Bed Bath & Beyond suffered a rough third quarter, with earnings dipping into the red, but in his first conference call as the company’s CEO, Mark Tritton provided his view of how the company would turn things around, including an expansion of in-store pickup and the launch of a new vendor collaboration program.
At the conference call’s start, he expressed his disappointment with the third quarter results that included a net loss of $38.6 million, as well as an 8.3% comp decrease year over year.
“Let me be clear these results are unsatisfactory and underscore the imperative to change and strengthen our sense of priorities and purpose,” he said. “We must respond to the challenges we face as a business, including pressured sales and profitability, and reconstruct a modern, durable model for long-term profitable growth.”
Going forward, the company will execute against five initiatives:
- Refine and amplify the omnichannel assortment to help rebuild authority and preference for Bed Bath & Beyond among consumers, and generate enthusiasm through differentiation and curation.
- Invest in and clarify compelling value by providing more opening price point choices, relevant owned brands and clear price communications to sharpen the value-for-quality proposition as part of the company’s efforts to acquire and win back customers.
- Clarify and deepen the relationship with Bed Bath & Beyond shoppers by connecting with, engaging and motivating them to strengthen loyalty and lifetime value.
- Become a true omnichannel retailer always ready to serve customers based on their shopping preferences.
- Create and sustain a talent engine and culture that attracts, retains and develops high performance teams who consistently deliver operational excellence and positive business results.
Tritton said the company would detail how it plans to address the initiatives in the upcoming weeks. He did point out that Bed Bath & Beyond has strengths that are a solid foundation for rebuilding the business, including motivated employees. He cited NPD consumer tracking data identifying Bed Bath & Beyond as number one in retail brand awareness across the housewares and home goods category and a leading contender in bedding and bath. He added that 79% of customers express a favorable impression of the brand and 75% want to buy from the top categories it stocks, identified as home, textiles and housewares.
Tritton also pointed out that, despite poor third quarter results, the five-day shopping period from Thanksgiving to Cyber Monday was positive, and the company earlier pointed to a 7.1% comparable sales gain for both 2019 and 2018 on a shifted basis that adjusts for calendar shifts.
The company still has work to do, he conceded. Challenges include the lack of clarity around purpose and value, and a softer connection with the Gen Z and Millennial customer. He also noted that, in a sector where 80% of traffic is influenced by the digital touch point, Bed Bath & Beyond needs to drastically improve its online platform.
To meet the digital challenge, Tritton said Bed Bath & Beyond would bolster its strongly performing reserve online pickup in store offering to a full buy online pickup in-store during the first half of fiscal 2020.
The company has also entered into a partnership with The NPD Group to assess its extensive retail market data and customized reporting and other data driven services, which will aid management in more clearly reviewing pricing, share and white space opportunities. The retailer plans to work with NPD to roll out a vendor collaboration program to further refine assortments and strategies, he said, by looking at data with suppliers to boost understanding of Bed Bath & Beyond customers and their needs in a more symbiotic way. He asserted that such collaboration was a hallmark of how he’s operated in the past.