Bed Bath & Beyond stumbled in the second quarter, reporting weaker net sales and earnings as well as a drop in comparable store sales.
Comparable sales slipped 2.6% in the second quarter year over year, reflecting a reduction in store transactions partially offset by an increase in the average transaction amount. Comparable sales from customer-facing digital channels grew in excess of 20%, the company said.
Net sales were $2.94 billion versus $2.99 billion in the period in the prior fiscal year. Operating profit was $168.8 million versus $281 million in the quarter a year earlier.
For the second quarter ended August 26, Bed Bath & Beyond posted net earnings of $94.2 million, or 67 cents per diluted share, versus $167.3 million, or $1.11 per diluted share, in the year-previous period.
The company noted that net earnings for the 2017 second quarter included eight cents per diluted share of unfavorable impact from cash restructuring charges associated with the acceleration of a store management structure realignment as well as negative effects associated with Hurricane Harvey, at two cents per share, and with a new share-based payment accounting standard, at one cent per share.
With one-time charges calculated into its consensus figure, MarketBeat published an analyst average estimate that was 20 cents per diluted share higher than the actual Bed Bath & Beyond result for the quarter.
In a conference call, Steven Temares, Bed Bath & Beyond CEO, said the results were “softer” than anticipated and prompted changes in its outlook for the year, with earnings per diluted share guidance now at $3. For the 2016 fiscal year, Bed Bath & Beyond reported diluted earnings per share of $4.58. Temares said that the company continues to invest in boosting Bed Bath & Beyond’s competitive position with initiatives underway in information technology, portfolio management and customer experience.