Bed Bath & Beyond shares plunge as customers turn to other options

Bed Bath & Beyond shares plummeted more than 21 percent in trading Thursday after the struggling retailer slashed sales guidance and warned that weak brick-and-mortar store sales and tariffs on Chinese-made good would hurt its profits.

The share price plunge brought it to within a fraction of the stock's largest percentage drop on record, according to Dow Jones.

The company said its same-store sales fell 0.6 percent in its most recent fiscal quarter, marking the sixth consecutive quarter in which the key metric declined. Earnings fell to 36 cents per share, well below the 50 cents per share expected by analysts polled by Thomson Reuters.

Bed Bath and Beyond has struggled to maintain sales as more customers shift toward digitally savvy platforms such as Amazon and Walmart. Other competitors in domestic retail, including Target and HomeGoods, have also provided a tough challenge for the brand.

“The blunt truth is that Bed Bath & Beyond simply hasn't been up to the job of converting the momentum [seen] elsewhere in retail into its own commercial success,” said GlobalData Retail analyst Neil Saunders. “One of the key issues with Bed Bath & Beyond is that it fails to offer a distinct point of difference in a market that is now crowded with choice.”

Bed Bath & Beyond CFO Robyn D’Elia said the chain now expects full-year earnings to land at the low end of its forecast model, or about $2 per share. Same-store sales are expected to remain flat compared to last year.

The Trump administration has imposed 10 percent tariffs on $200 billion in Chinese-made goods, adding further pressure for the retailer.

“Regarding tariff, everything we know today about the impact on our business we’ve built into the back half [of the year],” D’Elia said. “For us, our direct imports from China represent a relatively small number of businesses. And we’re just -- we’re continuing to learn things through domestic vendors and we’ll continue to learn about that into the future.”