Is Bed Bath & Beyond Surrendering to the Amazon Effect?

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Bed Bath & Beyond Inc. (NASDAQ: BBBY) saw its shares tumble on Wednesday after the company issued its most recent earnings report. Out of the major companies that reported late on Tuesday, including FedEx and Adobe, Bed Bath & Beyond is doing the worst by far. Some are even calling this the Amazon Effect.

Management noted that this quarter was especially difficult due to the unfavorable impacts of restructuring charges related to the realignment of store management structure and estimated costs associated with hurricanes Harvey and Irma.

Although restructuring and hurricanes can take their toll, growing competition from the likes of Amazon have been absolutely detrimental to the company. In fact, shares have been sliding as a result since early 2015.

The retailer posted $0.75 in earnings per share (EPS) and $2.94 billion in revenue, while consensus estimates from Thomson Reuters had called for $0.95 in EPS and revenue of $3.01 billion. The fiscal second quarter of last year reportedly had EPS of $1.11 and $2.99 billion in revenue.

Comparable sales in the fiscal second quarter decreased by roughly 2.6%. Comparable sales from customer-facing digital channels continued to have strong growth in excess of 20% for the 13th consecutive quarter, while comparable sales from stores declined in the mid-single-digit percentage range during this quarter.

Looking forward, the company expects to see EPS for the fiscal full year at about $3.00 per share. The consensus estimates are $4.01 in EPS and $12.47 billion in revenue for fiscal 2017.

On the books, Bed Bath & Beyond cash and cash equivalents totaled $464.1 million at the end of the quarter, down from with $577.8 million in the same period of last year.

Even excluding Wednesday’s move, the stock had vastly underperformed the broad markets and was down 33.5% year to date. Over the past 52 weeks, the stock was down closer to 38%.

Shares of Bed Bath & Beyond were last seen down nearly 15% at $23.00, with a 52-week range of $22.41 to $48.83 and a consensus analyst price target of $31.79.