It was a challenging first quarter for Bed Bath & Beyond, as the retailer’s comps and earnings declined, although digital sales continued to grow.
For the fiscal 2017 first quarter, Bed Bath & Beyond posted net earnings of $75.3 million, or 53 cents per diluted share, versus $122.6 million, or 80 cents per diluted share, in the period a year prior. Bed Bath & Beyond missed a MarketBeat published analyst average estimate of 66 cents per diluted share for the quarter.
Comparable sales in the period decreased by 2%, while net sales increased 0.1% to $2.74 billion from the previous first quarter. Comparable sales from customer-facing digital channels grew in excess of 20% during the quarter, while comparable sales from stores declined in the mid-single-digit percentage range versus the period a year earlier.
Bed Bath & Beyond noted that, although it continued to have strong growth in customer-facing digital channels in the first quarter, the company experienced softness in store transactions as well as higher net-direct-to-customer shipping expense, coupon expense and advertising costs.
In a conference call, Steven Temares, Bed Bath & Beyond’s CEO, said the first quarter exemplified the challenges presented by declining foot traffic in stores as well as the opportunities presented by omnichannel retailing. He said that digital and mobile initiatives continue to advance at a healthy pace in part due to better customer experience, which has been driven by a larger online product assortments and service offerings.
Temares noted that Bed Bath & Beyond has been improving web-based content with the intent of becoming a more inspirational resource for customers, making enhancement to search and navigation, and creating a simpler checkout experience. In search functions, Temares said, Bed Bath & Beyond continue to implement machine learning capabilities to improve the relevancy of results. In addition, the company has added a simple coupon code in checkout to allow customers to apply coupons to their online order, he said.
Among its mobile initiatives, the company has improved the speed of the Bed Bath & Beyond and the buybuy Baby app by optimizing targeted experiences for Apple and Android operating systems, while upgrading the company’s My Offers, its digital coupon wallet, and enhancing registry functions.
