Bed Bath & Beyond Inc. shares plunged after a slowdown in store traffic and unrelenting supply chain challenges led the home goods retailer to cut its forecast, an ominous sign for the retail industry ahead of the all-important holiday shopping season.
Revenue in the quarter ended Aug. 28 fell 26% from a year earlier to $1.99 billion, short of the $2.06 billion estimate from analysts compiled by Bloomberg. Same-store sales, a closely watched retail metric, dropped 1%, while Wall Street had projected a gain of 1.8%. For the company’s self-titled stores, same-store sales declined 4%.
Bed Bath & Beyond announced that store traffic slowed significantly in August amid renewed COVID-19 concerns — especially in large states such as Texas, Florida and California, which make up about a third of volume for the retailer. “Therefore, sales did not materialize as we had anticipated,” CEO Mark Tritton said in a statement.
Read about how supply chain pressures are threatening holiday ad plans.
The stock fell as much as 29% to its lowest level in a year. The decline erased what had been a 25% gain for the shares this year through Wednesday’s close.