Bed Bath & Beyond Q1 Results Miss Estimates

(RTTNews) - Home improvement retailer Bed Bath & Beyond, Inc. (BBBY) reported on Wednesday a net loss for first quarter that sharply widened from last year, hurt by hefty transient costs related to inventory markdown reserves and port-related supply chain fees.

Both adjusted loss per share and net sales missed analysts' expectations. The company also said sequential comparable sales recovery is expected to occur in the second half of fiscal 2022.

The company's stock is plunging about 12 percent in pre-market trading following the announcement of the results.

In a separate press release, the company said Independent Director Sue Gove has been named Interim Chief Executive Officer, replacing Mark Tritton, who will leave his role as President and Chief Executive Officer and as a member of the Board.

The company further announced that it has named Mara Sirhal as Executive Vice President and Chief Merchandising Officer. Sirhal replaces Joe Hartsig, who is leaving the company.

For the first quarter, the New Jersey-based home goods retailer reported a net loss of $357.67 million or $4.49 per share, sharply wider than $50.87 million or $0.48 per share in the prior-year quarter.

Results for the latest quarter include restructuring and costs associated with the company's transformation initiatives.

Excluding items, adjusted net loss for the quarter were $225.43 million or $2.83 per share, compared to adjusted net income of $4.93 million or $0.05 per share in the year-ago quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to report a loss of $1.39 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter declined 25 percent to $1.46 billion from $1.95 billion in the same quarter last year. Analysts expected revenues of $1.51 billion for the quarter.

The decline in net sales was attributable to a comparable sales decline of 23 percent and a two percent negative impact related to fleet optimization activity.

Bed Bath & Beyond banner comparable sales declined 27 percent, reflecting rapid shift in consumer spending patterns and declining demand in Home sector. Comparable sales declined 24 percent in stores and 21 percent in Digital.

Gross margins were negatively impacted by 840 basis points of transient costs, reflecting the impact of an inventory markdown reserve of 620bps and supply chain-related port fees of 220bps.

Looking ahead, the company said sequential comparable sales recovery is expected to occur in the second half of fiscal 2022 compared to the first half of fiscal 2022, driven by inventory optimization plans, including incremental clearance activity.