Bed Bath & Beyond Inc. (NASDAQ: BBBY) stock plunged over 25% on Wednesday after the sales update painted a gloomy picture for the future. The home furnishing retailer has been seeing a rapid decline in customer traffic at its stores of late. This remained the key reason behind the 5.4% fall in comparable sales for the first two months of fourth-quarter 2019.
Investors, meanwhile, believe that a recovery from short-term challenges will occur only in the last quarter of 2020. Even though investors expect higher traffic in the summer of 2020, the company faces stiff competition from online e-commerce players.
Read: Roku Q4 earnings preview
Shopping patterns are changing from browsing through Google (NASDAQ: GOOGL) to directly searching and comparing prices on Amazon (NASDAQ: AMZN). Apart from Amazon, the coronavirus break in China and slower economic growth continue to impact Bed Bath & Beyond’s growth.
The company’s third-quarter performance remained unsatisfactory and this led to the withdrawal of full-year guidance. The company slipped to a loss from a profit last year due to higher costs and expenses as well as a 9% drop in revenues. Comparable sales decreased 8.3% due to the negative impact from the calendar shift of the Thanksgiving holiday this year, which resulted in one less week of sales compared to last year.
Bed Bath & Beyond continues to believe in its comprehensive plan for business transformation and long-term success. The company has undertaken significant changes to adapt to the dynamic retail environment and the evolving needs of its customers to improve its competitive position and has been executing on a comprehensive plan to transform its business and position it for long-term success.
The profitability will be hurt by increased advertising or more aggressive promotions, as well as the cost of fulfilment and the pricing transparency inherent in e-commerce. However, the company believes that the real estate sales leaseback transaction marks the first step towards unlocking valuable capital in its business. The efforts to stabilize the business is likely to yield the desired results in the future.
Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a
PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the
With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,