Bed Bath & Beyond (NASDAQ:BBBY) released its quarterly results on Wednesday for the first quarter of fiscal 2019. The good news was that the company’s EPS of $0.12 came in above the $0.08 that analysts were expecting. It also came in just slightly below their sales targets as well.
And so, from an expectations point of view, it didn’t do too badly at all.
However, the bad news was that the company incurred a significant impairment charge of over $401 million that put the quarter well into the red. Even though it had an income tax benefit of more than $50 million in Q1, there was no way the company was going to finish in the black with such a big writedown.
And with same-store sales down 6.6% from the previous year, it wasn’t a terribly strong performance regardless of expectations. The company’s Interim CEO, Mary A. Winston even said that "there needs to be fundamental change in our approach to executing the company’s business transformation."
One of the areas the company wants to focus on is top-line growth, which may be easier said than done given the challenges retail stocks have faced in recent years.
The company also said that for fiscal 2019, it expects its sales and profit numbers to be at the lower end of the estimates it provided earlier. While still technically within the range, if by Q1 the company is already looking at the lower end, then by Q2 or Q3 it could be out of the range entirely.
It’s not a good sign, and frankly, there really weren’t many positives from the earnings report.
