By most measures it has been an extraordinary year for Bed Bath & Beyond, as the operator of more than 1,000 stores and a half dozen branded websites scrambled early on to adapt to COVID stores closures, then hustled to adapt to changing consumer habits that skewed toward digital.
According to CEO Mark Tritton, the company’s fast-paced transformation over the past 12 months forged a stronger, more focused business that just closed the books on its third consecutive quarter of comparable sales growth, led by a 99 percent jump in digital sales at its flagship brand.
“We are excited to start fresh in 2021 with our sharpened size and scale, a healthier portfolio of core banners and a stronger financial position to execute the first phase of our 3-year transformation journey,” Tritton told investors on the company’s Wednesday (April 14) earnings call. “As our transformation continues to take hold, we will show up differently for our customers with enhanced omnichannel experiences and modern stores, new communications and differentiated owned-brands that will elevate the shopping experience and make it even easier to shop.”
What Tritton didn’t mention, however, was that his company’s stock has delivered a six-fold increase over the same period of time — rising from $5 to almost $30 per share — in a move that has left the home furnishing retailer with very little wiggle room in the eyes of demanding investors.
Officially, Bed Bath & Beyond earned $9.1 million for the December-January-February quarter, with total revenues down 16 percent from a year ago to $2.6 billion, with group-wide same-store sales rising 4 percent, and flagship brand comp sales rising 6 percent.
Furthermore, the company said its top five categories — which account for two-thirds of its Q4 sales — delivered 12 percent comp sales growth amid continued strong demand for household and nesting-related merchandise such as bedding, bath, kitchen and food prep, indoor décor and home organization.
“The home organization category grew 17 percent in the fourth quarter as customers were focused on cleaning out closets and getting more organized,” CMO Joe Hartsig said on the call. “We’ve leaned into this trend with a new and exciting storage and organization shop in the front of our store and online,” he added, noting demand for juicers and blenders helped drive sales in its wellness category.
In addition, the company also touted the fact that it launched eight owned or private label brands this year consisting of more than 1,000 branded products that are only available for purchases in its stores, such as its new Nestwell bedding line.
“The introduction of our owned brands is the biggest change of Bed Bath & Beyond’s product assortment in a generation and it’s critically important for us to drive growth, build differentiation and customer preference in the marketplace,” Hartsig said.
Chief Operating Officer and Buy Buy Baby division President John Hartman told investors the company’s digital effort will continue to be at the forefront of its transformation.
“In 2020, [Buy Buy Baby] gained 2.5 million U.S. online customers, an increase of 45 percent versus the prior year, including more than 600,000 in the fourth quarter alone, and nearly two thirds of those customers shopped only online,” Hartman said on the call, adding that the $1 billion revenue unit added 150,000 mobile app downloads in the quarter representing more than 6o percent of total digital sales.
“We are excited to begin the transformation of the Baby banner this year, and unlock the value of this brand,” Hartman said.
Going forward, the company kept its existing sales growth forecast intact and expected to deliver sales between $8.0 billion and $8.2 billion for fiscal 2021.
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