Bed Bath & Beyond shares tumbled on Thursday after the retailer reported a quarterly sales drop of 5% from a year ago, which he said was mainly due to the sale of non-core assets such as Cost Plus global market and ongoing store closures of its larger turnaround plans.
The share fell by more than 12% in the pre-trade.
Sales of the same store for its entire business, which includes Buy Buy Baby and Harmon Face Values, rose 2%, rising for the second consecutive quarter. Digital sales have risen 77% from a year ago, fueled by 94% online growth on Bed Bath’s name banner.
Many Americans stayed home during the Covid pandemic, which prompted them to cook, clean, organize, and renovate more. Sales of home organization, kitchen preparation, bedding, bath and interior decor accounted for two-thirds of Bed Bath’s total sales during the quarter.
Here’s how Bed Bath & Beyond performed during the third quarter ended November 28, compared to what analysts expected, based on Refinitiv data:
- Adjusted earnings per share: 8 cents versus 19 cents, expected
- Revenue: $ 2.62 billion versus $ 2.75 billion, expected
During the three-month period ended November 28, Bed Bath had a net loss of $ 75.44 million, or 61 cents per share, compared to a loss of $ 38.55 million, or 31 cents per share, a year before.
Excluding $ 86 million in one-time costs associated with losses on asset sales, restructuring and impairment costs, the company earns 8 cents per share. It was lower than the 19 cents per share analysts had expected.
Net sales fell 5% to $ 2.62 billion from $ 2.76 billion a year ago. It also comes under analysts’ forecast of $ 2.75 billion.
Sales in the same store, which open sales online and in Bed Bath stores for at least twelve months, increased by 2%, which was increased by the online demand from buyers. Bed Bath said it gained 2.2 million new digital customers during the quarter, with 36% of its digital sales reaching stores. Sixteen percent of e-commerce purchases were picked up by customers in stores.
‘Once the election started and Covid started pushing up, customers built muscle and developed an understanding of it. [pick up] services, and quickly turned to it, “CEO Mark Tritton told CNBC in a telephone interview.” This week we have seen these rates rise exponentially. “
As the wholesaler trades through hundreds of store closures, it is likely to take more time for Bed Bath’s service plans to lead to sustainable growth – growth that is longer than the boost it experienced during the pandemic. In July, the company said it intended to close about 200 locations by 2022 – many of the bed bath shops. It is currently closing more than 40 stores this year.
Bed Bath announced Thursday that sales of the same stores during the fiscal fourth quarter are roughly similar to the previous year. Net sales are estimated to be reduced by a double-digit percentage, in part due to continued closures, the company said. According to Refinitiv, analysts called for a 6% drop in sales.
Bed Bath set long-term financial targets in October calling for sales of the same stores to be ‘stable’ in fiscal 2021 and low to mid-single digits to rise by 2023. The outlook remains unchanged.
During the Covid crisis, the company also said it preferred merchandise and marketing to investors in their homes. His efforts seem to be bearing fruit. During the quarter, he said he gained market share in the bed category, improving trends in bath and kitchen, citing data from the NPD group.
“We have a very different organization today than in 2019 and before,” Tritton said.
‘If you think about 2020, we did not just endure it [Covid] to storm and protect our customers and our teams, we have rebuilt the strategy to return to growth. We also sold five companies, “he said. Now we can double the ongoing evolution of our bed bath and further recovery. “
As of this year, Bed Bath is launching more than ten private-label brands, hoping that these new options will help differentiate it from competitors such as Walmart, Target and Amazon, all of which performed well during the pandemic.
Bed Bath said Thursday that it “feels confident to continue with the Covid-related headwinds due to lower store traffic and increased shipping costs.”
His outlook assumes that stores will not have to close due to the government’s constraints brought about by the health crisis.
Bed Bath & Beyond’s shares have risen about 27% over the past twelve months. The company has a market capitalization of $ 2.6 billion.
Search the full press release for earnings here.