Bed Bath & Beyond on Thursday said sales plunged by 28% within the fiscal second quarter, because the home goods retailer struggled to attract customers.
Its shares bounced around in premarket trading, as investors assessed the report. The corporate’s stock has been volatile, fueled partially by the meme stock frenzy in addition to drastic changes to its business.
Bed Bath reiterated its full-year outlook, saying it anticipates comparable sales to say no by about 20% as its business improves within the back half of the fiscal 12 months.
Here’s how the retailer did within the three-month period ended Aug. 27 compared with what analysts were anticipating, based on Refinitiv data:
- Loss per share: $3.22 adjusted vs. $1.85 expected
- Revenue: $1.44 billion vs. $1.47 billion expected
The corporate’s net loss widened significantly to $366 million, or $4.59 per share, from $73 million, or 72 cents per share, a 12 months earlier. Its net sales dropped from $1.99 billion within the year-ago period.
Comparable sales declined 26% within the second quarter. The important thing retail metric, often called same-store sales, is a year-over-year comparison of online sales and sales at stores which have operated for 12 full months following a gap period of about six to eight weeks.
Considered one of the intense spots of Bed Bath’s business, Buybuy Baby, also posted a pointy drop within the quarter. Its comparable sales decreased within the high teens compared with growth of high teens within the year-ago quarter.
The quarterly report doesn’t reflect the corporate’s latest turnaround effort. In late August, it shared plans to shake up its merchandising strategy, and strengthen its namesake stores and baby goods chain, Buybuy Baby. It also announced cost-cutting measures, including layoffs and shutting about 150 Bed Bath & Beyond stores.
Read more: Here’s a map of Bed Bath & Beyond store closures
Interim CEO Sue Gove said in a news release Thursday that the corporate is fixing inventory problems by speeding up markdowns of some merchandise. She said Bed Bath is “confident that our current liquidity will enable the essential changes we’re implementing.”
Gove said the corporate’s loyalty program, Welcome Rewards, has grown by greater than 1.3 million because the end of August, bringing it to a complete of 6.4 million members because it launched this summer. She said it’s lowering costs by about $250 million for the second half of the fiscal 12 months, as it really works to ramp up sales.
Bed Bath faces several significant challenges, including mounting debt, vacant leadership roles and tense relationships with vendors. As the corporate gears up for the crucial holiday season, it’s led by Gove, an interim CEO, and interim CFO Laura Crossen. Its board pushed out former CEO Mark Tritton in June, and CFO Gustavo Arnal died by suicide in early September.
In late August, Bed Bath got some relief by securing greater than $500 million of latest financing, including a $375 million loan.
Bed Bath’s liquidity is $850 million after repayments and borrowing that took place before the second quarter began, the corporate said Thursday.
The approaching months will test whether the retailer can get hot holiday items and popular national brands, that are pivotal to its latest strategy. In accordance with former company executives, Bed Bath has had strained relationships with suppliers — and will face a repeat of two Christmases ago, when it didn’t have several hot products from well-known national brands.
In a news release, Gove said working with Bed Bath’s suppliers has “been a crucial focus area” and said its debt and liabilities with them “are considerably healthier than within the prior quarter.”
As of Wednesday’s market close, Bed Bath’s shares are down about 56% up to now this 12 months. The corporate’s market value is $516.5 million.
Read the corporate’s earnings release here.
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