Bed Bath & Beyond Q3 sales fall amid store closures, divestitures
Bed Bath & Beyond’s third-quarter sales fell 5% in as the chain continued to close stores and sell off non-core assets as part of its turnaround strategy.
The home furnishings chain reported a net loss of $75.44 million, or $0.61 per share, for the quarter ended Nov. 28, compared with a loss of $38.55 million, or 31 cents a share, in the year-ago period. Excluding $86 million in one-time charges tied to losses on asset sales, restructuring and impairment charges, the company earned $0.8 a share, below the $0.19 per share that analysts were expecting.
Total revenue fell 5% to $2.62 billion, missing the $2.75 billion predicted by analysts. The retailer attributed the drop primarily to planned store closures and divestitures of non-core assets.
In July, Bed Bath & Beyond announced plans to close about 200 stores, mostly namesake locations, during the next two years. The company is also shedding non-core assets to focus on its core namesake, BuyBuy Baby and Harmon Face Value businesses
Total same-store sales in the third quarter rose 2%. Same-store sales for the Bed Bath & Beyond brand increased 5%.
Total digital comparable sales rose 77%. Bed Bath & Beyond’s digital comp sales jumped 94%.
The retailer said it gained 2.2 million new digital customers during the quarter, with 36% of its digital sales fulfilled by stores. Sixteen percent online purchases were picked up in-store.
Sales at the Bed Bath & Beyond banner were driven by key destination categories that included home organization, kitchen food prep, bedding, bath, and indoor décor, which had comp sales growth of 11% (combined) and represented two-thirds of total Bed Bath & Beyond banner sales in the quarter. The retailer has been prioritizing merchandising and marketing investments in the five categories to strengthen its authority in the home space.
Gross margins in the quarter improved by more than 3 percentage points compared with the same period a year earlier and were steady with the preceding quarter.
“The consistent execution of our growth strategy is unlocking improved financial performance and we delivered a second consecutive quarter of comparable sales and profit growth,” said CEO Mark Tritton. “Additionally, we drove strong cash flow generation and balance sheet improvements in the third quarter and have re-initiated capital return to shareholders."