Bed Bath & Beyond (BBBY)’s fourth quarter 2021 profit

On Wednesday, Bed Bath and Beyond announced an unexpected loss in the festive quarter, as the company’s stocks were low and it was difficult to transport goods from tight ports to shelves.

The company’s shares bounced in form market trading, as investors weighed the news.

CEO Mark Tritton said the sold-out goods caused the company to lose about $ 175 million in sales in the fourth quarter. This is higher than in the previous quarter, when the supply chain’s bottlenecks cost the company around 100 million dollars.

In an interview with CNBC, Tritton said the home improvement store was disappointed with its results. He said that “a strong headwind in the macroeconomic environment” had slowed the company’s turnaround. For example, he said that transporting goods costs more and some of the best-selling items from domestic brands are in short supply because components are missing, such as micro-flakes that go into a vacuum. In addition, he said, the majority of its seasonal goods got stuck in ports and arrived late.

He said some of these challenges have been addressed in the current quarter.

Still, Tritton said, Bed Bath is making progress with its transformation. He said it was investing in technology, welcoming customers with postcards and targeted emails and expanding its more profitable private label business.

Bed Bath has been on an uneven journey, with Target’s elder, Tritton, trying to revive retailers by promoting branded products, refurbishing stores and closing down poorly performing locations. Its share capital has been drawn into meme-stock rallies along with AMC Entertainment and GameStop. It has also been under pressure from investors – including activist Ryan Cohen, chairman of GameStop and founder of Chewy.

The retailer recently signed a contract with Cohen’s company, RC Ventures, by agreeing to add new board members and exploring whether it should turn around or sell its BuyBuy Baby company, which has been one of its bright spots.

Bed Bath on Wednesday did not make a specific forecast, but said it expects sales and margins to improve in the second half of the coming financial year, as supply chain conditions ease.

Here is how the dealer did during the three-month period ending February 26, based on what analysts expected, based on Refinitiv data:

  • Loss per share: 92 cents against expecting 3 cents profit
  • Revenue: $ 2.05 billion compared to the expected $ 2.07 billion

The company’s net loss increased to $ 159 million, or $ 1.79 per share, from net income of $ 9 million, or 8 cents per share, a year earlier. Excluding one-time shares, it lost 92 cents a share. Analysts surveyed by Refinitiv had expected a 3 cents earnings per share.

Sales fell 22% to $ 2.05 billion from $ 2.62 billion the year before. It was below estimates at 2.07 billion dollars.

Sales in the same store, which is a key factor in retail sales, decreased by 12% in Bed Bath’s operations compared to the previous year. Sales in the same store decreased by 15% for the Bed Bath & Beyond banner and increased by a low one number for the BuyBuy Baby banner.

Digital sales decreased by 18% compared to the previous year, which partly reflects the move back to stores and standardized e-commerce.

Tritton said Bed Bath was undergoing a complete overhaul of its supply chain so it could better manage all of its merchandise when importing goods and transporting them to distribution centers and stores. He said that technology, which acts as a “virtual control tower”, will be launched at the end of this month. These efforts have already begun, but have become more urgent, he said.

“The timing of this pressure and the timing of the end of the program is the starting point,” he said.

In parallel with its reversal efforts, Bed Bath will have to compete for buyers’ dollars as inflation is around four decades high. Consumers are also weighing in on other spending priorities, such as summer vacations and spring wardrobes, that could direct their attention away from home.

Tritton said the background was more difficult for the retailer, especially since households no longer have extra dollars from the government such as the child tax deduction. It is “reducing the overall demand for several categories, including domestic,” he said.

“We believe that it is an evergreen, strong domestic market that has had irregular ups and downs and when it returns to normal, we believe it is a great business to take place,” he said. “We are part of customers’ lives and their wishes and needs, and ensuring that we are in stock and service when needed is our key task.”

By the end of the third day, Bed Bath’s shares have risen by 23% so far this year. Stocks closed at $ 17.97 on Tuesday, decreased by 6.75%, bringing its market value to 1.73 billion dollars.

Read the company’s earnings announcement here.

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