Bed Bath & Beyond lowers their third-quarter expectations

New Jersey, December 3: Bed Bath & Beyond, one of leading domestic merchandise retail chain in the United States, reported on Tuesday that they are lowering the expectations for their fiscal third quarter after their same-store sales decreased more than they estimated.

The company has announced that they are expecting their third-quarter earnings to decrease, as their shares might fall to 31-35 cents per share, lower than their previous expectation of 41 to 47 cents per share in September. This is way below the company’s earnings last year which was at 52 cents each share.

There is also a drop in the estimated third-quarter sales of the company. It is estimated to go down by 0.7 percent compared to last year when they accounted for $1.79 billion in sales.

The company’s same-store sales have gone down by 5.6 percent for the third quarter, which is even lower than the flat to low single-digit decrease, which the company expected. Same-store sales refer to the sales made at the company’s open stores and are a good indicator of the company’s retail performance.

Steven H. Temares, chief executive officer of the company said , "the overall macroeconomic climate remains challenging, which, combined with liquidation sales of a major competitor, negatively impacted our fiscal third quarter."

Temares here, seems to be the referring to Linens ‘n Things, as the major competitor, who had asked for bankruptcy protection in May and In October, it announced that the company was liquidating sales at its store because they were unable to find a buyer for the company.

Other competitors of Bed Bath & Beyond, which include Pier 1 Imports Inc. and William-Sonoma Inc. have also tamed down their merchandise because of housing slump and the bad economy, which has harmed retailers selling merchandise in the home.

However, despite of the decrease in the third-quarter sales of Bed Bath & Beyond, they are not changing their 2008 outlook. They said that the two extra pre-Christmas shopping day this year would give an advantage to fourth-quarter sales. The company is scheduled to report their third-quarter earnings on January 7.

Tuesday, the company’s shares had decreased by 1.6 percent or 32 cents each share to $19.35 in after-hours trading.