NEW YORK (AP) â¿¿ Bed Bath & Beyond's shares tumbled a day after the home goods seller forecast weaker earnings than Wall Street expected as concern spread about the company's health in view of the wobbling economy.
The chain gave the disappointing outlook even as it announced better-than-expected first-quarter results. It told investors it was being forced to use more coupons to get people to shop, and that was hurting its profitability.
Bed Bath & Beyond Inc. also faces growing competition from discounters and online, where it has made only a limited foray. Canaccord Genuity retail analyst Laura Champine said in April that the retailer's market share had fallen during the fourth quarter for the first time this decade. And she estimated the company was generating less than 2 percent of its sales online.Meanwhile, Bed Bath & Beyond also is coping with expenses from recent acquisitions. In May, it announced it is acquiring competitor Cost Plus Inc. Cost Plus, which is based in , based in Oakland, Calif., sells home furnishings, accessories, food and wine through World Market and Cost Plus World Market stores. Bed Bath & Beyond already runs more than 1,000 stores under its own name and the Christmas Tree Shops, buybuy Baby, Harmon and Home & More banners. This month, Bed Bath & Beyond said it is buying textile seller Linen Holdings LLC. A slowing economy could stymie the company's efforts to generate more traffic and compete against online merchants. Recent reports on hiring and first-time applications for unemployment benefits indicate layoffs are continuing and hiring is not increasing. And the National Association of Realtors said Thursday that sales of previously occupied homes dropped 1.5 percent in May from April. "Bed Bath & Beyond has had a great run. But the question is whether the great growth pace is now running out of gas," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "Where does it go at a time when consumer demand is beginning to soften?"