US retailer Bed Bath & Beyond registers sales of $1,878 million in Q3

"After our previously announced slower start to sales in September and October, we drove a change in trends by November with our comp decline improving, particularly in stores. However, overall sales were pressured despite customer demand due to the lack of availability with replenishment inventory and supply chain stresses that had an estimated $100 million, or mid-single digit, impact on the quarter and an even higher impact in December,” Mark Tritton, Bed Bath & Beyond's president and CEO said.

“Nevertheless, our customer acquisition strategy for the Bed Bath banner is gaining traction as evidenced by our Beyond+ loyalty programme, which grew by nearly half a million members after one of our largest new subscriber quarters. Our buybuy BABY banner continues to deliver double-digit growth and we are on track to achieve approximately $1.3 billion in sales in this first year of transformation - ahead of our investor day goals - all while improving profitability and market share,” explained Tritton.

"In response to a sharp increase in inflation and pervasive freight and supply chain headwinds, we swiftly implemented market-driven pricing, promo optimisation and product mix plans. Our decisive actions led to an adjusted gross margin rate significantly exceeding the plan and above 2020 and 2019 - a key financial barometer of our three-year transformation strategy,” added Tritton.

The company continues to demonstrate strong liquidity with cash, cash equivalents, restricted cash and investments of $0.6 billion in the fiscal 2021 third quarter, and approximately $0.7 billion as of December 25, 2021 reflecting positive operating cash flow for the current quarter-to-date period.

“Our Owned Brands also continued to produce higher merchandise margins at increased penetration rates. We now intend to expand the Owned Brands strategy to BABY in 2022 as we look at margin enhancing strategies, given sales results in this business have stabilised as a result of our targeted efforts to improve this banner. We are identifying exciting new opportunities to drive sales and BABY is an important cornerstone of our plans, including our recently announced collaboration with Kroger and our own digital marketplace," Bed Bath & Beyond said in a press release.

"Just as we delivered on gross margin during the quarter, our holistic focus is on improving our top and bottom line results as we continue to transform. While we continue to target sales improvement, we are also focused on SG&A. We are pursuing additional expense optimisation measures of approximately $100 million annualised that will explore areas such as store fleet optimization, fixed costs and discretionary savings opportunities. Earlier this quarter we also announced that we expect to complete our $1 billion three-year share repurchase plan by the end of fiscal 2021, two years ahead of schedule, which underscores our ongoing confidence in our turnaround and commitment to our capital allocation framework," explained Tritton.

"Having concluded just the third quarter of our multi-year plan, we will continue to execute our strategic transformation by diagnosing and reforming our legacy business to achieve our goals. As we prepare for 2022, we look forward to operating in a normalised environment with a base of business upon which to grow," concluded Tritton.

Fibre2Fashion News Desk (RR)