Retail stock under pressure: Bed Bath & Beyond Inc. (NASDAQ: BBBY)

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Bed Bath & Beyond Inc. (NASDAQ: BBBY) stock fell over 2.8% in the pre-market session on July 11th, 2019 (Source: Google finance) after the company swung to a loss in the first quarter 2019 as the home goods retailer was negatively affected by impairment of approximately $401 million, severance, including the departures of key senior executives of approximately $38 million and shareholder activity costs of approximately $8 million. The company has posted a net loss for the first quarter of $371.1 million compared with a profit of $43.6 million a year earlier. The net loss in the quarter included an unfavorable impact of $3.03 a share due to impairment of goodwill and other intangible assets, as well as severance and shareholder activity costs incurred during the period.

Moreover, the retail inventories were reduced by approximately $124 million at cost or approximately 5% compared to the end of the prior year first quarter. BBBY has ended the first quarter with approximately $923 million of cash and investments, which is approximately 9% more than the amount the company had at the end of the prior year period.

BBBY in the first quarter of FY 19 has reported the adjusted earnings per share of 12 cents, beating the analysts’ estimates for the adjusted earnings per share of 8 cents, as per analysts polled by Refinitiv. The company had reported 6.6 percent fall in the adjusted revenue to $2.57 billion in the first quarter of FY 19, slightly missing the analysts’ estimates for revenue of $2.58 billion. Comparable sales fell 6.6%, higher than the FactSet estimate of a drop of 5.5%. On a directional basis, comp sales from the stores declined in the high single-digit percentage range, partially offset by slight growth in comp sales from the customer-facing digital channel.

Moreover, the gross margin for the quarter was approximately 34.5% of net sales as compared to approximately 35% in the first quarter of last year.

BBBY has declared a quarterly dividend of $0.17 per share payable on October 15th, 2019 to shareholders of record at the close of business on September 13th, 2019.

For fiscal 2019, excluding the goodwill and other impairments, severance and shareholder activity costs, the company is now modeling its adjusted earnings per share and net sales will be at the lower end of its previously provided ranges. Adjusted earnings per share was previously forecast to be between $2.11 and $2.20, while net sales were expected to reach $11.4 billion to $11.7 billion for the fiscal year.

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