Bed, Bath & Beyond says consumer spending is slowing

The home goods chain said Wednesday that sales fell 22% in its fourth quarter ended March 31. Bed, bath and beyond (BBBY) fell about 1% on Wednesday.

The retailer blamed the decline on a set of challenges that dampened momentum at its stores, including products stuck in ports and continued supply chain blockages that created shortages of key items.

“We are seeing emerging uncertainty related to consumer sentiment based on market and retail indicators that show a marked slowdown in consumer demand,” said Gustavo Arnal, Bed, bath and beyond (BBBY) chief financial officer, said Wednesday in a call with analysts.

Sales at stores open for at least a year have fallen 20% so far in the company’s current quarter.

“We expect many of the operational dynamics we experienced in the fourth quarter, both industry-wide and internally, to continue into the first quarter,” he said on the call.

Bed, Bath & Beyond CEO Mark Tritton said the unavailability of certain products resulted in lost sales of around $175 million during the period and the retailer was unable to deliver key items announced in its circulars. He added that the company continues to experience high freight and shipping costs related to ongoing global supply chain issues.

Weddings are a rare boost

If there’s one bright spot, Tritton said, it’s the company’s bridal and baby categories.

The wedding industry predicts a boom in 2022, with as many as 2.6 million weddings expected this year, compared to 2.2 million in 2019, before the pandemic.

A banner year for weddings will be a welcome relief not just for the bride and groom, but for the entire industry and the retailers who respond to it and depend on it for their income. The nightmarish year of 2020 has forced the cancellation or postponement of the majority of weddings, and dozens of businesses that depend on them for income have struggled to survive.

Bed, Bath and Beyond is a popular destination for marriage registries.

Tritton said on the call that the company is seeing an increase in wedding and baby business. (The company also operates a chain of baby items buybuy baby).

“I think we’re seeing upward trends in marriage that everyone expects and we want to capitalize on that. So the early indicators through the end of the fourth quarter bode well,” said Triton.

Militant action

Bed, Bath & Beyond has caught the eye of activist investor Ryan Cohen, who wants to shake things up in the business.

Its RC Ventures bought a nearly 10% stake in Bed Bath & Beyond (BBBY) on March 6, making the investment firm one of the top five shareholders. Cohen criticized the company’s current strategy and urged it to make changes.

Cohen, who also founded online pet retailer Chewy, wrote that Bed Bath & Beyond tries to implement too many “heavy” plans at once and should instead “focus” on priorities, such as improving its supply chain and its range of goods. He recommended the company consider splitting up its buybuy Baby stores or even looking for a buyer to privatize the entire company.

Bed Bath & Beyond “struggles to reverse sustained market share losses, stem stock price declines for years, and manage supply chain volatility,” Cohen recently wrote to the board. administration, adding that the “excessive” financial compensation of the company’s executives did not match that of the company. performance.

Bed Bath & Beyond replied to Cohen that he will “carefully consider” his letter and “hope to engage constructively around the ideas” he offered.
On March 25, the company reached an agreement with Cohen’s company, RC Ventures, saying in a statement and that three people from RC Ventures would immediately join Bed Bath & Beyond’s board of directors as independent directors. He also said a committee would explore alternatives for the buybuy Baby channel and provide recommendations to the board.

— CNN Business’ Nathaniel Meyersohn contributed to this report

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