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Shares of Bed Bath & Beyond fell on Thursday, after the retailer reported a 5% drop in quarterly sales from a year ago, which it said was largely due to the sale of non-assets. essentials like Cost Plus World Market and the ongoing store closings that are part of it. of its larger recovery plans.
The title was down more than 12% in pre-market trading.
Comparable store sales for its entire business, which includes Buy Buy Baby and Harmon Face Values, increased 2%, up for the second consecutive quarter. Digital sales soared 77% from a year ago, fueled by 94% online growth at the namesake Bed Bath banner.
Many Americans stayed at home during the Covid pandemic, prompting them to cook, clean, organize, and redecorate more. Sales of home organization, food preparation for the kitchen, bedding, bathroom and home decor accounted for two-thirds of Bed Bath’s total sales in the quarter, the company said.
Here’s how Bed Bath & Beyond did in its third quarter ended Nov. 28, compared to what analysts expected, based on Refinitiv data:
- Adjusted earnings per share: 8 cents vs. 19 cents, expected
- Revenue: $ 2.62 billion vs. $ 2.75 billion, expected
For the three-month period ended November 28, Bed Bath reported 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, one year earlier.
Excluding $ 86 million in one-time charges related to losses on asset sales, restructuring and impairment charges, the company earned 8 cents per share. It was below the 19 cents per share that analysts were expecting.
Net sales fell 5% to $ 2.62 billion from $ 2.76 billion a year ago. It was also lower than the $ 2.75 billion forecast by analysts.
Comparable store sales, which track sales online and in Bed Bath stores that have been open for at least 12 months, increased 2%, driven by online demand from shoppers. Bed Bath said it gained 2.2 million new digital customers in the quarter, with 36% of its digital sales coming from stores. Sixteen percent of online purchases were picked up by customers in stores, he said.
“Once the elections kicked off and Covid started to ramp up, customers built muscle and developed an understanding of these [pick up] “CEO Mark Tritton told CNBC in a phone interview.” Week after week this holiday season, we’ve seen those rates rise exponentially.
However, as the big box retailer works on hundreds of store closures, it will likely take longer for Bed Bath’s turnaround plans to translate into sustainable growth – growth that lasts beyond the push. she experienced during the pandemic. In July, the company said it aims to close around 200 stores – many of those Bed Bath stores – by 2022. It is currently closing more than 40 stores this year.
Bed Bath said on Thursday it was calling for comparable sales in its fiscal fourth quarter roughly in line with the period a year earlier. Net sales are estimated to be lower by a double-digit percentage, in part due to ongoing closings, the company said. Analysts were calling for a 6% drop in sales, according to Refinitiv.
Bed Bath set longer-term financial targets in October, calling for same-store sales ‘stability’ in fiscal 2021, and an increase from low to mid numbers through 2023. This outlook remains unchanged.
During the Covid crisis, the company also said it was prioritizing merchandising and marketing for consumers’ investments in their homes. His efforts seem to be paying off. During the quarter, it said it gained market share in the beds category, thanks to improving trends in the bathroom and kitchen, citing data from the NPD Group.
“We have a very different organization today than we had in 2019 and before,” Tritton said.
“If you think about 2020, not only do we have [Covid] storm and ensuring the safety of our customers and our teams, we have rebuilt the strategy of return to growth. We have also sold five companies, ”he said. Now we can really double the continued evolution of our Bed Bath & Beyond takeover. “
Starting this year, Bed Bath is launching more than 10 private labels, in the hope that these new options will help it differentiate itself from competitors like Walmart, Target and Amazon, all of which have performed strongly during the pandemic. .
On Thursday, Bed Bath said it “feels confident it will continue to deal with the headwinds linked to Covid resulting from lower traffic in stores and rising shipping costs.”
Its outlook assumes its stores will not be required to close due to government restrictions caused by the health crisis.
Shares of Bed Bath & Beyond have risen about 27% in the past 12 months, as of Wednesday’s close. The company has a market capitalization of $ 2.6 billion.
Find the full results press release here.
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