Home improvement retailer Bed Bath & Beyond, Inc. (BBBY) on Thursday reported a net loss for third quarter that nearly doubled from last year, hurt by charges related to its restructuring and transformation initiatives.
Both adjusted earnings per share and net sales missed analysts’ expectations. The company also did not provide specific financial guidance, due to the significant COVID-19-related headwinds.
For the third quarter, the New Jersey-based home goods retailer reported a net loss of $75.44 million or $0.61 per share, sharply widener than $38.55 million or $0.31 per share in the prior-year quarter.
Results for the latest quarter include unfavorable impacts from special items including the net loss on the sale of businesses, charges recorded in connection with the restructuring and transformation initiatives, and non-cash impairment charges related to assets held for sale, tradename and certain long-lived assets, partially offset by a benefit from the reduction of non-recurring inventory reserves.
Excluding items, adjusted net income for the quarter were $10.43 million or $0.08 per share, compared to an adjusted net loss of $45.90 million or $0.38 per share in the year-ago quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.19 per share for the quarter. Analysts’ estimates typically exclude special items.
Net sales for the quarter declined 5 percent to $2.62 billion from $2.76 billion in the same quarter last year. Analysts expected revenues of $2.75 billion for the quarter.
The decline in sales was attributable to the significant portfolio transformation, including the planned divestitures of non-core banners and store closing activity as part of the company’s network optimization initiative.
Comparable sales for the quarter grew 5 percent, fueled by 94 percent digital comparable sales growth on core Bed Bath & Beyond banner. Total enterprise comparable sales grew 2 percent.
Looking ahead, the company is not providing specific sales and earnings guidance for the fiscal 2020 fourth quarter, due to the significant COVID-related headwinds including heavy store traffic declines, major shipping constraints and higher freight costs.
However, the Company expects to continue driving significant sales growth from its digital channels, while sales from stores are anticipated to be unfavorably impacted by declines in store traffic trends.
For the fourth quarter, the company expects total enterprise comparable sales growth to be positive, including continued strength across key destination categories. Net sales are estimated to be lower by a double-digit percentage range, as a direct result of adjustments from transforming the Company’s overall portfolio
Looking ahead to fiscal 2021, with its core portfolio banner work now complete (the final transaction is set to close in the fiscal 2020 fourth quarter), fiscal 2021 EBITDA is being enhanced to a range of $500 million to $525 million from the prior forecast of more than $500 million.
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