Why Bed Bath & Beyond Stock Is Down By 25% Today

Bed Bath & Beyond Stock Falls After Quarterly Report Misses Analyst Estimates

Shares of Bed Bath & Beyond found themselves under strong pressure after the company released results of its second fiscal quarter. Bed Bath & Beyond reported revenue of $1.99 billion and adjusted earnings of $0.04 per share, missing analyst estimates on both earnings and revenue.

The company stated that traffic slowed significantly in August and sales missed company’s expectations. According to Bed Bath & Beyond, fears about the Delta variant of coronavirus were the main driver behind the slowdown in traffic.

In addition, the company was hit by supply chain problems and cost inflation. In fact, inflation was higher than the “significant increases” already anticipated by the company!

A combination of lower sales and higher costs has put material pressure on the company’s financial results in the second fiscal quarter. In the fiscal 2021 third quarter, Bed Bath & Beyond expects to report revenue of $1.96 billion – $2 billion and adjusted earnings of $0.00 – $0.05 per share.

What’s Next For Bed Bath & Beyond Stock?

Currently, analysts expect that Bed Bath & Beyond will report earnings of $1.51 per share in the current year and $2.14 per share in the next year, so the stock is trading at 8 forward P/E. However, earnings estimates have began to move lower in recent weeks and will move further down after the earnings report.

It should be noted that Bed Bath & Beyond stock has previously enjoyed support from the “meme crowd” of retail traders who were buying stocks which were popular on social media.

In Bed Bath & Beyond’s case, fundamentals have already began to put pressure on the stock, which is a warning for investors in other “meme stocks” like GameStop or AMC.

It remains to be seen whether speculative traders will rush to buy the company’s shares after the pullback as it looks that problems with global supply chain and higher costs will remain in the upcoming months. The stock will need positive catalysts to gain upside momentum.

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