Dive Brief:
- Embattled home goods retailer Bed Bath & Beyond reported fiscal second-quarter net sales slumped 28% to $1.4 billion from the year-earlier period, resulting in a net loss of $256 million for the period, as the company presses forward with a turnaround plan involving deep cost-cutting measures that included store closures and layoffs announced last month.
- Newly appointed interim CFO Laura Crossen said on the Thursday earnings call that margins were negatively impacted by supply chain costs, port-related fees and accelerated sales clearance activity. While the company remains on track to pull back on its second half capital expenditures company executives said it is also focusing on shifting inventory to offer more national branded products.
- Looking ahead Crossen confirmed that the company expects to break even in the fourth quarter from a cash flow perspective, a crucial period for retailers that she acknowledged has historically been cash-flow positive. There are “a number of moving parts including our store closure program which has a number of dynamics and the progression of our national brand inventory build,” Crossen said during the call.
Dive Insight:
The earnings report comes as the retailer is navigating stormy waters after being buffeted by an unusually potent mix of challenges. Like many retailers it is grappling with supply chain and inventory issues, but it has also struggled with “meme stock volatility,” a class-action lawsuit alleging the company artificially inflated its stock price and the sudden death of CFO Gustavo Arnal earlier this month that left the firm headed by two interim leaders.
Just days after Arnal’s death sent shockwaves across Wall Street and beyond, the home-goods retailer made the swift decision to look within its own ranks and pick chief accounting officer Laura Crosssen as its interim finance chief. Crossen is now working with interim CEO Sue Gove and Bed Bath & Beyond’s crisis has shed light on the importance of succession planning across the C-suite.
CEO Sue Gove opened the call by acknowledigng Arnal’s passing and contributions. “Gustavo was a distinguished leader and dedicated colleague to all of us at BBB and we are proud to have known and worked with him over the past several years,” Gove said. “His talent and contribution to our business and teams will be missed.”
Before the question and answer portion of the earnings call, Crossen thanked the company’s finance organization for their resilience and support. “As we’ve navigated the last few unprecedented weeks, we’ve come together to ensure continuity and support for our whole organization and I am especially inspired by our dedication and teamwork this quarter,” Crossen said.
The company’s shares ended the day down 4.26 to close at $6.18.
