Bed Bath & Beyond Inc.

is looking at fewer stores stocked with less stuff as a way to limit the amount of cash trapped in its operations.

The Union, N.J.-based company, which is known for stacking its home goods to the ceiling, is in the process of reducing the number of stores, bringing down its inventory and building out its distribution channels. Bed Bath & Beyond wants to close 63 stores by the end of its fiscal year in February 2021, for a total of 200 over the course of the next two years.

The home-goods retailer has been struggling with falling sales for years and had to temporarily close about 90% of its stores in the early days of the pandemic. Its stores have since reopened, and digital sales are up 89% in the three months ended Aug. 29. Still, revenue in its fiscal second quarter fell to $2.69 billion from $2.72 billion in the prior-year period, Bed Bath Beyond said earlier this month.

Chief Financial Officer Gustavo Arnal, who joined the company in May, is playing a key role in accelerating the retail chain’s transformation and freeing up cash for the business. “The way to get cash flow is working capital optimization,” Mr. Arnal said.

Bed Bath & Beyond’s working capital increased by nearly 10% to $1.24 billion in the year to the end of August, compared with the prior year period, according to CreditRiskMonitor, a provider of commercial credit reports.

The company has been trying to reduce its inventory levels for years, following a peak of $2.9 billion in fiscal 2016, but analysts said it still has room to go. Its fiscal 2019 inventory at $2.1 billion

Bed Bath & Beyond Inc. BBBY came out with second-quarter fiscal 2020 results wherein both the top and bottom lines surpassed the Zacks Consensus Estimate. Results reflect gains from robust digital growth, courtesy of its BOPIS and contactless curbside-pickup facilities. Keeping in these lines, the latest introduction of same-day-delivery service is likely to aid the top line further. Apart from these, stringent cost-cutting actions and strong financial position contributed to quarterly growth.

Moving on, all its stores resumed operations by early July. However, it refrained from providing any fiscal 2020 outlook, given the continued uncertainty of the pandemic.

Q2 in Detail

Bed Bath & Beyond reported adjusted earnings of 50 cents per share for fiscal second quarter, up 47% from 34 cents reported in the year-ago quarter. Moreover, the figure came ahead of the Zacks Consensus Estimate of a loss of 17 cents. This uptick was mainly attributed to improved margins and lower expenses.

Net sales came in at $2,688 million, down 1.1% year over year, owing to the sale of One Kings Lane business. However, it surpassed the Zacks Consensus Estimate of $2,613. Moreover, digital sales rose roughly 88%, accounting for approximately 32% of total sales. Several omni-channel services, such as Buy-Online-Pick-Up-In-Store and Curbside Pickup contributed to digital sales growth. Evidently, BOPIS now accounts for more than 15% of total digital sales. Speaking of its ship-from-store facility, the company’s stores have fulfilled roughly 36% of total digital orders during the quarter under review. Driven by its strong omni-channel capabilities, Bed Bath & Beyond witnessed nearly 2 million new online customers in the quarter. On the flip side, in-store sales fell 18% in the reported quarter.

During the quarter, comparable sales (comps) grew nearly 6% year over year, marking the first sales growth since fourth-quarter fiscal 2016. This can be

What a week it has been for Bed Bath & Beyond  (BBBY) – Get Report. Shares are up about 40% so far, helped along by the stock’s 33% gain on Thursday.

The move came after the company delivered better-than-expected earnings.

The struggling retailer generated non-GAAP earnings of 50 cents a share, easily beating expectations by 79 cents. Revenue of $2.69 billion sank just 1.1% year over year and beat expectations by $70 million.

The impressive results weren’t contained to just the headline numbers. Comp-store sales growth of 6% breezed past estimates looking for a 2.1% contraction.

Bed Bath & Beyond also increased its gross margins – which topped expectations – while also generating positive free cash flow, cutting down its gross debt and boosting liquidity.

