In a time period when observers and vendors wondered if a bankruptcy filing might be imminent, Bed Bath & Beyond instead affirmed that it is looking at all options in dealing with the company’s financial difficulties even as it announced third-quarter results that included a 33% decline in sales and a significantly larger adjusted net loss.
An analyst consensus estimate published by Yahoo Finance looked for an adjusted net loss of $2.11 per diluted share and sales of $1.34 billion.
Net sales were $1.26 billion versus $1.88 billion in the year-previous quarter, with the 33% decrease primarily driven by a 32% comparable sales decline. Bed Bath & Beyond banner comps slid by 34% in the quarter year over year while those at buybuy BABY declined in the low-twenties percent range, the company stated. Lower in-stock position of approximately 70% and a decrease in customer traffic hit comparable sales.
Operating loss was $450.9 million versus an operating loss of $86.1 million in the year-before period.
In an abbreviated conference call, Sue Gove, Bed Bath & Beyond CEO, largely reiterated what the company stated in a recent business update. She stated that the company’s merchandising strategy had veered away from customer preferences, and while the new leadership team that the company put in place had set about restoring operations to what shoppers expected, particularly as shifting the assortment balance back toward national brands and away from private labels. Still, the initial actions resulted in inventory constraints that hurt business. Although the company is building back in-stocks back to a more normal level, the process of getting the assortment balance right is ongoing.
“Rebuilding national brand presence will take time,” Gove said.
Bed Bath & Beyond continues reducing SG&A toward an annualized $500 million goal and pursuing a store closing process at 150 locations, Gove said. She added that the company is using stores that it’s closing to run clearance sales and is looking at even deeper SG&A cuts.
As for financing, Gove said Bed Bath & Beyond is considering all strategic alternatives available to keep the company operating as its advances near- and long-term goals. The advisors and executives on board have the experiences necessary to successfully navigate the complex financial situation that Bed Bath & Beyond faces, she asserted, emphasizing that the company is considering multiple options to keep it moving toward a stronger position. She also said that the company remains committed to updating all stakeholders, and especially employees and partners, on plans as they develop. At the same time, Bed Bath & Beyond will keep working to improve its omnichannel operations by supporting services such as same-day shipping that address the preferences of today’s shoppers.