Bed Bath & Beyond Inc. (BBBY)

Bed Bath & Beyond Inc. BBBY released rough second quarter results on Sept. 30, and issued lower than projected forecasts amid supply chain concerns and more.

The basics

Bed Bath & Beyond is a larger retailer that competes alongside companies like Target TGT and others in the household spending space. Despite a solid business environment, BBBY’s sales have declined in recent years and recently reported second-quarter sales plummeted 26%.

Adjusted earnings for Bed Bath & Beyond fell to $ 0.04 from $ 0.50 per share in the year-ago quarter, also missing our Zacks estimate by 92%. The company cited setbacks in the supply chain, rising costs, the delta variant, missteps in marketing and more as reasons for the disappointing quarter. And the situation doesn’t seem to be improving in the short term.

Zack estimates BBBY revenue will be 24% lower in the third quarter and 12% lower in the fourth quarter. Fiscal 2021 total revenue is expected to decrease by almost 11%, and the FY22 is expected to be only marginally (0.25%) above the current difficult year.

Zacks Investment Research

Zacks Investment Research

Image source: Zacks Investment Research

Bottom line

BBBY shares collapsed after the second quarter results and the disappointing forecast and now lost around 45% in the past month alone. The chart opposite shows that the stock is in the midst of a much longer underperformance, having fallen 67% over the past five years.

Bed Bath & Beyond’s consensus earnings estimates for FY21 and FY22 have declined 31% and 25%, respectively, since the report. These downward EPS revisions are helping him hit a Zacks rank # 5 (strong selling) right now. Hence, it may be best to steer clear of BBBY stocks for now.

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