What: Shares of Bed Bath & Beyond (NASDAQ:BBBY) fell 10.5% last month, according to data provided by S&P Global Market Intelligence. Sluggish sales and concerns regarding intensifying competition are taking a toll on the home-furnishings retailer.
So what: Bed Bath & Beyond's January swoon comes on the heels of a nearly 40% plunge in 2015. Investors appear to be losing patience as the company continues to struggle with declining store traffic and stagnant sales. Consumers are increasingly shopping online, and Bed Bath & Beyond has been slow to adapt.
To right the ship, management is stepping up its e-commerce investments. These efforts are beginning to bear fruit, with comparable sales from the company's digital channels jumping more than 25% in the third quarter. Investors, however, were unimpressed, and appear to be focusing more on the "low single-digit" decline in comps for Bed Bath & Beyond's physical stores.
Now what: Bed Bath & Beyond's management is wise to focus on its online initiatives. With more and more retail sales taking place via the Internet every year, it's imperative for the company to establish a legitimate online platform if it hopes to compete with the likes of Amazon and other e-commerce leaders. If successful in this regard, Bed Bath & beyond will likely be rewarded by investors. If not, the company stands to continue to suffer from the relentless growth of online retail.
Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com. The Motley Fool recommends Bed Bath & Beyond. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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