales would be between $8.1 billion and $8.3 billion, with an adjusted profit of up to 5 cents a share.

The results missed Bed Bath & Beyond’s guidance and Wall Street’s expectations. But the stock rose more than 9% in morning trading on Thursday.

Its shares have been subject to wild swings, including a short-lived run-up in November reminiscent of the meme-stock mania that previously pushed up shares of GameStop Corp. and AMC Entertainment Holdings Inc. Through Wednesday’s close, Bed Bath & Beyond shares are down 36% during the past 12 months.

There were some bright spots in the recently completed period. Sales were up in the high single-digit percent over the Black Friday to Cyber Monday weekend, the company said. And shoppers returned to physical stores during that period, with sales at U.S. stores up around 5%.

But December turned volatile, with sales growing in some weeks and declining in others, as consumers shopped earlier in the season and the retailer wasn’t able to keep some sought-after items in stock, the company said. As a result, sales for the current period through Dec. 31 are down in the high single-digit percent.

All of the same-store sales decline in the recent period came from the Bed Bath & Beyond chain. Buybuy Baby posted strong sales gains compared with a year earlier.

In September, Bed Bath & Beyond tempered investors’ expectations for its rest-of-year performance when it posted a sizable year-over-year sales decline in the summer quarter and lowered its full-year guidance. Supply-chain challenges and less foot traffic in stores had created difficult conditions that the company said were continuing into the third quarter.

Write to Suzanne Kapner at [email protected] and Matt Grossman at [email protected]