Bed Bath & Beyond, like virtually every other non-essential goods retailer in the country, had a dismal spring quarter but its CEO Mark Tritton told Forbes.com he is “really pleased” with how reopening stores are tracking and even more so with how the retailer has performed online and with its omnichannel initiatives.
Even as sales collapsed by 49% as the vast majority of its stores were closed starting in March, Tritton said its online business grew by 82% and accounted for nearly two-thirds of its overall revenue. “We’re starting to see that level off now as stores reopen,” he said, but indicated once things settle in, e-commerce could represent somewhere in the mid-20% range of its overall sales, up from 19% pre-pandemic.
The shift in in-store versus online sales will be impacted by the planned closing of about 200 BBB-nameplate stores over the next two years, the first time the company has indicated a hard number in that range. Some of these will be planned closings based on lease expirations but some will represent “incremental” closings and they will cut across the brand geographically and format-type.
Virtually all of the company’s 1,400-plus stores, including the BuyBuyBaby and Harmon Beauty divisions, which remained open during the pandemic, are now back up and running, and Tritton said “50% of the store base is flat or up versus last year,” far above internal forecasts and something he said “you’ve got be pleased about.” He said the company’s vastly expanded BOPIS (Buy online pick-up in store) and curbside pickup capabilities – largely non-existent before the pandemic – are fueling physical store volume so far.
During the shutdown Tritton said the company had the chance to set up more remodeling and reformatting tests and that the results at those locations should give it more direction as it begins to scale up store refreshes. He said BBB is planning an investors’ day – originally planned for earlier this year – in October when he will announce a three-year plan that will include more details on store remodels and capital spending.
Bed Bath recently secured a new $850 million line of credit but Tritton said he wasn’t prepared to talk about how that money would be used. “We’re well-positioned financially and I believe we have the right momentum now to move forward.”
For the quarter, ended May 30, company sales were $1.3 billion, off 49% from a year ago. The net loss per share was $2.44, actually better than the $2.91 net loss a year ago. Excluding special items from both quarters, the adjusted net loss was $1.96 per share this year versus adjusted net earnings of $0.12 a year ago. While sales were slightly below Wall Street forecasts, the loss was somewhat higher than had been projected.
BBB stock closed Wednesday at $10.41 a share, up about 1.6%. As recently as a month ago, the stock traded at under $8.