Bed Bath & Beyond sales decline, CEO ousted
Sales at Bed Bath & Beyond Inc. plummeted by 25% in its first quarter of 2022, the retailer announced Wednesday, a similar trend that other major retailers like Target, Walmart and Amazon have faced in recent months.
Driving the news: Bed Bath & Beyond officials said the "macro environment" was becoming more challenging and announced Sue Gove was named interim chief executive officer, replacing CEO Mark Tritton, who joined the company in November 2019.
State of play: Last week, Bank of America analysts wrote in a note that they found stores were lowering air conditioning and trimming store hours to cut costs as well as canceling or delaying store remodels.
Meanwhile, Bed Bath officials told Axios in a statement that "no Bed Bath & Beyond stores were directed to adjust their AC and there have been no corporate policy changes regarding utilities usage."
- During Wednesday's earnings call, Bed Bath said it was pausing remodels for the rest of the fiscal year.
What they're saying: "In our view, Bed Bath & Beyond has, quite simply, been run into the ground and a change of management is the only way of restoring some credibility with investors," Neil Saunders, managing director of GlobalData, said in a statement.
- "It needs to refine its turnaround strategy from a very weak financial position and at a time when the market for home furnishings is in the doldrums," Saunders said.
- "I believe a lot of this work is best done in a back-to-basics mantra that prioritizes knowing our customer and delivering the experience they deserve wherever they interact with us," Gove, the interim CEO, said during an earnings call with analysts Wednesday.
Bed Bath & Beyond clearance sale
Details: Bed Bath & Beyond's inventory rose about 15% from a year ago in the quarter but shoppers' demand fell, chief financial officer Gustavo Arnal said Wednesday.
- Expect to see more merchandise markdowns or "inventory optimization" and "incremental clearance activity," Arnal said.
Flashback: In July 2020, Bed Bath announced it would close 200 of its namesake stores over two years. The retailer also operates 135 buybuy BABY stores and 51 stores under the names Harmon, Harmon Face Values or Face Values.
- The retailer also rolled out new store-owned brands as part of its transformation plan.
Bed Bath rewards program with discounts launches
Bed Bath & Beyond Inc. has a new loyalty program — Welcome Rewards — that can be used across the company's banners on all purchases.
- The program has started rolling out and is scheduled to be at all stores by the end of July, the company told Axios.
- Customers can already use Welcome Rewards and gain points in stores where the company hasn't fully rolled out the program by entering their receipts into the retailer's mobile app.
- The company said shoppers can still use its popular coupons along with rewards.
Between the lines: There are three ways to participate in the program — a free tier Welcome Rewards, Welcome Rewards+ ($29 per year) and Welcome Rewards credit card. Shoppers can join at www.bedbathandbeyond.com/welcomerewards.
- With Welcome Rewards, earn 10 points for every $1 spent with 5,000 points equally a $5 reward. Earn 5,000 free points for signing up through July 31.
- Welcome Rewards+ replaces Bed Bath's former loyalty program Beyond+ and offers 15% off total purchases and an extra 5% in earned rewards with 50 points for every $1 spent.
- Earn 10,000 free points, a $10 value, for signing up through July 31. (Beyond+ members can choose to transfer into the new program or stay "until their current annual expiration date," the company told Axios.)
- With the Welcome Rewards credit card, there's no annual fee but cardholders get a free year of Welcome Rewards+ and can earn 10% with 100 points for every $1 spent.
Our thought bubble: Welcome Rewards+ doesn't provide the same instant gratification of 20% off purchases that Beyond+ had, however, with so many products excluded from the discount, earning the 5% in rewards will likely be more of a win for consumers.