UNION, N.J., Feb. 11, 2020 /PRNewswire/ -- Bed Bath &
Beyond Inc. (Nasdaq: BBBY) today reported preliminary, unaudited
financial performance data for the first two months of the fiscal
2019 fourth quarter (December 2019
and January 2020), including a 5.4%
decline in comparable sales driven primarily by store traffic
declines combined with inventory management issues, and increased
promotional activity and markdowns. The Company is providing
this update today to provide visibility into the current pressures
on the business, which the Company's new management has been
reviewing to ascertain insights and key learnings.
Mark J. Tritton, President and
CEO of Bed Bath & Beyond, said, "We are experiencing short-term
pain in our efforts to stabilize the business, including the
pressures of store traffic trends coupled with our own executional
challenges. However, we did achieve a notable positive shift
in sales in our digital channels during this period, with growth of
approximately 20%. I believe we can solidify this growth,
while also addressing the broader stabilization of our
business."
Tritton added, "We are beginning to make bold and broad-based
changes to modernize our business and better serve our
customers. Our ability to achieve this and change the
trajectory of our current results will take time, as we remaster
the fundamentals of merchandising, pricing and promotion, and focus
on our digital channels as part of our go-forward
strategy."
Fiscal December 2019/January 2020
Comparable Sales
For the first two months of the fiscal 2019 fourth quarter
(December 2019 and January 2020), the Company's comparable sales
declined 5.4%, reflecting a low-double-digit percentage decrease in
transactions in stores, partially offset by a mid-single-digit
percentage increase in the average transaction amount. On a
directional basis, comparable sales from stores declined nearly
11%, while comparable sales from digital channels grew
approximately 20%.
Comparable sales include the shift of the Cyber Monday holiday
week, which is in the Company's fiscal fourth quarter this year
versus the fiscal third quarter of last year. Adjusting for
the calendar shift to exclude Cyber Monday week in both periods,
comparable sales for the first two months of the fiscal 2019 fourth
quarter declined 13%.
Product availability leading into the holiday period was also a
contributing factor, as inventory within certain key categories in
the Bed Bath & Beyond assortment was too low or out-of-stock
during the period. The Company is immediately reforming its
internal planning and inventory management procedures to master the
fundamentals.
Fiscal December 2019/January 2020
Gross Margin
The Company's gross margin during the first two months of the
fiscal 2019 fourth quarter declined around 300 basis points
primarily due to an unfavorable impact on merchandise margin from
promotional activity during the period. In addition, the
Company experienced an increased penetration of digital sales
within its mix of total sales during the period which unfavorably
impacted gross margin.
Fiscal December 2019/January 2020
Selling, General & Administrative Expenses (SG&A)
During the first two months of the fiscal 2019 fourth quarter, the
Company's SG&A as a percentage of net sales increased
approximately 390 basis points, which included approximately 200
basis points related to the impact of the sale-leaseback
transaction ($(32.5) million)
announced in January, and severance expense ($10.7 million) associated with the extensive
leadership changes announced in December 2019.
Excluding those two non-routine items, adjusted SG&A as a
percentage of net sales increased approximately 190 basis points
primarily due to the effect of fixed costs, such as occupancy and
technology-related expenses, including depreciation, on a lower
sales base. Additionally, higher advertising expense related
to promotional activity, and higher consulting expense associated
with efforts to expedite the Company's ongoing transformation
initiatives and its review of assets, contributed to the increase
as a percentage of net sales.
Tritton concluded, "As we take steps to position Bed Bath &
Beyond to deliver long-term sustainable growth, we are fast
tracking our efforts to rebalance our portfolio, reset our cost
structure, and enhance our leadership and talent."
The financial results presented in this press release are, or
are based on, unaudited, interim results. The Company's actual
financial results for the full fiscal 2019 fourth quarter and full
fiscal year ending February 29, 2020
may vary from the interim results included herein, subject to
completion of the period, finalization of normal quarter-end and
year-end accounting procedures, such as the review of and
adjustment to inventory reserve estimates and sales returns and the
completion of a physical inventory in stores, which could have a
material impact positively or negatively on the Company's actual
results, and the audit of its fiscal 2019 financial
statements.
