A buyer leaves a Bed Bath & Beyond store in New York.
Michael Nagle | Bloomberg | Getty Images
Bed Bath & Beyond said on Wednesday that sales fell nearly 50% in the last quarter, although online sales increased more than 100% in April and May, and consumers stocked up on detergents and home decor.
The company plans to permanently close around 200 of its stores of the same name in the next two years, starting in 2020, in order to become profitable again against the background of the coronavirus pandemic. As of May 30, the company operated a total of 1
The shares fell by more than 8% in after-hours trading.
Bed Bath – which also owns the chains buybuy Baby, Christmas Tree Shops and Harmon Face Values - said that these measures should result in annual cost savings of between $ 250 and $ 350 million without the one-off costs involved.
“We have seen a number of businesses pull us down,” Chief Executive Mark Tritton told CNBC in a phone interview. “After we have established the data criteria, we will continue to deal with the remaining concept doors.”
This is how the company developed in its first business quarter, which ended on May 30:
- Adjusted loss per share: $ 1.96
- Revenue: $ 1.31 billion
According to Bed Bath, net loss decreased from $ 371.09 million, or $ 2.91 per share, a year ago to $ 302.29 million, or $ 2.44 per share.
Without one-time effects, the company lost $ 1.96 per share.
Revenue decreased 49% from $ 2.57 billion in the previous year to $ 1.31 billion as the retailer, like many other companies, was temporarily closed for much of the quarter to curb the spread of Covid-19 .
Analysts asked Bed Bath to report an adjusted loss of $ 1.22 per share on sales of $ 1.39 billion, according to Refinitiv estimates.
Online sales increased 82% in the period under review, and more than 100% in April and May. Digital sales accounted for around two thirds of sales in the first quarter.
Gross margins decreased by almost 8 percentage points, partly due to the fact that the company sells more online, which means higher fulfillment and shipping costs.
According to Tritton, many reopening the retailer’s internal expectations when reopening Bed Bath stores. Consumers during the pandemic have shifted from storing detergents, water filters, and coffee to items with bigger tickets like home decor, bedding, and backyard accessories, he said. This trend should also improve profit margins, he said.
“Everything is home now,” Tritton told CNBC. “It’s the epicenter.”
Bed Bath said there is currently no outlook for 2020 as the pandemic “remains volatile”.
Some retailers, including Levi’s and Macy’s, are currently trying to close stores for the second time as Covid 19 cases are becoming more common in states like Florida and Texas. Some local governments are again tightening the restrictions that companies can use to try to control the outbreak. Apple has now closed dozens of stores.
Bed Bath said Wednesday that it believed it had a “strong financial position” to deal with the crisis. The first quarter ended with approximately $ 1.2 billion in cash and investments.
Bed Bath shares fell nearly 40% this year. The company has a market cap of $ 1.3 billion.
The full press release on the result can be found here.