Given the struggle the stock has faced, it’s no wonder to see it popping higher now. It looks like Wedbush was right with its pre-earnings call. But what now? 

Trading Bed Bath & Beyond Stock

Daily chart of Bed Bath & Beyond stock.

Daily chart of Bed Bath & Beyond stock.

This week’s rally has ignited a very important move in Bed Bath & Beyond stock. Not only is it catapulting the share price over the 200-week moving average, but it’s reclaiming the $17.50 mark.

Reclaiming $17.50 is more significant to me than the 200-week moving average. This was a notable support level in years past, but after breaking down in 2018, it became stiff resistance in 2019 and 2020.

Then the coronavirus came along, which clearly crushed the stock. After recouping its losses off the lows, Bed Bath & Beyond stock had put together a sturdy rally that’s now becoming explosive.

From here, bulls need to see the $17.50 mark become support. That is necessary for the long-term technicals to shift in its favor. It

Against that backdrop, the latest quarterly earnings results from Bed Bath & Beyond Inc. stand out, because they show the long-suffering home goods chain to be in comeback mode. 

Bed Bath & Beyond, which also owns stores such as Buybuy Baby and World Market, reported on Thursday that comparable sales rose 6% in the three months ended in August from a year earlier, its first gain on that measure since the end of 2016. Executives said on a conference call that the trend continued into September, suggesting the company is sustaining momentum as the crucial holiday season approaches. Despite recording a 89% increase in digital sales — which can crimp profitability because of shipping costs — the retailer managed to deliver a higher adjusted gross margin than a year ago. The improvements sent shares soaring more than 30% on Thursday morning.   

Bed Bath & Beyond is certainly benefitting from factors beyond its control. The pandemic has made people spend more time at home, and that has encouraged them to splurge on decorating projects and cookware. It’s also likely helped that, amid lingering safety concerns about going to brick-and-mortar stores, some of the company’s key competitors, the TJX Cos.-owned HomeGoods and HomeSense, do not offer e-commerce.  

But it’s more than that. CEO Mark Tritton, who has been in the job less than a year, appears to be succeeding at cleaning up the mess it took his predecessor, Steven Temares, well over a decade to make. Tritton has overhauled the C-suite, appointing new leaders for everything from merchandising to technology to supply chain. He has begun closing underperforming stores and modernizing its online offering. That showed in how quickly he moved to roll out in-store and curbside pickup of online orders — something the retailer should’ve been doing anyway — in the

Bed, Bath & Beyond Inc.  (BBBY) – Get Report shares surged higher Thursday after the home retailer posted surprise second quarter earnings that topped Wall Street forecasts as online sales continue to surge.

Bed Bath & Beyond said adjusted earnings for the three months ending on August 29, its fiscal second quarter, were pegged at 50 cents per share, well ahead of the Street consensus forecast of 23 cents per share. Group revenues, the company said, were essentially flat to last year at $2.7 billion, but topped analysts’ forecast of a $2.6 billion tally thanks in part to an 89% annual increase in online sales.

Comparable store sales were solid, as well, rising 6% from last year and notching the first positive growth rate since the fourth quarter of the retailer’s 2016 fiscal year.

“Our growth strategy is unlocking improved financial performance, and the marked improvement in our second quarter financial results reflects the potential of our digital-first, omni-always transformation and our efforts to build a modern, durable platform for success,” said CEO Mark Tritton. “We’ve taken direct action to stabilize our business, including reducing our cost structure, enhancing our financial flexibility, and investing where it matters most to our customers.”

“At the same time, we have assembled a world-class and experienced leadership team to rebuild our authority in Home and modernize our operations to deliver a truly customer-inspired and omni-always shopping experience,” he added.

Bed, Bath & Beyond shares were marked 23.3% higher in early trading following the surprise earnings release to  change hands at $18.47 each, the highest in more than a year and a move that would extend the stock’s six-month gain to nearly 390%.

Last week, Bed, Bath & Beyond named Scott Lindblom as chief technology officer to support what the company called its