Following its recent acquisition of One Kings Lane, a home decor and e-commerce resource, Bed Bath & Beyond reported a relatively soft first quarter, with flat sales and a decline in net earnings.
For the first quarter of fiscal 2016 ended May 28, Bed Bath & Beyond reported net earnings of $122.6 million, or 80 cents per diluted share, compared with $158.5 million, or 93 cents per diluted share, for the year-earlier period.
Earnings per diluted share fell short of an analyst average estimate published by MarketBeat by six cents.
Comparable sales decreased by 0.5%, while comps from customer-facing digital channels grew in excess of 20% and those from stores declined in the low single-digit percentage range versus the first quarter of fiscal 2015. Net sales in the quarter were approximately flat year over year at $2.74 billion.
First quarter results do not include contributions from the One Kings Lane online retail operation, which Bed Bath & Beyond purchased after the period ended.
In a conference call, CEO Steven Temares said Bed Bath & Beyond has been updating its online and mobile capabilities, and leveraging its enhanced marketing analytics to optimize lifestyle-based initiatives including in direct mail. The company also launched an exclusive Ellen DeGeneres bedding line in the quarter. In addition, the company also opened a new andThat! store in Kennesaw, GA.
He noted that the company’s planned Liberty View store, which will integrate the company’s four main banners, Bed Bath & Beyond, Harmon, Cost Plus World Market and buybuy Baby, and its online operation in one format, would now occur in the early fall.
Temares added that the purchase of One Kings Lane provides Bed Bath & Beyond with new home furnishings and design resources.
According to the company, the shift of Memorial Day to the second quarter this year from the first quarter last year hit results, as did changes in advertising and an increase in SG&A related to payroll and technology investment. The company also incurred costs related to a new distribution center.
Temares added that, despite some deceleration, Bed Bath & Beyond’s financial results remain among the strongest in retail and that the initiatives the company has launched will strengthen its position in the marketplace.
The company operates 1,533 stores across its retail banners.