(Reuters) - Home furnishings retailer Bed Bath & Beyond (BBBY.O) reported a surprise drop in quarterly same-store sales on Wednesday, hurt by fewer redemptions of its once-popular coupons amid intense competition from online and off-price rivals.
Shares of the New Jersey-based retailer, which have fallen over 8 percent this year, lost as much as 9 percent in after-market trading.
The ‘Buy Buy Baby’ brand owner has been trying to revive sales and ward off rivals like Amazon (AMZN.O), Wayfair (W.N) and big-box competitors like Home Depot (HD.N) and Walmart (WMT.N) by revamping its website and working on dynamic pricing.
These efforts, however, didn’t yield results and the company reported a 0.6 percent drop in same-store sales. Analysts were expecting a rise of 0.06 percent, according to Thomson Reuters I/B/E/S.
Chief Financial Officer Robyn D’Elia said on a conference call that while average value of its coupons rose, redemptions fell.
Like its rival Pier 1 Imports, Inc (PIR.N), Bed Bath & Beyond has struggled to adjust to a market where shoppers increasingly buy goods online over the past few years.
“It’s a trend that has been in place for Bed Bath for a while now... margin investment needed to keep them from falling more is taking down profitability and earnings,” MoffettNathanson analyst Gregory Melich said.
“They are going have to keep fighting. They will probably look to restructure more.”
D’Elia said comparable sales for the quarter decreased 60 basis points mainly due to a drop in the number of transactions in stores.
Net income fell to $43.58 million, or 32 cents per share, in the first quarter ended June 2, from $75.28 million, or 53 cents per share, a year earlier.
Excluding certain items, the company reported a earnings per share of 33 cents, beating analysts’ average estimate by 2 cents, according to Thomson Reuters I/B/E/S.
Net sales rose marginally to $2.75 billion in the quarter.
Shares of the company were trading down 5.8 percent at $19.
Reporting by Jaslein Mahil and Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur