Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Bed, Bath & Beyond Tanks as Supply Chain, Inflation Force Guidance Cut

Published 30/09/2021, 15:18
Updated 30/09/2021, 15:18
© Reuters

© Reuters

By Dhirendra Tripathi

Investing.com – Bed Bath & Beyond stock (NASDAQ:BBBY) plunged nearly 25% in Thursday’s trading as supply chain issues dented its second-quarter sales and forced the retailer to cut its annual guidance.

Prices of raw materials rose, and coupled with higher freight costs, ate into the company’s profits. The retailer just about managed to report an adjusted profit.

According to Bed Bath & Beyond’s President and CEO Mark Tritton, cost inflation escalated by month, “especially later in the quarter, beyond the significant increases that we had already anticipated”.

While both sales and profit at the retailer came in below estimates, the challenging environment wasn’t unique to just Bed Bath & Beyond as the pandemic ravaged through key supply centers like Vietnam and China.

From Nike (NYSE:NKE) to H & M (ST:HMb) to Boohoo (OTC:BHOOY), manufacturers and retailers have reported their sales being held back due to supply chain issues and restricted raw material availability.

Vietnam was forced to order the closure of factories in and around Ho Chi Minh City to curb the spread of the virus. China, too, brought back restrictions in various cities to control the spread.

Second-quarter net sales fell 26% to $1.98 billion as divestitures and closure of stores hurt. Comparable sales fell 1%. Adjusted profit was $4 million compared to $62 million in the second quarter of last year.

Consequently, the company now sees its annual revenue at $8.25 billion at center of the range compared to the $8.3 billion estimate at midpoint it had given on June 30 at the time of its first-quarter results.

Third-quarter net sales are seen at $1.98 billion at midpoint.

The company closed August with 999 stores, including 813 Bed Bath & Beyond outlets, compared to 1,004 and 818 units, respectively, at the end of May.

 

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.