The efforts of Bed Bath & Beyond to transform the home specialty retailer continue to show progress, but fourth-quarter results show more work needs to be done.
It’s been less than two years since the company’s new management team led by its President & CEO Mark Tritton has been in charge, and Bed Bath’s transformation from what had been a staid retailer to one focused on digital growth, new owned brands and store remodels is evident.
During an investor conference call, the company reported that the Bed Bath & Beyond banner posted digital comparable sales growth of 99%, nearly doubling the previous year’s sales.
Joe Hartsig, chief merchandising officer and president of Harmon Face Values, said the company in the fourth quarter gained 3.1 million new digital customers, with 2.4 million of those coming from Bed Bath & Beyond.
“Year-to-date, we have gained approximately 11 million new online customers and during the fourth quarter we experienced more than 300 million visits to our digital channels,” he said. “Not only are we attracting new customers, but we are also seeing a return at a higher rate than ever before.”
Tritton noted that customers who connect with Bed Bath & Beyond through its digital avenues are then transitioning to becoming what he labels an “omni-always customer.”
“The good news is that they are, on average, younger and less likely to buy promotionally,” he said. “We’re also seeing them delve into all of our core categories.”
Despite the growth in customer acquisition, the company’s fourth-quarter results show a retailer still in transition.
Net sales for the three-month period ended February 27 were $2.6 billion, a 16% decrease when compared to the same quarter in the previous year. Company officials said the decrease was the result of previously planned non-core banner divestitures and store closures.
Among the product category bright spots in the fourth quarter, Bed Bath & Beyond said sales of toaster ovens and air fryers were up 60% and 70% respectively. Additionally, the home organization category also saw solid growth with sales up 17%.
The retailer also continues with its store remodel plans. In fiscal 2021, Bed Bath & Beyond is planning facelifts for between 130 and 150 stores located in about 30 states. This includes 26 store remodels in the fiscal year first quarter.