Shares of Bed Bath & Beyond plummeted on Thursday after the retailer issued guidance calling for lower-than-expected profit for the second quarter. The stock, which had gained 27 percent year-to-date before the setback, was down 17.5 percent as of 2:30 PM ET. The Union, New Jersey-based home décor retailer said it expects profit in the current quarter, which ends in August, to be in a range of 97 cents to $1.03 a share, whereas economists in a recent Bloomberg survey had expected guidance for earnings of $1.08 per share.
Also disappointing, Bed Bath reported that same store sales, or those in stores open at least a year, rose just 3 percent during the first quarter, compared to a 7 percent uptick in the first three months of 2011. Back in May, the retailer agreed to pay $495 million in cash to acquire Cost Plus Inc. in a deal that would give the company 295 new stores in addition to a new, established e-commerce platform to help it compete with e-commerce powerhouses like Amazon and eBay more effectively. Bed Bath will also assume control of Cost Plus's World Markets and Cost Plus Imports chains.