Bed Bath & Beyond Reports Losses in Net Earnings

A recent Wall Street Journal article has pointed out that home goods retailer Beth Bath & Beyond isn’t doing so well. The company’s own fiscal reports support this conclusion, with almost a 50 percent decrease in net earnings per diluted share during Q2 2018 compared to Q2 2017. While it reported net earnings of $94.2 million in the latter year, current earnings are just $48.6 million.
 
These earnings are fairly dispiriting, especially since net sales for Q2 2018 were flat to the prior year quarter, at $2.9 billion.  While comparable sales in Q2 2018 decreased by 0.6 percent, the company saw strong sales growth from customer-facing digital channels and sales from stores that declined in the mid-single-digit percentage range.
 
Given these results, the company has reviewed its financial planning assumptions for fiscal 2018. These assumptions have reflected actual results through the fiscal second quarter, current trends, and other factors.  Based on its review, the company has slightly reduced its net sales model, with comparable sales to be relatively flat to last year, and net earnings per diluted share for the full year to be at the low end of its previously modeled range, at about $2.00.
 
The Q2 report follows on the heels of similarly disappointing Q1 report, which announced a 40 percent decrease in net earnings per diluted share from the same quarter in 2017. In Q1 of that year, the company reported net earnings of $75.3 million, while in Q1 2018 it reported $43.6 million. It did report, as with its Q2 results, strong sales growth from customer-facing digital channels.
 
The company hopes to moderate declines in operating profit and net earnings per diluted share in fiscal 2018 and fiscal 2019, and to achieve growth in net earnings per diluted share by fiscal 2020. Part of the company’s strategy to meet this goal seems to be changes in senior management. It announced some of these changes back in June.
 
Eugene A. Castagna, with the company since 1994, was named President and Chief Operating Officer. Susan E. Lattmann, formerly the CFO and Treasurer, was promoted to Chief Administrative Officer. In addition, Robyn M. D’Elia, with the company since 1996, was promoted to CFO and Treasurer.
 
“We are extremely pleased to announce these changes to our leadership structure,” said Steven Temares, Chief Executive Officer of Bed Bath & Beyond. “We have developed a talented team of passionate leaders across our organization, and we will further leverage our internal strengths and talents, as well as take advantage of external expertise, as we progress our transformation and strengthen our position as the expert for the home and heart-felt life events.”
 

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