Bed Bath & Beyond Inc. suffered its worst stock decline in almost eight years, rattled by a disappointing forecast and an increasingly costly battle to ward off Amazon.com Inc. and other e-commerce sellers.

Heavy discounting and promotions weighed on its earnings forecast for the coming year, pushing it well below what analysts were targeting. The dour outlook sent the shares down as much as 20 per cent to US$17.26, the biggest intraday plunge since May 2010.

Bed Bath & Beyond has undertaken an expensive overhaul, attempting to remake both the e-commerce and brick-and-mortar parts of its business. That includes new store formats, loyalty programs and revamping its supply chain -- an ambitious list, said Jefferies LLC analyst Daniel Binder. It’s also spending more on shipping costs as it tries to catch up with Amazon online.

“Time will tell if it’s too much to handle at once,” Binder said in a note to clients on Thursday.

Earnings will be roughly US$2 to US$2.50 a share this year, the retailer said late Wednesday. Analysts were projecting US$2.77 on average.

Bed Bath & Beyond is under more pressure than some other traditional retailers since it sells the kind of items that can be easily purchased online. It also has relied heavily on discounts -- its 20 per cent off coupons are legendary -- to get customers in the door. In addition to Amazon muscling into its territory, e-commerce rival Wayfair Inc. has carved out a piece of the furniture business.

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With Thursday’s decline, the stock is now trading at its lowest point since 2008, when the economy was in the grips of the Great Recession. The stock had already fallen 2.2 per cent this year through Wednesday’s close and lost ground in each of the past four years.

Even with the weak forecast, sales came in a bit better than expected last quarter. On a same-store basis, they fell 0.6 per cent. Analysts were predicting a 2.3 per cent decline, according to Consensus Metrix.

Still, investors are more focused on declining profit margins -- and trying to figure out when they’ll hit bottom, Binder said.

The company is “struggling to get its footing,” he said.