Bed Bath & Beyond Inc. posted rough second quarter results on September 30 and issued lower-than-projected guidance in the face of supply chain worries and more.

The Basics

Bed Bath & Beyond is a larger retailer that competes in the home-based spending space alongside companies like Target (TGT Quick QuoteTGT - Free Report) and others. Despite solid overall conditions, BBBY’s sales have slipped in the last few years and its recently-reported Q2 revenue tumbled 26%.

Bed Bath & Beyond’s adjusted earnings dropped from $0.50 a share in the year-ago quarter to $0.04, which also missed our Zacks estimate by 92%. The company cited supply chain setbacks, rising costs, the delta variant, marketing missteps, and more as reasons for the disappointing quarter. And the situation doesn’t appear to be getting better in the near-term.

Zacks estimates call for BBBY’s third quarter sales to fall 24% and Q4 to come in 12% lower. Its overall fiscal 2021 revenue is projected to fall by nearly 11% and FY22 is only expected to come in marginally (0.25%) above its current tough year.

Image Source: Zacks Investment Research

Bottom Line

BBBY shares tumbled following its second quarter results and disappointing guidance, with it now down around 45% in the past month alone. The nearby chart shows the stock is in the midst of a much longer underperformance, having fallen 67% in the last five years.

Bed Bath & Beyond’s FY21 and FY22 consensus earnings estimates have plummeted by 31% and 25%, respectively since its report. These downward EPS revisions help it land a Zacks Rank #5 (Strong Sell) at the moment. Therefore, it might be best to stay away from BBBY stock for now.