Mattress Bathtub & Past experiences a 28% drop in gross sales because it presses forward with its turnaround plan

James G. Cole

Bed Bath & Beyond on Thursday stated gross sales plunged by 28% within the fiscal second quarter, as the house items retailer struggled to attract prospects.

Right here’s how the retailer did within the three-month interval ended Aug. 27 in contrast with what analysts had been anticipating, primarily based on Refinitiv information:

  • Loss per share: $3.22 adjusted vs. $1.85 anticipated
  • Income: $1.44 billion vs. $1.47 billion anticipated

The corporate’s web loss widened considerably to $366 million, or $4.59 per share, from $73 million, or 72 cents per share, a yr earlier. Its web gross sales dropped from $1.99 billion within the year-ago interval.

The quarterly report doesn’t replicate the company’s latest turnaround plan. In late August, it introduced plans to shake up its merchandising technique, and strengthen its namesake shops and child items chain, BuyBuy Child. It additionally introduced cost-cutting measures, together with layoffs and shutting about 150 Mattress Bathtub & Past shops.

Interim CEO Sue Gove stated in a information launch Thursday that the corporate’s quarterly outcomes don’t replicate the progress it has made in current weeks. As an illustration, she stated the corporate is fixing stock issues by dashing up markdowns of some merchandise. She stated Mattress Bathtub is “assured that our present liquidity will allow the mandatory adjustments we’re implementing.”

Gove stated the corporate’s loyalty program, Welcome Rewards, has grown by greater than 1.3 million for the reason that finish of August, bringing it to a complete of 6.4 million members because it launched this summer time. She stated it’s reducing prices by about $250 million for the second half of the fiscal yr, as it really works to ramp up gross sales.

Mattress Bathtub faces a number of important challenges, together with mounting debt, vacant management roles and tense relationships with distributors. As the corporate gears up for the essential vacation season, it’s led by Gove, an interim CEO, and interim CFO Laura Crossen. Its board pushed out former CEO Mark Tritton in June, and CFO Gustavo Arnal died by suicide in early September.

In late August, Mattress Bathtub bought some aid by securing more than $500 million of new financing, together with a $375 million mortgage.

The approaching months will take a look at whether or not the retailer can get sizzling vacation objects and standard nationwide manufacturers, that are pivotal to its newest technique. Based on former firm executives, Bed Bath has had strained relationships with suppliers — and will face a repeat of two Christmases in the past, when it didn’t have a number of sizzling merchandise from well-known nationwide manufacturers.

In a information launch, Gove stated working with Mattress Bathtub’s suppliers has “been an vital focus space” and stated its debt and liabilities with them “are significantly more healthy than within the prior quarter.”

As of Wednesday’s market shut, Mattress Bathtub’s shares are down about 56% to this point this yr. The corporate’s market worth is $516.5 million.

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