- The stock price of Bed Bath & Beyond Inc. (NASDAQ: BBBY) fell by over 15% during intraday trading. This is why it happened.
The stock price of Bed Bath & Beyond Inc. (NASDAQ: BBBY) fell by over 15% during intraday trading. Investors were responding negatively to Bed Bath & Beyond reporting a significant decline in the fiscal fourth quarter sales.
In an interview with CNBC, Bed Bath & Beyond CEO Mark Tritton said that the company’s fiscal first quarter results were going to be messy due to the stores being shut down in the year-earlier period due to the pandemic. So the company had to become completely reliant on its digital operations for its sales.
“What you see is some number turbulence,” said Tritton in the interview. “You’re going to see a bifurcation in the retail market.”
For the quarter, the EPS was $0.40 adjusted and revenue was $2.62 billion. The company’s net income during the period grew to $9.1 million compared to a loss of $65.4 million in the same period a year earlier.
Based on the $2.62 billion revenue figure, the net sales dropped around 16% from $3.11 billion a year earlier.
Besides the store closures, one of the biggest reasons for the year-over-year decline was the sale of the company’s Christmas Tree Shops and Cost Plus World Market businesses.
The company’s same-store sales increased 4%. And online sales increased 86% during the fourth quarter, but that growth was not able to fully offset the declines of the in-store traffic. About 41% of online sales were fulfilled by the company’s stores.
It’s worth mentioning that Bed Bath & Beyond had reaffirmed a prior sales outlook for the coming fiscal year due to positive sales momentum that carried into this quarter. The fiscal 2021 sales outlook is a range of between $8 billion and $8.2 billion.
Tritton is often credited for helping drive a turnaround at Target a few years ago when he served as the chief merchant. As the head of Bed Bath & Beyond, Tritton is overseeing a spend of about $250 million over the next 3 years to remodel 450 Bed Bath & Beyond shops. And Bed Bath & Beyond is going to launch at least 8 exclusive brands this year. The new brands include Nestsell (bedding and bath linen brand) and Haven (bath towels and bath accessories).
This year, Bed Bath & Beyond plans to purchase $325 million of its shares — up from $300 million last year. This is part of a three-year share repurchase authorization plan – which was increased from $825 million to $1 billion.
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.
