Bed Bath & Beyond Inc. BBBY -24.50% said sales declined 26.2% in the latest quarter because of supply-chain challenges and fewer people coming to its stores in August amid the spread of the Delta variant.
Shares of Bed Bath & Beyond fell nearly 29% in early trading. Through Wednesday’s close, the stock was up 25% so far this year.
Net sales for the fiscal second quarter fell to $1.98 billion from $2.69 billion in the same period last year as traffic slowed in August.
The retailer on Thursday also lowered its sales and adjusted profit expectations for the year as it anticipates greater supply-chain challenges.
Cost inflation also escalated beyond the significant increases the company had already anticipated, especially later in the quarter, President and Chief Executive Mark Tritton said. He said challenges in the company’s operating environment were particularly evident in key states such as Florida, Texas and California, all of which make up a substantial portion of sales.
“Following solid growth in June, we saw unexpected, external disruptive forces towards the end of the quarter that impacted our outcome,” Mr. Tritton said.
Bed Bath & Beyond posted a net loss of $73.2 million for the quarter, compared with a profit of $217.9 million. Adjusted earnings were 4 cents a share, lower than the 52 cents a share analysts polled by FactSet had expected.
The company now expects its fiscal 2021 sales to be between $8.1 billion and $8.3 billion, down from its prior outlook of $8.2 billion to $8.4 billion. It expects adjusted earnings of 70 cents a share to $1.10 a share, compared with its previous expectation of $1.40 a share to $1.55 a share.
Bed Bath & Beyond said it expects comparable sales of flat to up slightly for the second through fourth quarters. It previously expected low single-digit growth for the same period.
For the fiscal third quarter, the company expects net sales of $1.96 billion to $2 billion from its core businesses. It sees adjusted earnings of flat to 5 cents a share for the quarter, as well as comparable-sales growth of about flat compared with the prior-year period.
Businesses are rushing to restock pandemic-depleted inventories. At the same time, supply disruptions have affected everything from sneakers to artificial Christmas trees as the U.S. supply chain has so far failed to adapt to the crush of imports.
Write to Dave Sebastian at [email protected]
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