Bed Bath & Beyond reports 28% drop in sales as it presses ahead with turnaround plan

Bed Bath & Beyond connected Thursday said income plunged by 28% successful the fiscal 2nd quarter, arsenic the location goods retailer struggled to gully customers.

Shares were down astir 3% successful premarket trading.

The institution reiterated its full-year outlook, saying it anticipates comparable income to diminution by astir 20% arsenic its concern improves successful the backmost fractional of the fiscal year.

Here's however the retailer did successful the three-month play ended Aug. 27 compared with what analysts were anticipating, based connected Refinitiv data:

• Loss per share: $3.22 adjusted vs. $1.85 expected
• Revenue: $1.44 cardinal vs. $1.47 cardinal expected

The company's nett nonaccomplishment widened importantly to $366 million, oregon $4.59 per share, from $73 million, oregon 72 cents per share, a twelvemonth earlier. Its nett income dropped from $1.99 cardinal the year-ago period.

Comparable income declined 26% successful the 2nd quarter. The cardinal retail metric, often called same-store sales, is simply a year-over-year examination of online income and income astatine stores that person operated for 12 afloat months pursuing an opening play of astir six to 8 weeks.

The quarterly study does not bespeak the company's latest turnaround plan. In precocious August, it announced plans to shingle up its merchandising strategy, and fortify its namesake stores and babe goods chain, Buybuy Baby. It besides announced cost-cutting measures, including layoffs and closing astir 150 Bed Bath & Beyond stores.

Read more: Here's a representation of Bed Bath & Beyond store closures

Interim CEO Sue Gove said successful a quality merchandise Thursday the institution is fixing inventory problems by speeding up markdowns of immoderate merchandise. She said Bed Bath is "confident that our existent liquidity volition alteration the indispensable changes we are implementing."

Gove said the company's loyalty program, Welcome Rewards, has grown by much than 1.3 cardinal since the extremity of August, bringing it to a full of 6.4 cardinal members since it launched this summer. She said it is lowering costs by astir $250 cardinal for the 2nd fractional of the fiscal year, arsenic it works to ramp up sales.

Bed Bath faces respective important challenges, including mounting debt, vacant enactment roles and tense relationships with vendors. As the institution gears up for the important vacation season, it is led by Gove, an interim CEO, and interim CFO Laura Crossen. Its committee pushed retired erstwhile CEO Mark Tritton successful June, and CFO Gustavo Arnal died by suicide successful aboriginal September.

In precocious August, Bed Bath got immoderate alleviation by securing much than $500 cardinal of caller financing, including a $375 cardinal loan.

Bed Bath's liquidity is $850 cardinal aft repayments and borrowing that took spot earlier the 2nd 4th began, the institution said Thursday.

The coming months volition trial whether the retailer tin get blistery vacation items and fashionable nationalist brands, which are pivotal to its latest strategy. According to erstwhile institution executives, Bed Bath has had strained relationships with suppliers — and could look a repetition of 2 Christmases ago, erstwhile it did not person respective blistery products from well-known nationalist brands.

In a quality release, Gove said moving with Bed Bath's suppliers has "been an important absorption area" and said its indebtedness and liabilities with them "are considerably healthier than successful the anterior quarter."

As of Wednesday's marketplace close, Bed Bath's shares are down astir 56% truthful acold this year. The company's marketplace worth is $516.5 million.

Read the company's net merchandise here.

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