A client exits a Bed Bath & Beyond retailer in New York.
Michael Nagle | Bloomberg | Getty Images
Bed Bath & Beyond mentioned Wednesday its sales tumbled practically 50% during its newest quarter, even as on-line sales surged greater than 100% during April and May, with shoppers stocking up on cleansing provides and residential decor.
The firm mentioned it plans to completely close roughly 200 of its namesake stores over the following two years, beginning later in 2020, as it really works towards getting again to profitability towards the backdrop of the coronavirus pandemic. As of May 30, it operated a complete of 1,478 stores, together with 955 Bed Bath & Beyond outlets.
Its shares have been falling practically 7% in after-hours buying and selling.
Bed Bath — which additionally owns the chains Buybuy Baby, Christmas Tree Shops and Harmon Face Values — mentioned these actions ought to generate annual value financial savings of between $250 million and $350 million, excluding associated one-time prices.
“We saw there were a number of stores dragging us down,” Chief Executive Mark Tritton advised CNBC in a telephone interview. “We will continue to look at the rest of our concept doors, now that we have established the data criteria.”
Here’s how the corporate did during its fiscal first quarter ended May 30:
- Adjusted loss per share: $1.96
- Revenue: $1.31 billion
Bed Bath mentioned its web loss narrowed to $302.29 million, or $2.44 per share, from $371.09 million, or $2.91 a share, a 12 months in the past.
Excluding one-time gadgets, it had a lack of $1.96 per share.
Sales fell 49% to $1.31 billion from $2.57 billion a 12 months in the past, as the retailer’s stores have been quickly compelled shut for a lot of the quarter like many different corporations, to strive to assist curb the unfold of Covid-19.
Analysts have been calling for Bed Bath to report an adjusted lack of $1.22 per share on income of $1.39 billion, in accordance to Refinitiv estimates.
Online sales surged 82% during the interval, with will increase of greater than 100% during April and May, the corporate mentioned. Digital sales represented about two-thirds of its first-quarter sales.
Gross margins dropped almost eight proportion factors, partially due to the corporate promoting extra on-line, which comes with increased success and transport prices.
According to Tritton, as Bed Bath’s stores are reopening, many are performing forward of the retailer’s inside expectations. Consumers during the pandemic have shifted from stocking up on cleansing provides, water filters and low, to bigger-ticket gadgets like dwelling decor, bedding and equipment for the yard, he mentioned. This pattern additionally ought to assist revenue margins, he mentioned.
“Home is now everything,” Tritton advised CNBC. “It’s the epicenter.”
Bed Bath mentioned it won’t present a 2020 outlook right now, as the pandemic “remains volatile.”
Some retailers together with Levi’s and Macy’s are presently taking a look at having to close stores for a second time, as Covid-19 circumstances are spiking in states together with Florida and Texas. Some native governments are, as soon as once more, tightening restrictions on which companies might function to strive to management the outbreak. Meanwhile, Apple has already reclosed dozens of stores by itself.
Bed Bath mentioned Wednesday that it believes it has a “strong financial position” to handle by the disaster. It ended the primary quarter with roughly $1.2 billion in money and investments.
Bed Bath shares have fallen almost 40% this 12 months. The firm has a market cap of $1.three billion.