What happened

Shares of Bed Bath & Beyond (BBBY) carved out a new 52-week low on Thursday after the retailer reported disappointing second-quarter results. A slump in comparable sales despite a strong consumer environment, a steep drop in earnings, and reduced full-year guidance sent the stock 22.5% lower by 12:15 p.m. EDT.

So what

Bed Bath & Beyond reported second-quarter revenue of $2.935 billion, flat compared to the second quarter of 2017 and about $20 million below the average analyst estimate. Comparable sales declined by 0.6%, with growth in online sales more than offset by a mid-single-digit sales decline in stores.

A declining chart.

Image source: Getty Images.

Earnings per share came in at $0.36, down from $0.67 in the prior-year period and $0.14 below what analysts were expecting. Gross margin dropped 2.7 percentage points year over year to 33.7%, while operating expenses edged up. Operating income tumbled by 53%.

Now what

Bed Bath & Beyond now expects its full-year comparable sales to be roughly flat compared to last year, a slight reduction from its previous outlook. The company also now sees its full-year earnings per share at roughly $2, the low end of its previous range.

Bed Bath & Beyond still expects to slow down the declines in operating profit and earnings per share through fiscal 2019 and to return to earnings-per-share growth by fiscal 2020. But with the stock now trading for around 7 times the company's new full-year earnings guidance, the market just doesn't buy it.