Fiscal 2019 Fourth Quarter Earnings Date
Bed Bath & Beyond Inc. will report its fiscal 2019 fourth
quarter and full-year results after the market close on
Wednesday, April 15,
2020.
About the Company
Bed Bath & Beyond Inc. and subsidiaries (the "Company") is
an omnichannel retailer that is the trusted expert for the home and
heart-felt life events. The Company sells a wide assortment of
domestics merchandise and home furnishings. The Company also
provides a variety of textile products, amenities and other goods
to institutional customers in the hospitality, cruise line,
healthcare and other industries. Additionally, the Company is a
partner in a joint venture which operates retail stores in
Mexico under the name Bed Bath
& Beyond.
Non-GAAP Information
This press release contains certain non-GAAP information,
including adjusted selling, general & administrative expenses,
which is intended to provide visibility into the Company's core
operations by excluding the effects of the loss related to the
sale-leaseback transaction and severance costs. The Company's
definition and calculation of non-GAAP measures may differ from
that of other companies. Non-GAAP financial measures should
be viewed in addition to, and not as an alternative for, the
Company's reported GAAP financial results.
Forward-Looking Statements
This press release contains forward-looking statements,
including, but not limited to, the Company's progress and
anticipated progress towards its long-term objectives. Many
of these forward-looking statements can be identified by use of
words such as may, will, expect, anticipate, approximate, estimate,
assume, continue, model, project, plan, goal, and similar words and
phrases, although the absence of those words does not necessarily
mean that statements are not forward-looking. The
Company's financial results presented in this press release are
subject to completion of the fiscal fourth quarter, finalization of
its normal quarter-end and year-end accounting procedures, and the
audit of its fiscal 2019 financial statements. Further,
actual results and future financial condition may differ materially
from those expressed or either expressly or impliedly referenced in
any forward-looking statements as a result of many factors. Such
factors include, without limitation: general economic conditions
including the housing market, a challenging overall macroeconomic
environment and related changes in the retailing environment;
consumer preferences, spending habits and adoption of new
technologies; demographics and other macroeconomic factors that may
impact the level of spending for the types of merchandise sold by
the Company; civil disturbances and terrorist acts; unusual weather
patterns and natural disasters; competition from existing and
potential competitors across all channels; pricing pressures;
liquidity; the ability to achieve anticipated cost savings, and to
not exceed anticipated costs, associated with organizational
changes and investments; the ability to attract and retain
qualified employees in all areas of the organization; the cost of
labor, merchandise and other costs and expenses; potential supply
chain disruption due to trade restrictions, political instability,
labor disturbances, product recalls, financial or operational
instability of suppliers or carriers, and other items; the ability
to find suitable locations at acceptable occupancy costs and other
terms to support the Company's plans for new stores; the ability to
establish and profitably maintain the appropriate mix of digital
and physical presence in the markets it serves; the ability to
assess and implement technologies in support of the Company's
development of its omnichannel capabilities; uncertainty in
financial markets; volatility in the price of the Company's common
stock and its effect, and the effect of other factors, on the
Company's capital allocation strategy; risks associated with the
ability to achieve a successful outcome for its business concepts
and to otherwise achieve its business strategies; the impact of
intangible asset and other impairments; disruptions to the
Company's information technology systems including but not limited
to security breaches of systems protecting consumer and employee
information or other types of cybercrimes or cybersecurity attacks;
reputational risk arising from challenges to the Company's or a
third party product or service supplier's compliance with various
laws, regulations or standards, including those related to labor,
health, safety, privacy or the environment; reputational risk
arising from third-party merchandise or service vendor performance
in direct home delivery or assembly of product for customers;
changes to statutory, regulatory and legal requirements, including
without limitation proposed changes affecting international trade;
changes to, or new, tax laws or interpretation of existing tax
laws; new, or developments in existing, litigation, claims or
assessments; changes to, or new, accounting standards; and foreign
currency exchange rate fluctuations. The Company does not undertake
any obligation to update its forward-looking statements.
View original
content:http://www.prnewswire.com/news-releases/bed-bath--beyond-inc-provides-update-on-fourth-quarter-financial-performance-301003208.html
SOURCE Bed Bath & Beyond Inc.