Bed Bath & Beyond jumps to highest in 18 months on strong sales
Bed Bath & Beyond Inc. shares soared to the highest level since April 2019 after the home-furnishings chain posted a surprise gain in quarterly sales, a sign investors are convinced that turnaround efforts are paying off ahead of the holiday season.
Comparable-store sales, a key metric, rose 6% in the second quarter ended Aug. 29. Analysts had expected a decline of 1.3%, according to Consensus Metrix. Sales continued to increase last month, according to the company.
“We see things are taking hold and those green shoots that developed in the quarter are turning into trends in September,” Chief Executive Officer Mark Tritton said in a phone interview.
Shares rose as much as 30% Thursday and traded up 26% to $18.94 as of 9:57 a.m. in New York. With the jump, the third-biggest on S&P Small Cap 600 Index, Bed Bath & Beyond erased its losses for the year.
Revenue of $2.69 billion also beat the average estimate from analysts, with e-commerce underpinning the improvement and offsetting a decline of in-store sales.
As the critical holiday season approaches, the retailer is adding more services for consumers who may opt to continue shopping online. Earlier this week, it announced the start of same-day shipping and is also focused on getting popular kitchen items to customers quickly, Tritton said. Kitchen and college-related items have sold well, while luggage and travel goods haven’t, he added.
“Going into the holiday season, we think it’s still going to be around the home,” Tritton said. He anticipates that holiday sales will spread throughout the season, which helps avoid shipping strains.
Bed Bath & Beyond continues to pursue a multiyear revamp to shake off years of stagnation and decline. Tritton is cutting costs and changing the chain’s focus to initiatives like curbside and in-store pickup for online orders. An improvement in gross margin, spurred in part by refocusing on more-profitable merchandise and the curbside initiative, indicates that the efforts are gaining steam.
The company said it would share more about its future plans at an investor day at the end of the month.