Bed Bath & Beyond
reported a mixed fiscal first quarter early Wednesday with sales that easily topped expectations. Its CEO says the results show the company is laying the groundwork for ongoing success—no matter what happens to the meme trade.
Bed Bath & Beyond (ticker: BBBY) said it lost $51 million, or 48 cents a share, compared with a year-ago loss of $2.44 a share; on an adjusted basis, which excludes non-recurring items, it earned a nickel a share in the latest quarter. Revenue jumped 49% year over year to $1.95 billion. Analysts were looking for the company to earn eight cents a share on $1.88 billion in revenue.
Same-store sales soared 86% in the quarter, ahead of the 75% consensus estimate.
Bed Bath & Beyond stock is up 23.6% to $36.98 on Wednesday morning.
Barron’s spoke with Bed Bath CEO
about the results. He says that he’s most proud of the company’s ability to turn in “another quarter of consistent performance. Our goal is to deliver confidence about the longer-term plan and I’m confident that we have the fundamentals in place to drive growth. We’ve continually hit the mark.”
Tritton says that a lot of Bed Bath’s turnaround strategies are still in the green-shoots phase, but are showing promise. The company’s private-label brands—which will number a half dozen next month after the first launched in March—have received a warm welcome. “Consumers have taken to them immediately, they trust our curation.” He notes that Bed Bath doubled its house brands’ penetration rate in the quarter, putting it comfortably on track to reach its long-term goal of having these products account for 30% of sales. Customers are also responding well, he says, to the company’s increased omnichannel options, continuing to opt for same-day delivery and in-store pickup of online orders even as they return to shop in physical stores.
Looking ahead, he thinks the company will benefit in the current quarter from a more-normalized back-to-college season, as well as pent-up demand from “all those consumers who wanted to set up their dorm last year, and have that college moment but were robbed of it. There’s a lot of joy and anticipation for the move.”
As for the meme trade, Tritton would have preferred not to have been “roped into a moment,” but argues that Bed Bath stands out from other stocks caught up in the frenzy, given its genuinely improving fundamentals. “The one positive, both in January and this moment, is that it drew people to the story, and when they dug in they found real strength.”
Write to Teresa Rivas at firstname.lastname@example.org