Shares of Bed Bath & Beyond fell on Thursday, after the retailer reported a quarterly 5% drop in sales from a year ago, which it said was mainly due to the sale of non-core assets such as Cost Plus World Market and the closures of stores that are part of it. of their larger investment plans.
Shares fell more than 12% in premarket trading.
In-store sales of its entire business, which includes Buy Buy Baby and Harmon Face Values, rose 2%, rising for the second consecutive quarter. Digital sales soared 77% from a year ago, driven by 94% online growth in the eponymous Bed Bath flag.
Many Americans have stayed home during the Covid pandemic, forcing them to cook, clean, organize, and redecorate more kitchens. Home organization sales, kitchen food preparation, bedding, bathroom and interior decorating accounted for two-thirds of total Bed Bath sales during the quarter, the company said.
This is how Bed Bath & Beyond did during its third quarter ended Nov. 28, compared to what analysts expected, according to Refinitiv data:
- Adjusted earnings per share: 8 cents versus 19 cents, expected
- Revenue: $ 2.62 billion vs. $ 2.75 billion, projected
During the three-month period ended Nov. 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. action, a year earlier.
Excluding $ 86 million in one-time charges related to losses from asset sales, restructuring and impairment expenses, the company earned 8 cents a share. That was below the 19 cents per share analysts expected.
Net sales fell 5% to $ 2.62 million from 2,766 million last year. This also fell below analysts ’expectations to $ 2.752 billion.
In-store sales, which track online sales and Bed Bath stores 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 during the quarter, with 36% of digital sales achieved by stores. 16% of e-commerce purchases were picked up by customers in stores, he said.
“Once the election started and Covid started to rise, customers had built muscle and had built understanding of those [pick up] services, and they quickly focused on them, “Mark Tritton told CNBC in a telephone interview.” Week after week, this holiday season, we saw these rates increase exponentially. “
Although, as the department store retailer works through hundreds of store closures, more time is likely to be needed for Bed Bath’s investment plans to translate into sustainable growth, growth that lasts beyond of the impetus he has experienced during the pandemic. In July, the company said it aimed to close approximately 200 locations, many of these Bed Bath stores, by 2022. It is currently closing more than 40 stores this year.
Bed Bath announced Thursday that it would ask for sales at the same store during the fourth fiscal quarter to stay in line with the previous year’s period. Net sales are estimated to be lower at a double-digit percentage, due in part to continued closures, the company said. According to Refinitiv, analysts were calling for a 6% drop in sales.
Bed Bath set long-term financial goals in October, calling for sales in the same store to be “stable” during fiscal year 2021 and to increase single-digit low to mid-2023. That outlook remains unchanged.
During the Covid crisis, the company also said it has prioritized merchandising and marketing over consumer investments in its home. Their efforts seem to be bearing fruit. During the quarter, he said it gained market share in the bed category, with improving trends in bathroom and kitchen, citing data from the NPD group.
“Today we have a very different organization than we had in 2019 and earlier,” Tritton said.
“If you think about 2020, we haven’t just been able to resist [Covid] tempt and keep our customers and our teams safe, we have rebuilt the strategy to return to growth. We also sold five companies, “he said.” We can now double the ongoing evolution of our Bed Bath & Beyond Recovery. ”
Starting this year, Bed Bath will launch more than 10 private label brands, hoping that these new options will help differentiate it from rivals such as Walmart, Target and Amazon, which have had strong performance during the pandemic.
On Thursday, Bed Bath said it “feels confident to continue dealing with Covid-related headwinds resulting from lower store traffic and increased shipping costs.”
His outlook assumes that the closure of his stores will not be required due to government restrictions caused by the health crisis.
Shares of Bed Bath & Beyond have risen about 27% in the past twelve months, as of Wednesday’s closing date. The company has a market cap of $ 2.6 billion.
Find the full press release on earnings here.