Jan 07, 2022
Bed Bath & Beyond just got hit right in the supply chain. The retailer’s CEO said the company lost around $100 million in sales during its fiscal third quarter as it failed to get popular products on store shelves due to pandemic-related logistical bottlenecks.
Same-store sales for the company were down seven percent for the three months ending Nov. 27. Bed Bath & Beyond posted a net loss of 25 cents a share.
Mark Tritton, president and CEO, lamented a missed opportunity on yesterday’s earnings call.
“On-shelf availability affected our top 200 items such as kitchen appliances and personal electronics, as well as our key categories such as bed and bath. The customer experience was compromised as strong demand wasn’t met with strong product availability,” he said.
The $100 million in lost sales, Mr. Tritton said, had “a mid-single-digit impact to the quarter and an even higher impact on December.” Sales for December were not included in the third quarter filing but were likely accounted for in the retailer’s decision to lower its forecast for the year.
Bed Bath & Beyond’s supply chain issues were not a surprise to the company’s management, which flagged the challenge on its second quarter earnings call in September.
Mr. Tritton said on that call that the company had “diagnosed the problems” it was facing and “developed strong plans to change our trajectory, recovering by November and delivering a strong holiday is our key focus.”
Not all the news was bad. The retailer’s buybuyBaby business posted double-digit sales growth for the quarter, and plans are underway to expand Bed Bath & Beyond’s owned brand strategy to the chain. Mr. Tritton has called buybuyBaby the cornerstone of the announced collaboration with Kroger that will see the grocer open up space in some of its stores and its website for Bed Bath & Beyond merchandise.
Mr. Tritton pointed to growth in the company’s Beyond+ loyalty program as an indicator of consumer interest. The program, which costs $29 a year, provides members with 20 percent off of every purchase they make along with free standard shipping.
“We grew from 1.8 to 2.2 million members after one of our largest new subscriber events in November leading to one of our most successful membership acquisition quarters of Beyond+ in years,” said Mr. Tritton. “We will leverage this momentum throughout 2022 as we support plans for a new loyalty program later this year.”
DISCUSSION QUESTIONS: Do you think Bed Bath & Beyond has the right plan in place to achieve long term success? What do you see as the most significant challenges facing the business and where are there opportunities for growth?
“Do you think Bed Bath & Beyond has the right plan in place to achieve long term success?”
