Bed Bath & Beyond delivered a disappointing third quarter, pressured by a lack of replenishment inventory due to supply chain bottlenecks that cost the company about $100 million.
The home goods retailer also revealed the locations of 37 stores it plans to close by the end of February (list at end of article). In July 2020, Bed Bath & Beyond announced plans to close about 200 stores during the next years. The closings are part of Bed Bath & Beyond's multi-year transformation that includes revamping stores, focusing on e-commerce and adding more exclusive, or owned, brands.
Bed Bath & Beyond reported a net loss of $276.4 million, or $2.78 per share, for the quarter ended Nov. 27, compared to a loss of $75.4 million, or $0.61 per share for the year-ago period. Adjusted loss per share was $0.25, below analysts’ estimates of earnings of a penny per share.
Sales fell to $1.88 billion from $2.62 billion, missing estimates of $1.95 billion. The retailer attributed some of the declines were due to planned store closures.
Total comparable sales fell 7%. By banner, Bed Bath & Beyond’s comp sales fell 10%. BuyBuy Baby comp sales increased in the mid-teens percentage.
"After our previously announced slower start to sales in September and October, we drove a change in trends by November with our comp decline improving, particularly in stores,” stated CEO Mark Tritton. “However, overall sales were pressured despite customer demand due to the lack of availability with replenishment inventory and supply chain stresses that had an estimated $100 million, or mid-single-digit, impact on the quarter and an even higher impact in December.”
On the company’s earnings call, Tritton said that he expects supply chain headwinds will continue in the near-term.
“We are working with our vendors to target constrained inventory and improve flow to stores,” Tritton told analysts. “We must enhance our ability to fulfill our store demand.”
In positive developments, the chain’s Beyond+ loyalty program grew by nearly half a million members in the quarter. And its BuyBuy Baby banner continues to deliver double-digit growth. Bed Bath & Beyond also recently entered into a partnership with grocery giant Kroger.
“We now intend to expand the owned brands strategy to BuyBuy Baby in 2022 as we look at margin enhancing strategies, given sales results in this business have stabilized as a result of our targeted efforts to improve this banner,” Tritton stated. “We are identifying exciting new opportunities to drive sales and BuyBuy Baby is an important cornerstone of our plans, including our recently announced collaboration with Kroger and our own digital marketplace.”
[Read More: Kroger, Bed Bath & Beyond enter into in-store, online pilot]
“Having concluded just the third quarter of our multi-year plan, we will continue to execute our strategic transformation by diagnosing and reforming our legacy business to achieve our goals,” Tritton added. “As we prepare for 2022, we look forward to operating in a normalized environment with a base of business upon which to grow.”
For the fourth quarter, Bed Bath & Beyond expects sales of $2.1 billion and adjusted earnings in the range of $0 to 15 cents. Analysts were expecting sales of $2.25 billion and EPS of 70 cents.
For the year, the company expects sales of $7.9 billion, high single-digit comparable sales growth, and adjusted EPS in the range of flat to a loss of $0.15. Analysts were looking for sales of $8.14 billion, comparable sales growth of 11.7%, and earnings per share of $0.74.
Here are the 37 stores Bed Bath & Beyond will close, most by the end of February, as reported by USA Today.
- Oxford: 1000 Oxford Exchange Blvd.
- Casa Grande: 1004 North Promenade Parkway
- Yuma: 1212 South Castle Dome Ave.
- Campbell: Almarida Place, 515 East Hamilton Avenue
- Laguna Niguel: 32391 Golden Lantern
- Milpitas: 147 Great Mall Drive
- Rancho Santa Margarita: 22235 El Paseo
- Tustin: Tustin Market Place II, 13692 Jamboree Road
- Orange City: 963 Harley Strickland Blvd.
- Atlanta: 130 Perimeter Center West
- Marietta: 4475 Roswell Road
- Pocatello: 1732 Hurley Drive
- Duluth: 1303 Miller Trunk Highway
- Eagan: 1295 Promenade Place
- St. Joseph: 5201 North Belt Highway
- Meridian: 131 S. Frontage Road
- Edgewater: Edgewater Commons, 489 River Road
- Auburn: Auburn Plaza, 217 Grant Ave.
- Canandaigua: 328 Eastern Blvd.
- Glenmont: 388 Feura Bush Road
- Niagara Falls: 1520 Military Road
- Plainview: 401 S. Oyster Bay Road
- Port Chester: 25 Waterfront Place
- Spring Valley: 14 B Spring Valley Marketplace
- Mansfield: Ontario Towne Center, 2259 Walker Lake Road
- Pittsburgh: 7507 McKnight Road
- York: 2845 Concord Road
- Brownsville: Sunrise Palms Shopping Center, 3000 Pablo Kisel Blvd.
- San Angelo: 4169 Sunset Drive
- Vienna: 2051 Chain Bridge Road
- East Wenatchee: 511 Valley Mall Parkway
- Longview: 200 Triangle Center
- Seattle: 2600 SW Barton St.
- Union Gap: 1740 East Washington St.
- Sheboygan: Memorial Mall, 3347 Kohler Memorial Drive
- Triadelphia: 555 Cabela Drive