Bed Bath & Beyond Inc. (BBBY - Get Report) shares moved between gains and losses Thursday after the home-furnishings retailer posted weaker-than-forecast same-store sales and trimmed its full-year profit guidance, amid its ongoing turnaround program.
Bed Bath & Beyond said adjusted earnings for the three months ending in August came in at 34 cents a share, down 10.5% from the year earlier but 5 cents ahead of the Wall Street consensus forecast. Net sales, the company said, fell 7.3% to $2.7 billion, just shy of analysts' estimates of a $2.76 billion tally. Same-store sales, however, fell 6.7%, notably lower than the 5.4% decline analysts had forecast.
Looking into the final months of 2019, Bed Bath & Beyond said it sees full-year earnings of between $2.08 and $2.13 a share, down from a prior forecast of $2.11 to $2.20, and said it had made "substantial progress" in its search for a new CEO.
"We feel good about the progress we are making against our four key near-term priorities, including stabilizing sales and driving top line growth, resetting the cost structure, reviewing and optimizing the company's asset base, including the portfolio of retail banners, and refining our organization structure," interim CEO Mary Winston told investors on a conference call late Wednesday.
"This work is being done with the support and guidance of the business transformation and strategy review committee of the board and a highly engaged leadership team. I'm even more confident in the tremendous opportunity in front of us."
"Bed Bath & Beyond's results did not give us much reason to believe a significant turnaround in the company's fundamentals has begun or is imminent," said Loop Capital's Anthony Chukumba, who lowered his price target on the stocks by $2 to $10 per share but maintained a hold rating.
"In particular, we were concerned by the large comparable sales decline, especially in light of strong top-line performance by most of our other covered home furnishings retailers and a steadily improving US housing market."
"All that said, we continue to believe Bed Bath & Beyond has value in some of its non-core concepts (e.g., buybuy BABY, Cost Plus) and real estate that is not currently reflected in the company's stock price and which management appears likely to "unlock" in the near future," he added.