Bed Bath & Beyond Q3 Net Falls
UNION, N.J.-Bed Bath & Beyond's third-quarter net income fell 5 percent to $225.4 million as the company continues to invest in its omnichannel operations.
As Steven Temares, the company's CEO, said yesterday on a conference call to financial analysts, this investment is very timely given the changes in the retail environment. "This past holiday season reflects this continuing evolution in retailing as we saw more customers interact with us online and through their mobile devices than ever before," Temares said.
Net sales in the quarter, which ended on Nov. 29, totaled $2.9 billion, up 2.7 percent and including an increase in same-store sales of 1.7 percent. Temares noted that comparable sales from Bed Bath's websites and mobile applications jumped in excess of 40 percent in the quarter, where as comparable sales in the stores were about flat.
Also on the conference call, Susan Lattmann, the retailer's chief financial officer, said the technology investments were a prime factor in the 3.9 percent dollar increase in selling, general and administrative expenses. As a percentage of sales, SG&A rose 30 basis points to 26.4 percent. Gross margin in the quarter dropped 79 basis points to 38.4 percent, the result of increased coupon expense and higher expenses from shipping products to customers, Lattmann said.
For the fourth quarter, according to Lattmann, Bed Bath is modeling for a same-store sales gain of from 4 to 5 percent, bringing an increase in same-store sales of from 2.4 to 2.7 percent for the fiscal year. Total net sales are expected to rise from 4.4 to 5.4 percent for the fourth quarter, and for the fiscal year are projected for a 3.4-3.6 percent rise, she said.
Temares said, "Our ability to interact with our customers wherever, whenever and however to express their life styles and habits and move through their various life stages creates a powerful customer value proposition and a loyal customer base. By combining our services and merchandise offerings together with the ability to utilize the significant data available to us about our customers' preferences, we are excited to have the opportunity to become more dynamic and more relevant to our customers."