Second Quarter Financials and 2022 Expectations
Second Quarter Results
- Net sales: $1.45 billion
- Comparable sales decline: 26% YoY
- Free cash flow usage: $325 million
- Comparable sales decline in the 20% range driven by improvements in the second half of fiscal 2022 versus the first half of fiscal 2022
- Adjusted SG&A expense approximately $250 million below last year reflecting cost optimization actions occurring in the second half of fiscal 2022
- Capital expenditures of approximately $250 million versus the original plans of approximately $400 million
The company is also making significant reductions across its cost structure, which will reflect immediately across merchandising, inventory, and traffic. Longer-term initiatives are being put on hold, and the company plans to slow on owned brands development.
The brand has also further reduced its capital spending. Planned capital expenditures are now forecasted to be $250 million, compared to the $400 million previously disclosed.
In order to improve its footing, Bed Bath & Beyond has secured more than $500 million in new financing, and is preparing to sell off $12 million shares of common stock with proceeds going toward corporate purchases including repayment of debt.
A Renewed Focus
Bed Bath & Beyond is pivoting, reducing its share of owned brands to focus on bringing back popular national brands and introducing emerging direct-to-consumer brands. The company plans to discontinue three of its nine owned brand labels: Haven, Wild Sage, and Studio 3B.
Additionally, consumers can expect to see a noticeable decrease in the remaining owned brands on store shelves — the company is reducing these to 20 percentage points for a more balanced sales-to-stock ratio. With these changes, the company expects to increase inventory penetration by 20 percentage points over the long term.
The brand plans to continue with strategies that have proven profitable, including its loyalty program, Welcome Rewards, which has increased new membership by 20% — currently 5 million total members.
Additionally, in order to improve access to products, the company is hosting a supplier event in early Fall to build new relationships and strengthen existing ones. Lastly, the company has reviewed the value of its buybuy BABY brand and will continue strategies to “accelerate further growth and unlock the brand's full potential including building on its digital and registry platforms, addressing additional age groups, and expanding products and services.”