Bed Bath & Beyond Takes Q4 Coronavirus Hit With More To Come

The coronavirus pandemic, as it has for virtually every retailer in America, was not kind to Bed Bath & Beyond. Reporting its numbers for the quarter ended Feb. 29 – one that was only partially under the start of the coronavirus haze and subsequent shutdown of most of its physical retailing fleet – the big box home furnishings chain reported sluggish numbers and, more tellingly, cautioned that there’s more to come.

The situation is particularly distressing for the retailer, which was just embarking on a turnaround plan under new management to try to fix a myriad of problems that have hobbled it for much of the past few years.

For the quarter, net sales declined 6.1% even with the added boost of the Cyber Monday holiday which fell in the earlier quarter the year before. Without that, comp store sales dropped 11%. Including special items such as severance and the sale-leaseback of much of its owned real estate, BBB said it lost $65.4 million compared to a $253.8 million loss the year before when it took a significant write-down of goodwill assets.

The full-year results showed an even more distressing picture. The loss for the year was $613.8 compared to $137.2 million for fiscal 2018, the first year the retailer had ever lost money since going public in the mid-1990s. Net sales for the year were off 7.2%.

In its earnings release the company indicated it had some $1.4 billion in cash and investments, up from about $1 billion the year before, largely as a result of drawing down $236 million from a credit line and suspending stock repurchases and planned capital expenditures. Retail inventories were down $2 billion at cost.

More than 1,300 of the company’s approximately 1,500 locations have been closed since the end of March with some 60,000 employees furloughed or laid off until at least early May. The company has taken some additional measures to cut costs, including executive salary cuts and seeking government funds under the new stimulus bill.

BBB’s stock was up slightly after Wednesday’s market close reflecting a somewhat less dismal performance than analysts had expected.

Calling the results consistent with the guidance he provided in February, CEO Mark Tritton said, “Our financial position and contingency plans will allow us to retain the financial flexibility to make targeted investments that will deepen our connection with our customers and rebuild our authority in the home space.”

As with most of the retailing community, Tritton was not optimistic about what’s to come. “The company’s first quarter and full-year 2020 results will be unfavorably impacted by the COVID-19 pandemic,” he said in the statement. “The duration and extent of the pandemic is highly uncertain, and Bed Bath & Beyond’s results could be impacted in ways that are difficult to predict today. Due to the level of market uncertainty, the company will not provide further financial guidance for fiscal 2020 at this time.”