Bed Bath warns of weak 4th qtr, stock slumps
NEW YORK (Reuters) - U.S. home goods retailer Bed Bath & Beyond Inc (BBBY.O) on Thursday posted a lower quarterly profit and warned that its fourth-quarter results would be lower than expected, sending its shares down almost 10 percent.
Bed Bath & Beyond, which operates the Bed Bath & Beyond, Christmas Tree Shops, Harmon Stores, and buybuy BABY chains, said it expects its fourth-quarter earnings to range between 64 and 67 cents a share, well below analysts' average forecast of 77 cents, according to Reuters Estimates.
The fourth-quarter warning is especially worrisome for the retailer as it includes almost all its holiday spending days.
"Given the softer sales environment and the likely margin pressures, we are trimming our earnings expectations for both the near-term and into next year," Sanford Bernstein analyst Colin McGranahan said in a research note.
"We expect sluggish demand and heightened promotional intensity to continue, which will likely make the next several quarters challenging as well," wrote McGranahan, who has a "market perform" rating on the stock.
Bed Bath's shares fell 3.4 percent during Thursday's regular session on the Nasdaq to $27.40, a new 52-week low. In February, the shares traded as high as $43.32.
Bed Bath's third-quarter profit fell to $138.2 million from $142.4 million. Earnings per share rose to 52 cents from 50 cents a year earlier due to fewer shares.
Its sales rose to about $1.8 billion, the Union, New Jersey-based retailer said in a statement.
Analysts, on average, were expecting the company to earn 51 cents a share for the quarter on about $1.76 billion in sales, according to Reuters Estimates.
Comparable store sales, a key retail measures of sales at stores open at least a year, rose about 0.8 percent.
Bed Bath & Beyond has been operating in a challenging sales environment as consumer appetite for home goods has waned in the midst of a weak U.S. housing market and rising food and fuel costs.
(Reporting by Justin Grant)
