Retailer’s Blockbuster Qtr. Surges Profits, Comps, Online
Forbes.com, Walter Shoulberg
An expanded e-commerce business — up 89% — was once again the hero this quarter for Bed Bath & Beyond, driving the home specialty chain’s first comp store sales increase since the end of its 2016 fiscal year.
At the same time the retailer posted improvements in several key measurements: gross margin, cash flow, adjusted EBITDA and, most importantly, the bottom line, with net earnings per diluted share of $1.75 versus a loss a year ago as well as losses over the past several quarters more recently. Adjusted net earnings per diluted share were $0.50, up 47% versus a year ago.
“This quarter in total has proven the confidence we have in our plan,” CEO Mark Tritton said in an interview with Forbes.com. “We remain committed to this process.” He added that he was especially pleased with the digital gains, which have continued into the third quarter, without any loss in profitability. “It’s gratifying for us to see that growth.”
For Tritton, who marks his one-year anniversary next month, the performance had to be encouraging, especially considering the long stretch of bad news the retailer has struggled with over the past several years. Those disappointing results caused a massive change in the company’s management and business direction, of which Tritton’s appointment was the capstone.
Since then he has brought in a new group of C-level executives in a major expansion of the company’s previously slim management level. He has also moved quickly to get the retailer up to speed in its digital and omnichannel capabilities including recent announcements to offer same-day delivery through Shipt and Instacart as well as expanding its partnership with Google to use its Cloud services for back-room technologies. Tritton has also announced the first 63 of what are projected to be a total of 200 store closings, mostly in its namesake banner. He said he remains committed to the full closing schedule completing by 2022.
Even with an overall 1% decline in net sales, the company beat most of the consensus estimates and it attributed the sales decline at least partially to the sale of its One Kings Lane business earlier in the year.
Still, there is much work to be done.