Bed Bath & Beyond
A Bed Bath & Beyond store logo is pictured on a building in Boca Raton, Florida (Photo: Reuters / Carlo Allegri)

US domestic merchandise retail store operator Bed Bath & Beyond just reported worse-than-expected sales numbers for both December and January. The sharp decline in key measures of sales had likely spooked investors this week, resulting in a significant drop in the company's stock prices.

Bed Bath & Beyond CEO Mark Tritton mentioned in a statement that the decline was merely a "short-term pain" that was part of its ongoing efforts to stabilize the business. Tritton's statement, unfortunately, did not manage to appease all of its investors as the company's stock still plunged by more than 17 percent to $12.30 per share in late trading in New York. The shares tanked a further 25 percent on Wednesday. In 2019, the company's stocked had rallied upwards by 53 percent. This week's hit however has managed to mostly erase last year's gains. 

The company revealed that its comparable-store sales, a gauge of its retail success, had fallen by 5.4 percent over the past two months. Bed Bath & Beyond mostly attributed the lower numbers to ongoing inventory management issues that it is still trying to rectify.

 Fortunately, the company's earnings over the past two months did have a number of bright spots, including a significant increase in its digital sales. Bed Bath & Beyond reported a 20 percent increase in its digital sales over the past couple of months, with Tritton describing it as a "notable positive shift" resulting from its ongoing strategy. Tritton added that the company aims to solidify that growth while at the same time addressing management issues.

The former Target executive previously announced a massive operation and management overhaul strategy following an extensive review. So far, the strategy has resulted in some cost-savings and minor improvements, most of which are still seen as insufficient by the company's shareholders.

Tuesday's sales report will be part of the company's fourth quarter earnings, which will conclude during the end of this month. Its third-quarter results, which were released last month, also did not inspire investor confidence as some analysts had described it to be "much worse than expected."

Like other US retailers, Bed Bath & Beyond has been struggling to draw in shoppers to its brick-and-mortar locations amid increasing competition and the growing popularity of online shopping. Over the past quarters, the company has been reporting declining and stagnant sales, leading to the company's decision to conduct an overhaul.

During its previous quarter call with investors, Tritton pointing out several issues that he felt was dragging the company down. This included apparently trouble with the company's inventory systems, lack of digital-savvy tools and solutions, and the uncompetitive pricing of its products.