Bed Bath & Beyond was unable to overcome supply issues during the final quarter of the year that have tripped up the home goods chain for months and it warned Wednesday that those problems are carrying over into the new year.
It also reported a surprise loss in a quarter when many other retailers booked surging profits.
The retailer has been unable to secure popular merchandise and it's dragging down sales. For the three months ended Feb. 26, sales fell 22% to $2.05 billion.
Shortages led to an estimated negative impact of about $175 million in sales during the quarter, CEO Mark Tritton said.
Comparable store sales, which includes online sales, slumped 12%.
“The lack of available inventory to sell proved to be a continuing impediment to sales through the remainder of the fourth quarter and into the early part of fiscal 2022," Tritton said in prepared statement. “Specifically, despite our overall inventory levels, product in transit, not available for sale or held at port remained abnormally high, particularly in key items.”
Some industry analysts were skeptical. Global supply disruptions have been well documented as nations emerge from the worst economic shocks of the pandemic. But Neil Saunders, managing director of GlobalData, said supply issues at Bed Bath & Beyond, “have been occurring for a long time and are deep seated.”
“Perhaps the most worrying thing is that if Bed Bath & Beyond is delivering such rotten numbers during a period of extremely elevated demand when consumer confidence was riding high, how will it fare now that the retail economy is turning sour?” Saunders asked. “In a more constrained economic environment, we are concerned that the company’s fortunes may well deteriorate further.”
Economists have grown concerned over the resiliency of consumer demand as inflation soars. On Tuesday, the U.S. reported that inflation in the past year rose at its fastest pace in more than four decades.
Shares of Bed Bath & Beyond, down 40% over the past year, slipped another 2% Wednesday.
Tritton said the Union, New Jersey, company is investing in supply chain and technological infrastructure to rectify its supply issues.
During the fourth quarter, Bed Bath & Beyond lost $159 million, or $1.79 per share. Stripping out nonrecurring benefits, it lost 92 cents per share. That caught industry analysts, who had been expecting a 2 cent per-share profit according to a poll by Zacks Investment Research, by surprise.
During the same quarter last year, the company earned $9 million, or 8 cents per share.
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