What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) have lost nearly a third of their value since the beginning of the year, according to data provided by S&P Global Market Intelligence. The home goods giant, once thought to be largely immune to the online competition, has proved otherwise in recent quarters.

So what

Bed Bath & Beyond began 2017 with some serious downward momentum, after reporting a 29% drop in profits at the end of December. Things would only get worse from there.

The retailer would go on to report falling profits again in April, followed by a 39% plunge in June.

Man with his head down in front of a plunging stock chart.

Image source: Getty Images.

Now what 

Bed Bath & Beyond, like many traditional retailers, is struggling with declining in-store traffic. Its e-commerce operations show promise, with sales growth of more than 20% in recent quarters. But it's a case of too little too late, as digital sales still comprise only a small portion of Bed Bath & Beyond's total revenue.

Worse still, with online juggernaut Amazon.com offering an ever-growing selection of home goods, it's going to be increasingly difficult for Bed Bath & Beyond to compete successfully in the e-commerce arena going forward. With more and more retail purchases shifting online every year, that's a grim position for Bed Bath & Beyond to be in.

There is hope that a private equity buyer could make a bid for Bed Bath & Beyond. Staples -- another struggling retailer -- recently received such an offer. But speculating on the buyout of a business with declining fundamentals is like playing with fire, and it often ends badly for investors. As such, Foolish investors may be best served by simply steering clear of Bed Bath & Beyond's stock.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.