Bed Bath & Beyond’s net sales of $1,437 million declined 28 per cent in the second quarter of fiscal 2022, reflecting a comparable sales decline of 26 per cent and 2 per cent related to the impact from fleet optimisation activity. By channel, comparable sales declined 28 per cent in stores and 22 per cent in digital versus the fiscal 2021 second quarter.

GAAP and adjusted gross margin was 27.7 per cent for the quarter. Adjusted gross margin of 27.7 per cent included a 260 basis point negative impact compared to last year from accelerated clearance activity as the company works aggressively to right-size inventory levels commensurate with sales. Port-related transient supply chain costs also impacted adjusted gross margin by 100 basis points versus the year ago period. Excluding the aforementioned 360 basis points of accelerated and transient costs, second quarter adjusted gross margin would have been 31.3 per cent.

“Our results for the second quarter came in as previously expected and announced. While our sales and profit results do not yet reflect the strategic and financial actions we have initiated to change our performance, they do demonstrate sequential progress in several key areas. In the first quarter, we experienced a significant dislocation between sales and inventory that we began to address immediately during the second quarter. Aggressive inventory optimisation actions, including accelerated markdowns and strategic promotions, led to double digit improvement in this gap. Working with our supplier partners has also been an important focus area and our payables are considerably healthier than in the prior quarter as evident on our balance sheet,” Sue Gove, director & interim CEO of Bed Bath & Beyond, said.

“Although still very early, we are seeing signs of continued progress as merchandising and inventory changes begin. For example, we have seen positive sales trends where in-stock positions and visual merchandising have improved. Our Welcome Rewards loyalty programme also continues to gain momentum with membership expanding by more than 1.3 million since the end of August, for a total of 6.4 million members since launching this summer. Enrolled members represent more frequent purchases and higher transaction values across all three banners. Our buybuy BABY business continues to hold market share relative to other mass market retailers in today’s highly competitive environment. We are enhancing our capabilities while leveraging Welcome Rewards, such as the relaunch of our Baby registry business later this fiscal year, increasing the effectiveness of marketing investments, and realising the strategic shift of our merchandise assortment which had minimal impact in this quarter, all targeted to drive customers and top-line growth,” Gove continued.