Bed Bath & Beyond has reported mixed second quarter results, including the closure of 60 stores, asserting that its turnaround initiatives have improved its financial condition. However, questions remain over when the retailer will select its new CEO and if any significant assets will be divested.
For the second quarter, Bed Bath & Beyond posted a net loss of $138.8 million, or $1.12 per diluted share, versus net earnings of $48.6 million, or 36 cents per diluted share, in the year-prior period.
Earnings per share in the quarter included $1.46 per diluted share of charges related to the first wave of initiatives management has undertaken to update the business including severance costs associated with the corporate workforce reduction, a decision to outsource certain functions and an inventory write down, in addition to non-cash store impairment. With one-time charges excluded, adjusted earnings were $41.9 million, or 34 cents per diluted share, versus $52 million, or 38 cents per diluted share, in the year-before quarter.
Adjusted earnings per diluted share topped a MarketBeat published analyst consensus estimate of 29 cents.
Comparable sales declined 6.7% from last year’s quarter. Net sales slipped 7.3% to $2.72 billion in the period year over year. Operating loss was $182.3 million versus an operating profit of $78.9 million in the year-earlier quarter.
As part of a conference call, interim CEO Mary Winston said that Bed Bath & Beyond is in the process of implementing a “rapid refresh” of 160 top volume, high profit stores. The company is using technology to create a more personalized consumer proposition, reduce inventory and boost profitability. It will expand private label assortments, close 60 stores and significantly reduce inventory including through markdowns and clearance events in the holiday season, she said.
Winston said, “We are making good progress against our four key near-term priorities, including: stabilizing sales and driving top-line growth; resetting the cost structure; reviewing and optimizing the company’s asset base, including the portfolio of retail banners; and refining our organization structure. Our second quarter financial results reflect the relentless effort of our teams and our progress in driving the company’s transformation efforts to delight our customers, enhance our competitive position, improve our financial performance and drive shareholder value.”
The company added that it has made “substantial progress” toward identifying a permanent CEO. The company said it remains on track with its expectation that it will make an announcement soon.