What happened

Shares of Bed Bath & Beyond (NASDAQ:BBBY) are falling today after the retailer reported first-quarter results. While Bed Bath & Beyond matched analyst estimates for revenue, a decline in comparable sales was enough bad news to send the stock down as much as 10% Thursday morning. By 12:40 p.m. EDT, the stock was down just 2%.

So what

Bed Bath & Beyond reported first-quarter revenue of $2.75 billion, up 0.4% year over year and in line with the average analyst estimate. Comparable sales dropped 0.6%, with strong sales from digital channels being more than offset by a mid-single-digit decline in sales from stores.

A declining chart laid over columns of numbers

Image source: Getty Images.

Earnings per share came in at $0.32, down from $0.53 in the prior-year period. This number was reduced by $0.06 by severance costs, which were not included in the company's modeling assumptions. There was also a favorable $0.05 impact from the adoption of the ASC 606 accounting standard, which was anticipated by the company. Analysts were expecting earnings of $0.32 per share.

Despite the slump in comparable sales, Bed Bath & Beyond maintained its full-year guidance for earnings per share in the low-to-mid $2.00 range. The company also said that it remains on track with its three-year financial goals, which include comparable sales growth starting this year and a return to earnings growth by fiscal 2020.

Now what

Poor performance from Bed Bath & Beyond's stores knocked down the company's results during the first quarter. Gross margin was 35%, down from 36.5% in the prior-year period, while operating costs jumped 3.6% year over year. Weak store sales and a shift toward online sales are no doubt hurting the company's margins.

While Bed Bath & Beyond stock had recovered most of its losses by midday, the retailer's results were nothing to get excited about. In the age of e-commerce, the company is clearly still struggling to find its footing.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.