Bed Bath & Beyond Q2 Earnings Decline, Advances Multichannel Strategy

For the 2015 fiscal second quarter ended August 29, Bed Bath & Beyond posted net earnings of $201.7 million, or $1.21 per diluted share, versus $224 million, or $1.17 per diluted share, in the year-earlier period. Comparable sales in the second quarter increased by 0.7%, as net sales gained 1.7% to $3 billion.

The company’s diluted earnings per share matched a Zacks Investment Research analyst average estimate.

On a constant currency basis, Bed Bath & Beyond said, net sales increased by 2.2% and comps increased by 1.1% compared with last year’s second quarter.

Transaction amount gained in the quarter but number of transactions slipped slightly, the company noted in a conference call.

In the conference call, Steven Temares, Bed Bath & Beyond CEO, noted that the company continues to invest in technology and support for its online operations in advancement of an established multichannel strategy.

Temares said that online and mobile comps, considered together, gained more than 25% in the second quarter year over year while store comps declined by about 1%. He noted that the company has been able to expand its product assortment through its online operations including, in one example, baby furniture, which is available on the buybuy Baby and Bed Bath & Beyond websites. At the same time, the company is shifting its marketing efforts in favor of Internet campaigns.

The company opened six stores in the second quarter, two Bed Bath & Beyonds, three buybuy Babys and a Cost Plus World Market. The Cost Plus is a reduced sized, 5,000 square foot store now operating in Manhattan. Other initiatives, Temares said, included the purchase of Of a Kind, which gives Bed Bath & Beyond an Internet-based operation that introduces products developed by up and coming designers, and the opening of a store in Cuernavaca, Mexico, the first the company is operating outside the Mexico City market.

As of August 29, Bed Bath & Beyond operated a total of 1,520 stores, including 1,023 namesake stores in all 50 of the United States, the District of Columbia, Puerto Rico and Canada, 270 stores under the names of World Market, Cost Plus World Market or Cost Plus, 99 buybuy Baby stores, 78 stores under the names Christmas Tree Shops, Christmas Tree Shops andThat! or andThat!, and 50 stores under the names Harmon or Harmon Face Values.