Shares of Bed Bath & Beyond Inc (BBBY.O) fell nearly 30% on Thursday after the retailer slashed its forecasts for the year, blaming supply chain hurdles and rising cases of the fast-spreading Delta variant of coronavirus.
Retailers have been battling port congestions and escalating transportation costs due to global supply chain disruptions in recent months as rising coronavirus cases dampened hopes of a swift economic recovery and a strong holiday season.
“We did take very assertive action to incorporate freight as a pressure point in our business,” Chief Executive Officer Mark Triton said in a post earnings call, referring to the inclusion of increased freight costs in the company’s forecast.
“We did take a number of pricing interventions, (but) I actually think that we weren’t agile enough and we paid the price for that. And that’s something that we’re also correcting for the third and fourth quarter.”
Triton said the company was plagued by “pervasive” supply chain challenges and cost inflation, which soared as the months went by, eating into the retailer’s profit in the quarter.
Bed Bath & Beyond shares hit an almost one-year low on Thursday as fears of the Delta variant hurt traffic in key states, including Florida, Texas and California in August, the largest month of the quarter.
That also led to the company missing sales and profit expectations for the quarter ended Aug. 28.
The New Jersey-based retailer forecast adjusted profit to be between $0.70 and $1.10 per share, lower than its previous range of $1.40 to $1.55 per share.
It also expects full-year net sales to be between $8.1 billion and $8.3 billion, below the prior range of $8.2 billion to $8.4 billion.
Shares of Bed Bath & Beyond were down 25.6% at $16.50 as of 10:51 a.m. ET, erasing all the gains made this year.