Mattress Bathtub & Past shares tanked greater than 28% on Thursday morning as the corporate mentioned it noticed a steep drop-off in shopper site visitors in August, dealing a blow to its fiscal second-quarter outcomes.
The large-box retailer can also be coping with industrywide provide chain problems, which Chief Govt Mark Tritton mentioned have been “pervasive.” He mentioned the corporate’s prices escalated over the summer season months, particularly towards the top of its second quarter in August, consuming into gross sales and income.
Mattress Bathtub & Past slashed its income and earnings outlook for the yr, and its third-quarter steering appears underwhelming.
The sell-off of the retailer’s inventory was sturdy. Earlier than the market even opened Thursday, extra shares had already modified arms than what’s typical in a mean day of buying and selling for Mattress Bathtub & Past.
Here is how Mattress Bathtub & Past did in its second quarter ended Aug. 28 in contrast with what Wall Road was anticipating, based mostly on a Refinitiv survey of analysts:
- Earnings per share: 4 cents adjusted vs. 52 cents anticipated
- Income: $1.99 billion vs. $2.06 billion anticipated
Within the newest interval, Mattress Bathtub & Past misplaced $73.2 million, or 72 cents per share, in contrast with web earnings of $217.9 million, or $1.75 per share, a yr earlier. Excluding one-time objects, the corporate earned 4 cents a share, which was lower than the 52 cents analysts anticipated.
Income fell 26% to $1.99 billion from $2.69 billion a yr earlier. That got here in wanting estimates for $2.06 billion.
“Whereas our outcomes this quarter have been under expectations, we stay assured in our multi-year transformation,” Tritton mentioned in a press launch.
A blow from delta-driven Covid spike
Mattress Bathtub & Past has been reworking its shops and launching in-house manufacturers that promote all the pieces from tub towels to cooking utensils to dorm decorations. In its prior quarter, it appeared as if those efforts were paying off and momentum was building in the business.
But over the summer months, that progress stalled. Tritton explained that as Covid-19 fears reemerged amid the spreading delta variant, the environment became more challenging to work through. In states such as Florida, Texas and California, which account for a substantial chunk of sales, the business was hurt due to the rising number of coronavirus cases in the region, Tritton said.
That means not as many shoppers showed up during what is normally a busy back-to-school season for retailers such as Bed Bath & Beyond. It could spell trouble for rivals such as Target, Walmart and Kohl’s, which have yet to report results for the back-to-school period.
In fact, Bank of America just took its rating for Kohl’s stock down two notches, to underperform from buy, citing the potential impact of bottlenecks that could hurt the company’s ability to get inventory on store shelves.
Kohl’s shares were down nearly 8%. Other retail stocks, including department store chains Nordstrom and Macy’s, were trading lower Thursday.
Bed Bath & Beyond expects third-quarter adjusted earnings to be between breakeven and 5 cents per share, with sales ranging from $1.96 billion to $2 billion. Analysts had been looking for earnings of 28 cents per share on sales of $2.02 billion, according to Refinitiv data.
For the year, Bed Bath & Beyond lowered its expectations and is now looking to earn between 70 cents and $1.10 per share, on an adjusted basis, on sales of $8.1 billion to $8.3 billion.
Previously, it was calling for annual adjusted earnings of between $1.40 and $1.55 per share, on sales of $8.2 billion to $8.4 billion.
Analysts were forecasting adjusted earnings per share of $1.51 on revenue of $8.31 billion in fiscal 2021.
Find the full press release from Bed Bath & Beyond here.