Please ensure Javascript is enabled for purposes of website accessibility

Why Bed Bath & Beyond Stock Fell Today

By Jeremy Bowman - Mar 3, 2020 at 5:07PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the home goods retailer slipped as markets continued to react to the coronavirus outbreak.

What happened

Shares of Bed Bath & Beyond (BBBY 8.08%) were slipping again today as investors continued to bet against the stock in the face of the COVID-19 coronavirus outbreak.

During a volatile day for stocks, the home goods retailer was briefly in positive territory as investors cheered the Federal Reserve's decision to cut interest rates this morning. But stocks plummeted in afternoon trading as reports of the virus spreading throughout the U.S. continued to emerge, and investors braced for further economic impact in spite of the rate cut.

Bed Bath & Beyond, which is seen as one of the weaker retailers on the market, fell as much as 6.8%, and finished the day down 4.1%. By comparison, the S&P 500 closed the session off 2.8%.

A woman shopping for pillows and towels

Image source: Getty Images.

So what

The decline came in spite of some solid earnings reports from Kohl's and Target, both of which seemed sanguine about the coronavirus.

Nonetheless, Bed Bath & Beyond is in the midst of a Hail Mary turnaround as comparable-store sales and earnings have plunged in recent quarters. The board brought in Target's former chief merchandising officer, Mark Tritton, in November to lead the company's turnaround, which elicited cheers from investors.

Tritton has been busy, selling off personalizationmall.com for $252 million and making changes to stores. Last week, the company said it would cut approximately 500 jobs in an effort to slash selling, general, and administrative costs by about $85 million annually.

However, the coronavirus threat will only complicate matters as the company attempts to bring customers back into stores. Like most retailers, it relies on China, at least indirectly, for much of its merchandise.

Now what

Shares are now down more than 20% since the coronavirus sell-off began in earnest last week. The company has yet to comment on the issue and won't report earnings until April, but other retailers, like Macy's, have said that they have seen a slowdown in goods coming from China. If the virus continue to inspire fear in consumers and investors, Bed Bath & Beyond shares are likely to head even lower.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Bed Bath & Beyond Inc. Stock Quote
Bed Bath & Beyond Inc.
BBBY
$9.23 (8.08%) $0.69

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.