After a challenging second quarter, Bed Bath & Beyond asserted that it will continue to work on reinventing its business and begin generating earnings and sales gains in 2020.
With its recently released second quarter financials including flat net sales, slightly depressed comparable sales and a sharp earnings decline, observers from the financial community have demonstrated concern about how far Bed Bath & Beyond has proceeded in that reinvention.
In a second quarter conference call, Bed Bath & Beyond CEO Steven Temares said the company is investing in and managing the business to transform operations, reestablish earnings growth and drive long-term profitability, recognizing that the actions undertaken may hurt short-term sales and profitability.
“Our transformation is taking root, and the key driver of our ability to succeed is our people,” Temares said. “We have chosen to work on many things at once in order to make it happen quicker. We continue to leverage our existing associate base and augment our talent with specialized new hires in order to effectively execute our long-term strategy. Over the past 18 months, we have bolstered the strength of our existing team with individuals with strong expertise in areas including data analytics, supply chain, customer fulfillment, merchandising, life stages, e-commerce, portfolio management and information technology.”
Temares added, “Among the changes are the introduction of our strategic portfolio management office and a hiring, among others, of chief officers for technology, value optimization, delivery experience, solutions, products and digital operations.”
Temares said that Bed Bath & Beyond would continue to push on key projects, including expansion of decorative furnishings, where the company has added about 42,000 SKUs and boosted assortment by 37% year over year. He added that sales of decorative furnishings in the company’s namesake and buybuy Baby retail banners have advanced 18% in the fiscal year-to-date, and that the company is seeing some promising trends in its in-store decorative furnishings pilot program.
Temares added, “While we are increasing and enhancing our assortment offering, we will now also be refocusing our efforts on creating efficiencies and driving profitability in the category. This includes a comprehensive review of our offering and its performance, elimination of some less profitable SKUs, and decisions based on how the profitability of each SKU is impacted by the relationship among initial price, use of dynamic pricing and availability of couponing and free shipping.”