American omnichannel retailer Bed Bath & Beyond has reported $1.259 bn in net sales, down 33 percent, in the third quarter (Q3) of fiscal 2022 (FY22), ended November 26, 2022, compared to the same period of the previous fiscal. The company’s Welcome Rewards membership surpassed 16 mn, increasing from approximately 6 mn in Q2 FY22, reflecting predominantly new members.
In Q3 FY22, Bed Bath & Beyond banner’s comparable sales declined 34 percent year-on-year (YoY), while Buybuy Baby’s comparable sales declined in the low twenties percent range YoY. The sales performance was driven by lower in-stock position of approximately 70 percent and decrease in customer traffic, the company said.
In terms of channels, in Q3 FY22, comparable sales declined by 31 percent in stores and by 33 percent in digital, versus Q3 FY21.
The company’s GAAP gross margin was 22.1 percent and adjusted gross margin was 22.8 percent, reflecting the continuation of incremental clearance activity related to discontinued owned brands merchandise and increased promotional activity.
Selling, general, and administrative expense was $583.6 mn in Q3 FY22, significantly below $698 mn in the corresponding period of last year, driven by successful execution of aggressive cost reduction initiatives to right-size expense structure. The company expects to deliver its previously announced selling, general, and administrative expense reduction target of approximately $250 mn versus last year for the second half of fiscal 2022, or approximately $500 mn on an annualised basis.
Adjusted EBITDA for Q3 FY22 was minus $225 mn, reflecting lower net sales and lower adjusted gross margin.
For the third quarter of fiscal 2022, the company reported negative operating cash flow of approximately $307.6 mn.
“At the beginning of the third quarter, we initiated a turnaround plan anchored on serving our loyal customers, following a period when our merchandise and strategy had veered away from their preferences. Although we moved quickly and effectively to change the assortment and other merchandising and marketing strategies, inventory was constrained, and we did not achieve our goals. We will continue to rebalance our assortment towards national brands and refine our owned brands mix to reflect the deep understanding of our customer, along with the selection and value only we can offer in the Home and Baby markets. We are actively pursuing higher in-stock levels to meet proven demand,” said Sue Gove, President and CEO of Bed Bath & Beyond, Inc.
