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