Bed Bath & Beyond Inc. (NASDAQ: BBBY) has become synonymous with what seemed like endless retail growth gone stale. The company is no stranger to disappointing earnings or guidance. Bed Bath & Beyond now has issued a warning for its fiscal third-quarter ended November 28, 2015. This does not include all the Christmas shopping season, but this period did include the Thanksgiving holiday and the following two shopping days of Black Friday and Saturday. The company also chimed on its anticipated comparable sales from the beginning of the fourth quarter through Christmas.
Net sales for the fiscal third quarter are now projected to be approximately $3.0 billion. While this is up about 0.3% from the same period a year ago, Bed Bath & Beyond previously offered sales guidance to be 1.8% to 4.0% higher.
Thomson Reuters had a more realistic estimate than the company apparently. Its consensus estimate was for sales a gain of 2.7% to $3.02 billion.
Bed Bath & Beyond also projected that its third-quarter comparable sales will have decreased by 0.4%, or that it would be relatively flat on a constant currency basis. The company said that it saw a 0.4% unfavorable impact of foreign currency fluctuations, and including the impact of foreign currency fluctuations it had previously modeled comparable sales to increase between 1.0% and 3.0%.
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Based on the lower projection in third quarter sales, Bed Bath & Beyond is looking for third quarter earnings per share of approximately $1.07 to $1.10. The company’s prior guidance was $1.14 to $1.21 per share and Thomson Reuters had its consensus estimate pegged at $1.17 per share.
Bed Bath & Beyond now sees its comparable sales from the beginning of the fiscal fourth quarter through Christmas to be up roughly 1.0%.
Bed Bath & Beyond did formally comment on its trends. Steven H. Temares, chief executive officer and board member of Bed Bath & Beyond, said:
Our performance in the third quarter reflects the recent trends we have been experiencing. On the one hand we experienced softer in-store transaction counts, and on the other hand sales from our customer-facing digital channels demonstrated strong growth, in excess of 25%. These mixed results were also impacted by the overall softness reported in the macro-retail environment during the quarter. As the retail environment continues to evolve, we remain focused on positioning our Company for long-term success.
Things were already looking soft for the shares. After rising 1.9% to $51.32 on Tuesday, the 52-week trading range was $49.98 to $79.64, and the consensus analyst price target prior to the guidance was $64.39.
Unfortunately, Bed Bath & Beyond shareholders are going to see new 52-week lows. The shares were indicated down 6% at $48.10 early Wednesday.
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