What happened

Bed Bath & Beyond (NASDAQ:BBBY) reported its second-quarter financial results today, and there was no way to put a positive spin on the release. Investors grasped that fact quickly and tanked the stock in Thursday-morning trading. As of 11:45 a.m. EDT, the company's shares were down 24% after having bottomed with a drop of more than 29% earlier in the session. 

So what

The retailer reported a net loss of $0.72 per share on revenue of $1.99 billion. Adjusted earnings were $0.04 per share compared to analyst expectations of $0.52 per share. Revenue also missed expectations by more than $70 million and represented a 26% drop compared to the prior-year period. It wasn't just analyst expectations that were missed -- the company didn't meet its own estimates for the quarterly period, blaming "external disruptive forces." 

red arrow crashing into the ground representing stock crashing.

Image source: Getty Images.

Now what

Bed Bath & Beyond president and CEO Mark Tritton said the normally strong August period saw traffic slow significantly, causing sales for the full three-month period to come up short. Tritton said reasons for the shortfall ranged from consumer hesitancy due to the COVID delta variant spread to supply chain constraints and sharper cost inflation than the company had anticipated. 

Attempting to highlight the positive side of the quarter, Tritton said in a statement, "Encouragingly, we've continued to make progress against the fundamentals of our three-year transformation strategy." He cited momentum in the company's buybuy BABY brand as well as outperformance in its higher-margin owned brands. 

In the short term, however, investors are accelerating a drop in the stock seen over the past several months. With today's hit, Bed Bath & Beyond shares are down more than 40% since late June, bringing it back to approximately where it began in 2021. The company will have to offset the external issues to the satisfaction of investors before the stock is likely to see meaningful gains again. 

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.