The company said the store closures could help generate annual cost savings ranging from $250 million to $350 million, excluding related one-time costs.
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- Bed Bath & Beyond loses foot traffic to its stores, a key element in its decision to shutter 200 of its stores
- On the other hand, it reported more than 100% jump in online sales in April and May
- For fiscal Q1, Bed Bath reported an almost 50% plunge in sales to $1.31 billion from $2.57 billion year-on-year
A more than 100% jump in online sales failed to prevent retail chain Bed Bath & Beyond from announcing the closure of 200 of its namesake stores over the next two years, starting the fourth quarter. Sales plummeted almost 50% to $1.31 billion from $2.57 billion year-on-year in the fiscal first quarter ending May 30.
The company operates 995 namesake stores in the United States. In addition, Bed Bath & Beyond runs 280 Cost Plus World Markets stores, 100 Buybuy Baby stores, 80 Christmas Tree Shops and related brands and more than 50 Harmon Face Values stores. Bed Bath was forced to temporarily shutter almost all its stores to help curb the spread of COVID-19 among its customers, staff and suppliers.
“The impact of the Covid-19 situation was felt across our business during our fiscal first quarter, including loss of sales due to temporary store closures,” CEO Mark Tritton told CNBC.
Bed Bath said the namesake store closures should help generate annual cost savings ranging from $250 million to $350 million, excluding related one-time costs.
“We saw there were a number of stores dragging us down,” said Tritton. “We will continue to look at the rest of our concept doors, now that we have established the data criteria.”
Tritton said the good news was that as the stores reopen, many are performing ahead of internal expectations. He noted consumers have shifted from amassing cleaning supplies and water filters to fight off the coronavirus, to big-ticket items like home decor, bedding and gardening accessories.
“Home is now everything,” said Tritton. “It’s the epicenter.”
This trend, abetted by online shopping, should help boost company profit margins. Online sales jumped 82% in fiscal Q1, with increases of more than 100% during April and May. It represented two-thirds of the company’s first quarter sales.
The online sales boost leads Bed Bath to believe it’s in a strong financial position to get through the terrific economic slowdown spawned by the COVID-19 pandemic. Bed Bath closed its fiscal Q1 with $1.2 billion in cash and investments.
Other key operating results reported by Bed Bath:
* $1.31 billion in revenues
* A net loss of $302.29 million ($2.44 per share) from $371.09 million, ($2.91 a share) year-on-year
* A loss of $1.96 per share, excluding one-time items
Bed Bath & Beyond store in Massachusetts Photo: Bed Bath & Beyond