Bed Bath & Beyond turned a profit in the second quarter while making comparable store sales gains buoyed by a significant digital comp increase.
Net earnings were $217.9 million or $1.75 per diluted share versus a net loss of $138.8 million, or $1.12 per diluted share, in the year-earlier period. Earnings included $156 million from special items including gains on the sale of PersonalizationMall.com and on the extinguishment of debt, partially offset by unfavorable impacts from special items including non-cash charges related to impairments of trade names, and certain store-level assets, as well as restructuring and transformation initiative costs.
With special items from both the 2019 and 2020 second quarters excluded, Bed Bath & Beyond reported adjusted net earnings of $62.3 million, or 50 cents per diluted share, versus $41.9 million, or 34 cents per diluted share, in the period a year prior.
In a marketplace roiled by the COVID-19 pandemic, comparable sales advanced 6% versus the year-previous quarter, with digital channels up 89% and stores down 12%.
Bed Bath & Beyond posted net sales of $2.69 billion, down 1% from the period a year before, partially due to the divestiture of One Kings Lane. Net sales from digital channels increased by 88% while net sales from stores declined by 18% in the quarter year over year. Operating profit was $270.5 million versus an operating loss of $182.3 million in the period a year past.
Mark Tritton, Bed Bath & Beyond’s president and CEO, said, “Our growth strategy is unlocking improved financial performance, and the marked improvement in our second quarter financial results reflects the potential of our digital-first, omni-always transformation, and our efforts to build a modern, durable platform for success. We’ve taken direct action to stabilize our business, including reducing our cost structure, enhancing our financial flexibility and investing where it matters most to our customers. At the same time, we have assembled a world-class and experienced leadership team to rebuild our authority in home and modernize our operations to deliver a truly customer-inspired and omni-always shopping experience.”
He added, “During this unprecedented time when our homes have become the center of our lives, our company continues to respond with agility to the changing needs of our customers. We are delighted by the continued strong response to our BOPIS and contactless curbside pickup service offerings, and we believe the recent launch of our new same day delivery service will make it even easier to shop with us as we help families across North America unlock the magic of holidays at home.”