Shares of Bed Bath & Beyond fell more than 18 percent in early trading Thursday after the retailer issued a weaker 2018 forecast.
In its earnings announcement for the fiscal fourth quarter of 2017, the retailer said earnings per share in fiscal 2018 would be in the low to mid $2 range, compared to expected guidance of $2.76 a share, according to a Thomson Reuters survey.
In better news, it beat analysts expectations on both the top and bottom line for the quarter. It reported revenue of $3.72 billion, compared with expectations of $3.68 billion, while adjusted earnings per share were $1.48, outpacing estimates of $1.39.
The home retailer, like many of its competitors, has struggled to protect its margins amid costly investments in e-commerce. Meantime, growing online businesses must be accompanied by a rightsized and well-managed store base in order to maintain profits, and Bed Bath & Beyond has struggled with that too.
“Too many of Bed Bath & Beyond’s stores — especially older ones — are a mess. They are a hodge-podge of product, tightly crammed into a space that is largely devoid of inspiration. This makes them hard and sometimes unpleasant to shop,” said Neil Saunders, managing director of GlobalData Retail, in an email.
“At peak times, lines can be long, and it can be hard to find associates to assist on the shop-floor,” he added.