Bed Bath & Beyond surges 54% after it introduces 3 new private label brands in continued turnaround strategy

bed bath & beyond
  • Shares of Bed Bath & Beyond surged as much as 54% on Wednesday after the retailer announced the launch of its own private label brands.
  • The retailer will soon launch three new owned brands targeting the kitchen, home, and storage space.
  • As part of its turn around, Bed Bath & Beyond has launched a number of private label brands in a bid to boost both profits and sales.
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Bed Bath & Beyond spiked as much as 54% in Wednesday’s trading session following the retailer’s “ahead of schedule” launch of three new private label brands targeting the kitchen, home, and storage space.

The private label launch by the retailer is part of its continued turnaround strategy since CEO Mark Tritton took over in late 2019. The brands Our Table, Wild Sage, and Squared Away will launch in the coming weeks and round out Bed Bath & Beyond’s private label offering to six total.

The retailer said it plans to have launched a total of eight private brands by February of next year, and at least ten new brands total. The move into private label brands is following the playbook of Tritton’s former employer, Target, which has seen great success with its Threshold, Hearth & Hand, and Room Essentials brands.

Bed Bath & Beyond launched Simply Essential, Haven, and Nestwell brands last quarter, offering products in the kitchen, bathroom, and bedroom space. Bed Bath & Beyond’s three new brands will offer more than 2,000 individual products for sale.

The move is a bid to continue Tritton’s turnaround strategy of the struggling retailer, with private label brands often seen as boosting profits for retailers, as well as sales if the brands take off with consumers. The retailer expects its private label brands to triple its sales penetration to 30% from 10% over the next three years.

Bed Bath & Beyond’s surge on Wednesday could have also been supercharged by an overall frenzy in so-called “meme” stocks, with AMC Entertainment leading the charge, up more than 100% on Wednesday. Bed Bath & Beyond is a heavily shorted stock that nearly tripled amid the GameStop frenzy that occurred in late January.

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Bed Bath & Beyond tumbles 15% as store closures weigh on quarterly sales

Mark Tritton Bed Bath & Beyond store CEO
Bed Bath & Beyond CEO Mark Tritton.

  • Bed Bath & Beyond shares lost as much as 15% on Wednesday following mixed first-quarter results from the house goods seller.
  • First-quarter sales of $2.62 billion slightly missed Wall Street’s consensus estimate of $2.63 billion.
  • The retailer reaffirmed its sales outlook for fiscal 2021.
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Bed Bath & Beyond shares were knocked sharply lower Wednesday after first-quarter sales results from the housewares retailer fell short of Wall Street’s target.

The company on Wednesday posted quarterly adjusted earnings of $0.40 per share, higher than the analyst consensus estimate of $0.41 per share from Refinitiv and up from $0.38 per share a year earlier.

Sales for the quarter ended Feb. 29 fell by 16% to $2.62 billion from $3.11 billion a year ago, slightly missing the $2.63 billion that Wall Street had anticipated.

Shares fell as much as 15% to $23.68 in heavy volume before the losses were pared to 10% during the session. The company’s stock has soared over the past year from about $4 each.

Bed Bath & Beyond, which is executing a turnaround plan, said quarterly sales were hurt in part by divestitures and permanent store closures. Bed Bath & Beyond in January sold Cost Plus World Market to private equity firm Kingswood Capital Management and in November completed the sale of Christmas Tree Shops and its institutional Linen Holdings business.

First-quarter comparable store sales decreased 20%, the company said. Total enterprise same-store sales rose by 4% while online sales surged by 86%. The company said its strongest categories during the period included bedding, bath and kitchen food preparation.

The company reaffirmed its fiscal 2021 outlook for net sales of $8 billion to $8.2 billion and its adjusted EBITDA guidance of $500 billion to $525 million.

“As our transformation continues to take hold, we will show up differently for our customers with enhanced omnichannel experiences and modern stores,” among other actions, said Mark Tritton, Bed Bath & Beyond’s president and CEO, in the earnings statement.

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