Bed Bath & Beyond
Bed Bath & Beyond's earnings report was undoubtedly noteworthy, given the bigger-than-expected losses the company experienced in Q1. Looking at the report, the company reported a 49% loss in total net sales, plummeting to $1.3 billion from $2.5 billion since last year. Losses per share decreased by 16%, sliding from $2.91 in 2019 to $2.44 in 2020. The adjusted loss ended up being $1.96 per share. While the slight recovery in loss per share is worth note, analysts had far greater expectations for the company, predicting losses to shrink to $1.27 per share.
The report caused a significant drop in confidence among investors, something reflected in the company's considerable slip in share price. Bed Bath and Beyond was at $10.41 by the end of trading but began slipping during after-market trading, dropping 10.7% overnight, starting Thursday's trading at $9.30. At the time of writing, the company's shares have slid even further, ending up an additional 15% down at $7.87 by 1:30 in the afternoon.
Bed Bath and Beyond is moving to compensate for the losses by closing some 200 stores across the country, according to the report. During an earnings call on Wednesday, CEO Mark Tritton said that he expected the move to save the company between $250 and $350 million a year.
Tritton is optimistic for Bed Bath and Beyond despite the dismal first quarter. "We believe Bed Bath & Beyond will emerge from this crisis even stronger, given the strength of our brand, our people and our balance sheet," Tritton said.
Despite the considerably painful quarter, the company's future doesn't appear as bleak as one might expect. In Bed Bath and Beyond's favor is the rise in online sales during the pandemic; the company saw a 100% spike in April and May as consumers stocked up on cleaning supplies. The company also reported that customers were returning to stores in higher volumes than expected, which should help shore up some of the losses incurred during the lockdown months.
Another point of confidence in the retailer is CEO Mark Tritton, a veteran of Target
Tritton's shakeup upon taking control, in which he cleared much of the c suite at the company, may also prove beneficial. The executives dismissed from the company had presided over at a decade of decline, and such a poor performance isn't likely to assuage investors at a critical time when confidence in the company is key. The new executives appointed by Tritton over the last year have a great deal of experience between them, which will come in handy as the company looks to recover from the pandemic.
- https://bedbathandbeyond.gcs-web.com/news-releases/news-release-details/bed-bath-beyond-inc-reports-results-fiscal-2020-first-quarter
- https://www.marketwatch.com/story/bed-bath-beyond-to-close-200-stores-stock-falls-on-wider-than-expected-loss-2020-07-08
- https://www.cnbc.com/2020/07/08/bed-bath-beyond-bbby-reports-q1-2020-loss-200-store-closures.html
- https://www.usatoday.com/story/money/2020/07/08/bed-bath-beyond-store-closures-coronavirus-impact/5401627002/
- https://www.pws.io/mark-tritton-a-resurgence-in-the-making-for-bed-bath-beyond