Bed Bath & Beyond: Is the Turnaround Real?
Three months ago, Bed Bath & Beyond (NASDAQ: BBBY) reported its first quarterly increase in comparable store sales since fiscal 2016. Last week, the retail conglomerate announced that comp sales grew again in the third quarter of its 2020 fiscal year. It also reported a sizable increase in gross margin, leading to year-over-year improvement in its adjusted earnings.
New Bed Bath & Beyond CEO Mark Tritton and his team are presenting these achievements as clear signs that the turnaround plan they introduced last year is already paying off. Reality is a little more complicated, though. In some respects, the company is clearly on the right track. However, its ability to keep sales stable or growing in the years ahead remains uncertain.
Bed Bath & Beyond's comparable sales rose 2% year over year last quarter. Digital comparable sales surged 77%, more than offsetting a 15% decline in store-based comp sales. That said, comp sales growth slowed from the previous quarter's 6% pace, as the latest wave of the COVID-19 pandemic pinched store traffic, particularly late in the quarter. Furthermore, total sales fell 5% year over year to $2.6 billion, reflecting store closures and the sale of various non-core parts of the business.
Source Fool.com
