Bed, Bath & Beyond shares dip despite beating street
When do good financial results turn bad?
Just ask officials at Bed, Bath & Beyond. The beleaguered home furnishings retailer, which also owns Harmon, posted earnings that beat estimates on Thursday. The result? A $3 drop in its stock price to around $21 a share. The company’s shares were in the low $80 range as recently as two years ago.
Edison, N.J.-based Bed, Bath & Beyond posted earnings of 44 cents per share, beating consensus estimates by about 8 cents. Revenues for the quarter were $3 billion, slightly ahead of sales in the same quarter in 2016. Comparable store sales increased by ahead by about 0.3%.
Industry observers say that the company has been particularly hard hit by Amazon.com and has implemented a number of costly promotional programs to regain market share and sales. While sales rose slightly in the quarter, many believe it is at the expense of profits, thus dropping the value of the company and its stock price.
“They are doing the right things,” said one industry observer. “The problem is that it costs a lot of money to compete with Amazon and the other digital retailers. That impacts the bottom line and that is what we are seeing here. Expect more of this before things flatten out.”