In what it characterized as a challenging retail environment, Bed Bath & Beyond came up short in the second quarter, with net earnings down after a slight drop in comps and net sales.
The retailer posted second quarter net earnings of $167.3 million, or $1.11 per diluted share, versus $201.7 million, or $1.21 per diluted share, for the previous 2015 quarter. A MarketBeat analyst average estimate called for earnings per diluted share of $1.16.
Comparable sales decreased by 1.2% from the second quarter a year earlier. Comps from customer-facing digital channels grew in excess of 20%, the company reported, while comps from stores declined in the low single-digit percentage range versus the year-previous quarter. Net sales for the second quarter were $3 billion, down 0.2% from the year-prior period.
In a conference call, Sue Lattmann, Bed Bath & Beyond CFO, said that the comp decline resulted from a decrease in the number of transactions partially offset by an increase in the average transaction amount.
In the conference call, Steve Temares, Bed Bath & Beyond’s CEO, said the current retail environment, as it transitions from a store-based to an omnichannel marketplace, is putting “downward pressures” on operating results. He added, though, that with investments including the acquisition of One Kings Lane, the company is positioning itself to succeed in the new and evolving retail landscape.
Temares maintained that the company would continue investing to establish itself as a home expert that can act as a resource throughout the consumer’s life as domestic circumstances change. Bed Bath & Beyond is emphasizing advice and dedicated assortments to help shoppers engaged in activities such as home improvement and preparing for college dorm living. The new college-oriented push included the publishing of a catalog, an initiative the company plans to repeat in the third quarter, Temares said, with a publication dubbed “Welcome Home” that showcases the depth of the retailer’s assortment at a time when it is expanding what have been non-core product categories such as furniture.
Bed Bath & Beyond also is expanding its range of exclusive brands, which now include Wamsutta, Olivia and Oliver, and ED by Ellen DeGeneres at its namesake stores, as well as Wamsutta Baby and Jonathan Adler crafted by Fisher Price at buybuy Baby and the One Kings Lane collection, all to better differentiate itself from the competition, Temares noted.
Bed Bath & Beyond operates 1,539 stores, including 1,024 Bed Bath & Beyond stores in all 50 states, 278 stores under World Market, Cost Plus World Market or Cost Plus, 107 buybuy Baby stores, 79 stores under Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 51 stores under the names Harmon or Harmon Face Values.