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Bed Bath & Beyond Inc. shares rose 5.7% in Wednesday premarket trading after the home goods retailer reported fiscal first-quarter sales that beat expectations and comparable sales grew versus the same period pre-pandemic.
Net losses totaled $50.9 million, or 48 cents per share, after a loss of $302.3 million, or $2.44 per share, last year. Adjusted EPS of 5 cents per share fell short of the FactSet consensus for 8 cents per share.
Sales of $1.954 billion were up from $1.307 billion last year and ahead of the FactSet consensus for $1.873 billion.
Total enterprise comparable sales growth was 3% when compared with the first quarter of 2019. Digital sales growth was 84% from that period.
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Bed Bath & Beyond has started a business transformation over recent months that has included the launch of five private labels including Wild Sage and Simply Essential with another on the way before the end of the first half of the fiscal year, as well as the sale of five businesses. The company’s core banners are now Bed Bath & Beyond, buybuy Baby, Harmon Face Values and Decorist.
Coupled with the impact of the COVID-19 pandemic in 2020, it makes a year-over-year comparison difficult, but Chief Executive Mark Tritton told MarketWatch that investors should take note of “the pivot we’ve created, and it’s sustainable.”
Tritton notes that they have “trimmed down the organization, trimmed inventory, refocused the assortment” and there’s been an “optimization of the store network fleet” that includes store closures and store refreshes.
“This is the first quarter of a three-year plan,” he said.
For the second quarter, Bed Bath & Beyond is guiding for sales of $2.04 billion to $2.08 billion, year-over-year comparable sales growth in the low-single digit range, and adjusted EPS in the range of 48 cents to 55 cents.
The FactSet consensus is for sales of $2.020 billion, a comparable sales decline of 0.1% and EPS of 51 cents.
For the year, Bed Bath & Beyond is guiding for sales of $8.2 billion to $8.4 billion, up from previous guidance for $8.0 billion to $8.2 billion, and adjusted EPS in the range of $1.40 to $1.55.
The FactSet consensus is for sales of $8.157 billion and EPS of $1.45.
Comparable sales for the second through fourth quarters are expected to grow in the low-single digit range versus previous guidance for flat comps.
Tritton says the company is seeing “a higher rate of moving going on across the nation,” whether it’s to rent or own a home. This coupled with the anticipation of a more normal back-to-school season has made Bed Bath & Beyond confident that growth will continue even as the country continues along a path toward a return to normalcy.
One of the other developments over recent weeks is Bed Bath & Beyond has become a meme stock.
See: Wednesday’s hottest meme stock? Well, it’s not AMC.
“No one wants to be caught up in that level of volatility,” Tritton said.
“But the upside is it makes people stop and pay attention. This isn’t a meme stock. It’s a transformational company.”
Bed Bath & Beyond shares have soared 68.4% for the year to date while the S&P 500 index
SPX,
has gained 14.3% for the period.
