Bed Bath & Beyond narrows profit forecast, shares fall

Tue Dec 22, 2015 8:35pm EST
 
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(Reuters) - Home furnishings retailer Bed Bath & Beyond (BBBY.O: Quote) slashed its third-quarter profit forecast, the latest retailer to do so in a sluggish U.S. retail market.

The company's shares fell 6.3 percent in late evening trading on Tuesday.

Bed Bath & Beyond now expects third quarter earnings of about $1.07 to $1.10 per share, down from its prior expectation of $1.14 to $1.21 per share.

The company also said it expects sales in the quarter to grow by 0.3 percent to about $3.0 billion. It had earlier expected sales to increase by about 1.8 to 4.0 percent.

The company, like Macy's Inc M.N and Nordstrom Inc (JWN.N: Quote), is facing intense competition from online retailers such as Amazon.com Inc (AMZN.O: Quote).

"...We experienced softer in-store transaction counts, and on the other hand sales from our customer-facing digital channels demonstrated strong growth, in excess of 25 percent", Bed Bath & Beyond Chief Executive, Steven Temares said.

Amazon.com has revolutionized shopping habits, conditioning shoppers to expect deeper discounts than brick-and-mortar stores can afford. Analysts call this the "Amazon effect."

Analysts on an average expected the company to earn $1.17 per share on revenue of $3.02 billion, according to Thomson Reuters I/B/E/S.

(Reporting by Abinaya Vijayaraghavan in Bengaluru; Editing by Sandra Maler)

 
A passerby walks in front of a Bed, Bath, and Beyond in New York, June 23, 2010. REUTERS/Keith Bedford