NEW YORK (AP) — Shares of Bed Bath & Beyond dropped sharply in premarket trading on Thursday as the housewares company's second-quarter earnings disappointed and it provided a weak third-quarter forecast.
Late Wednesday Bed Bath & Beyond Inc. reported earnings of 98 cents per share for the period ended Aug. 25. That fell short of the $1.03 per share that analysts surveyed by FactSet expected.
The Union, N.J., company anticipates third-quarter earnings between 99 cents and $1.02 per share. Wall Street predicts $1.03 per share.
Laura Champine of Canaccord Genuity said in a client note that the retailer's quarterly performance was dragged down by higher payroll, occupancy and advertising expenses partly due to the relocation of its headquarters and its Cost Plus acquisition.
The analyst reaffirmed a "Buy" rating and lowered Bed Bath & Beyond's price target to $73 from $75.
Jefferies' John Marrin kept a "Buy" rating and $78 price target, saying that the company's stock price is very reasonable and that he continues to like its longer-term prospects.
Marrin said that Cost Plus delivered a lot more in the quarter than anticipated, which shows its ongoing momentum.
The analyst also believes Bed Bath & Beyond's sales strengthened throughout the quarter and that it may benefit in the third quarter from relatively easy sales comparisons.
The retailer's stock fell $3.34, or 4.9 percent, to $65.45 before the market open.
