Why Bed Bath & Beyond Sales Are Down

December 23, 2015, 1:29 PM UTC
A Bed Bath & Beyond Inc. Store Ahead Of Earnings Figures
Shopping carts are lined up in front of a Bed Bath & Beyond Inc. store in Springfield, Virginia, U.S., on Monday, Sept. 21, 2015. Bed Bath & Beyond Inc. is scheduled to release earnings figures on Sept. 24. Photographer: Andrew Harrer/Bloomberg via Getty Images
Photograph by Bloomberg via Getty Images

Home furnishings retailer Bath & Beyond 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% 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%.

The company, like Macy’s (M) and Nordstrom (JWN) , is facing intense competition from online retailers such as Amazon.com (AMZN) .

“…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.

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