Bed Bath & Beyond on Wednesday reported that first quarter net sales fell 6.6% to $2.6 billion, from $2.8 billion in the year-ago period, according to a company press release.
The company's comparable sales also fell 6.6% in the quarter, which CFO Robyn D'Elia told analysts "reflected a decrease in the number of transactions in stores, partially offset by an increase in the average transaction amount." Bed Bath & Beyond has now posted negative comps for 12 of the past 13 quarters.
Operating loss totaled $406.8 million, from a profit of $81.2 million a year ago. Net income fell to a whopping $371 million from a profit of $43.6 million one year prior.
Bed Bath & Beyond's struggles don't appear to be easing anytime soon.
Interim-CEO Mary Winston, who took the helm in May following Steven Temares' departure, outlined a four-part strategic plan Wednesday, which includes reviewing its assets. In addition to its namesake brand, the company operates Cost Plus World Market, BuyBuy Baby, Christmas Tree Shops, Harmon Face Values, andThat!, PersonalizationMall and One Kings Lane.
The move could bode particularly well with the company's shareholders, who in April urged Bed Bath and Beyond to sell its underperforming assets, namely Cost Plus World Market, PersonalizationMall and Christmas Tree Shops, with the possibility of a BuyBuy Baby sale, too.
While the company is still searching for a permanent CEO, Winston indicated a sense of urgency in this four-part plan dubbing the initiatives "near-term priorities."
Bed Bath & Beyond is "in the process of evaluating the various retail banners [it operates] to better understand their strategic and financial contributions to the portfolio," she said. "Following this review, we will determine the appropriate next steps."
In addition to reviewing its assets, Winston also noted that the company is looking to stabilize its sales and drive topline growth, reset its cost structure and refine its organizational structure.
The substantial loss the company reported included, "pretax charges related to non-cash goodwill and other impairment of approximately $401 million, severance, including the departures of key senior executive of approximately $38 million and shareholder activity costs of approximately $8 million," D'Elia said.
Gross margin accounted for 34.5% of net sales compared to 35% in the year-ago quarter, which D'Elia told analysts was due to a "decrease in the merchandise margins, partially offset by decreases in coupon expense and net direct to customer shipping expense." This marks 30 consecutive quarters of declines to gross margin, according to Seeking Alpha.
The company opened three stores in the first quarter — one Bed Bath & Beyond store and two BuyBuy Baby stores — marking 1,536 total locations at the end of the quarter.
Bed Bath & Beyond also updated its guidance for the remainder of the fiscal year. Bed Bath and Beyond said it is now "modeling to be at the lower end of its previously provided ranges," of net sales between $11.4 billion and $11.7 billion.
"There is critical work to do and there are challenges we are working to address," Winston said. "We remain confident in the underlying business and our ability to leverage the strength of the Bed Bath & Beyond brand and our lasting connection with customers to deliver on our near-term priorities and transform the company."