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Bed Bath & Beyond misses on 2Q earnings, slashed forecast tied to China tariffs

The specialty retailer lowered its full-year net sales model

Bed Bath & Beyond Store
Its chain of home goods stores include namesake Bed Bath and Beyond and Harmon Face Values

Bed Bath & Beyond Inc (NASDAQ:BBBY) missed analyst estimates in its fiscal second-quarter results and lowered its full-year net sales model, sending its share falling double digits.

The specialty retailer reported earnings of $0.36 per share on revenue of $2.94 billion compared with $0.67 EPS on revenue of $2.94 billion in the previous year’s second quarter.

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The New Jersey-based company fell below Wall Street estimates of $0.50 EPS on revenue of $2.96 billion.

Shares plunged more than 16% in Wednesday after-hours trading and continued falling in Thursday morning trading, down more than 22% to $14.57.

For the year ahead, the retailer lowered its net sales model with comparable sales expected to be relatively flat to last year. Net earnings per diluted share for the full year are expected to be at the low end of its prior range at $2.

The retailer forecast current quarter sales to fall in the mid-single digit range while fourth quarter sales are expected to fall in the high single-digit range, citing the impact of tariffs on imports from China.

"Regarding tariff, everything we know today about the impact on our business we've built into the back half. For us, our direct imports from China represent a relatively small number of business," said CFO Robyn D'Elia during the earnings call.

"We’re considering all of our options in terms of mitigation strategies,” added D’Elia.

The company ended the quarter with $1.1 billion in cash, nearly double the $563 million reported in the previous second quarter.

The board of directors today declared a quarterly dividend of $0.16 per share payable on January 15, 2019 to shareholders of record at the close of business on December 14, 2018.

The retailer operates a chain of home goods stores in the US and Canada, including namesake Bed Bath and Beyond, buybuy BABY, Christmas Tree Shops and Harmon Face Values.

--Updated to include information from earnings call, latest share price

Quick facts: Bed Bath & Beyond Inc.

Price: 4.65 USD

Market: NASDAQ
Market Cap: $590.37 m

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