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Shopping patterns are changing from browsing through Google (NASDAQ: GOOGL) to directly searching and comparing prices on Amazon (NASDAQ: AMZN). Apart from Amazon, the coronavirus break in China and slower economic growth continue to impact Bed Bath & Beyond’s growth.
The company’s third-quarter performance remained unsatisfactory and this led to the withdrawal of full-year guidance. The company slipped to a loss from a profit last year due to higher costs and expenses as well as a 9% drop in revenues. Comparable sales decreased 8.3% due to the negative impact from the calendar shift of the Thanksgiving holiday this year, which resulted in one less week of sales compared to last year.
Bed Bath & Beyond continues to believe in its comprehensive plan for business transformation and long-term success. The company has undertaken significant changes to adapt to the dynamic retail environment and the evolving needs of its customers to improve its competitive position and has been executing on a comprehensive plan to transform its business and position it for long-term success.
The profitability will be hurt by increased advertising or more aggressive promotions, as well as the cost of fulfilment and the pricing transparency inherent in e-commerce. However, the company believes that the real estate sales leaseback transaction marks the first step towards unlocking valuable capital in its business. The efforts to stabilize the business is likely to yield the desired results in the future.