What happened
Bed Bath & Beyond (BBBY) shareholders lost ground to the market this week as shares fell more than 12% compared to a 1% decrease in the S&P 500. The specialty retailer was snared in a broader move by investors out of meme stocks and away from the retailing sector on fears of another COVID-19 wave.
So what
The decline started on Monday, when Bed Bath & Beyond fell along with several other meme stocks. Buying interest in this group has waned in recent weeks as investors seek relative safety in more stable growers.
Image source: Getty Images.
The emergence of a new COVID-19 variant also sparked a modest sell-off in the broader retailing sector this week on fears of another round of customer traffic declines. Bed Bath & Beyond has been a favorite bullish bet on a reopening boom, and anything that threatens that outlook would understandably pressure the stock.
Now what
The company is in the middle of its biggest selling season of the year, but its last operating update left investors worried about how it will perform. Traffic took a surprising turn lower in August, management said in late September, due to the rising case numbers of the delta variant. The big worry for Bed Bath & Beyond's holiday season is that this trend carried through into the peak selling period.
The retailer will answer that key question in its next earnings report, likely in early January. Investors at that time will have a better reading on the scale of the next COVID-19 wave, too, and how it might impact Bed Bath & Beyond's fragile recovery.
