Bed Bath & Beyond got a fiscal fourth-quarter boost from from consumers spending more on their homes. The retailer’s CEO is sure more good news is on the way.
Bed Bath & Beyond (BBBY) said it earned $9 million, or eight cents a share; on an adjusted basis, which excludes non-recurring items like depreciation, amortization, good will and other impairments, earnings per share were 40 cents. Revenue fell 16% year over year to $2.62 billion. Analysts were looking for EPS of 31 cents on revenue of $2.63 billion.
The company said total same-store sales rose 4% in the quarter, led by an 86% surge online; consensus called for less than 1% growth. Aside from the previous two quarters, Bed Bath hadn’t reported positive comparable sales since early 2017. It struck an upbeat tone about the current fiscal first quarter, predicting that net sales will grow between 65% and 70% in the period, excluding divested businesses, from the first quarter of 2020, which was hit by store closures.
For the full year, Bed Bath reaffirmed its expectation for sales of $8 billion to $8.2 billion; analysts are projecting sales of $8.2 billion. The company boosted its three-year share repurchase program to $1 billion from $825 million.
Chief Executive Officer
spoke with Barron’s about the report, highlighting the 6% same-store sales growth at the Bed Bath brand and ongoing strength in its digital business: The company reported 11 million new digital customers for the year as a whole, on an 83% increase in digital sales, to $3 billion. “We really took a difficult moment and turned it into a mastered moment for our digital business.”
While it’s still early days for fiscal 2021, Tritton is upbeat about Bed Bath’s momentum, and the sustainability of home spending. “It wasn’t a fad, but a trend,” he says of people updating their houses and creating new home-based habits that will keep them more engaged with the brand.
Tritton notes that the company has also made impressive strides in reducing its leverage—Bed Bath lowered gross debt by about $1 billion for the year as a whole. Coupled with positive cash flow in the fourth quarter and improved overall liquidity, he says the company has a solid foundation and could easily afford the increased stock buyback activity.
The CEO previously spoke with Barron’s as the company prepared to launch the first of eight planned private label brands last month, and while Bed Bath will have more information about that initiative next quarter, Tritton says that the initial “customer response has been terrific,” not only to the products but the company’s modernized omnichannel approach. With two more brands launching this month and next, respectively, he expects the company to be well positioned for the key back to college period.
“We see even better things ahead,” Tritton says.
Write to Teresa Rivas at [email protected]