Bed Bath & Beyond’s Comparable Sales Grow as Online Shopping Surges

It was a summer of shopping for the home, from the home.

Bed Bath & Beyond Inc.

BBBY 28.84%

posted its first comparable-sales growth since 2016 in the latest quarter, with the company’s digital sales surging 89% as people shopped for home goods online during the coronavirus pandemic.

Comparable in-store sales retreated in the company’s fiscal second quarter compared with last year, dipping by roughly 12%. But customers converged on the Union, N.J.-based retailer’s curbside and in-store pickup options, helping drive the acceleration of its internet sales. Companywide comparable sales grew 6%, Bed Bath & Beyond said.

Shares climbed roughly 26% to $18.91 Thursday morning. Through Wednesday, the stock had been down about 13% year to date.

Companies that sell home goods and home-improvement products went on a tear over the summer as people who were spending more time in their houses during the coronavirus pandemic shopped with a focus on the home.

Home Depot Inc.

achieved revenue growth of 23% in the May-to-July period, while

Walmart Inc.

posted e-commerce sales growth of 97% in the quarter that ended in July.

Overall, Bed Bath & Beyond’s second-quarter revenue ticked down to $2.69 billion, from $2.72 billion in the year-ago period. The company posted an adjusted profit of 50 cents a share, beating the FactSet analyst consensus forecast for a loss of 30 cents a share.

The retailer’s summertime success included strong sales of products aimed at the off-to-college set. Despite the prospect of disruptions to on-campus learning during the pandemic, back-to-college sales grew by 21% from May to September as the company leaned into promotions and marketing efforts to draw in students and their families.

More than 500,000 people signed up for a discount pass pitched to college students, driving more than 400,000 transactions, Cindy Davis, the company’s chief brand officer, told analysts on a call Thursday morning. She added that the company believes back-to-college shopping may extend later into the year than usual as some students face a delayed start due to the pandemic.

Overall, digital sales represented about 32% of Bed Bath & Beyond’s total sales by the end of the quarter, Chief Executive Mark Tritton said. In-store and curbside pickup options now make up over 15% of digital sales, he said. Including ship-from-store capabilities, stores fulfilled about 36% of the companies’ digital orders in the second quarter.

A growing share of store-pickup transactions in the company’s digital sales mix is favorable, Mr. Tritton said, because those transactions have a profit margin that is similar to traditional in-store sales.

Analysts and economists are paying close attention to monthly retail sales numbers as a way to gauge how the economy may be recovering from the impact of the coronavirus pandemic. Photo: Kathy Willens/Associated Press (Originally published June 16, 2020)

Write to Matt Grossman at [email protected]

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