Morgan Stanley analyst Simeon Gutman said Bed Bath & Beyond's Q3 preannouncement indicates even softer topline trends and margins than anticipated. Retail choppiness played a roll but the analyst said the issues are more of a combination of aggressive traditional retailers and new entrants in the home furnishings segment and a waning competitive position in e-commerce. Gutman said digital sales are growing rapidly but at the consequence of a negative mix shift, and unless the cost structure is lowered, Bed Bath & Beyond will continue to see further pressure on profits. The analyst rates Bed Bath & Beyond Underweight.