Bed, Bath and gone? The home goods retailer has announced its earnings for the first quarter, and well, it wasn't pretty. Net sales for the first quarter that ended in May declined by $2.83 a share on revenue of $1.46 billion, missing analysts' expectations of $1.39 a share on revenue of $1.5 billion. The company blamed the drop on falling demand for household goods and a challenging macroeconomic environment. The company reported a net loss of $358m in the quarter, worsening from $51m a year earlier. To compound matters further, The retailer's bed, bath and kitchen categories, which account for about half of its revenue, declined in the double digits in the past three months.
Bed Bath & Beyond (BBBY, $4.99) Shares fell 14.2% to $5.60 in premarket trading and was down 20% to $5.25 in Wednesday morning trading, sending the stock down 63.1% year-to-date. All of this unsurprisingly led to the beleaguered company announcing multiple changes to its leadership, including replacing CEO Mark Tritton, who is out after only three years at the helm. Bed Bath and Beyond have tapped Sue Grove, an independent director on the company's board, as its CEO until it finds someone permanent for the position.
Why it matters
Many consumer-dependent companies are running into the same problem, as consumers cut back on spending. Shoppers simply don't have the extra cash and budgets are already being squeezed. People are having to choose between gassing up their cars or filling up their fridges. From a fiscal point of view, it just goes to show the state of play of US retail, with traditional big-box stores such as Walmart (WMT, $121.92) and Target (TGT, $141.90) struggling, it does beg the question what hope is there for others?
