Bed Bath & Beyond Inc. (NASDAQ:BBBY) saw its share price decline almost 16% on Wednesday as the company missed earning expectations and as a result the stock went plummeting. At under $23 per share the stock has not traded this low since March of 2009.
The company did have a disappointing result with revenues dropping with revenues dropping more than 1% year-over-year and operating profit dropping 40%. Bed Bath & Beyond blames some of the increased costs on restructuring-related expenses that are a result of the company realigning its store management. The company’s profit margin was just 3.2% this quarter and actually improved from the 2.7% it saw in the previous quarter.
Bed Bath & Beyond had a bad quarter, but the company saw a slight sales decline and profit margins that were better than the last reporting period. The decline in share price would have you believe that the company is next to go bankrupt and that it is struggling to survive, which clearly isn’t the case.
I suspect that the news of Toys ‘R’ Us filing for chapter 11 only strengthened the decline in Bed Bath & Beyond’s share price, as investors likely panicked that another retailer was in trouble. Although the stock would have still declined, it likely would not have been to these depths.
However, this creates an excellent opportunity to buy the stock at such a low price, and I would expect it to rebound before the week is done as investors have second thoughts.
