Bed Bath & Beyond grows by more than 25% online in Q3
January 11, 2016 03:47 PM
Home furnishings retailer Bed Bath & Beyond reported strong online sales growth in its most recent quarter, and unveiled a new cross-channel coupon system and plans to fulfill web orders from stores.
Bed Bath & Beyond, No. 80 in the Internet Retailer 2015 Top 500 Guide, reported net revenue of $2.952 billion, up 0.3% from $2.943 billion during the same time last year, while online sales during the quarter grew more than 25% year over year. Through the first nine months of the year, the retailer reported net revenue of $8.686 billion, up 1.7% from $8.545 billion during the same time last year while e-commerce revenues grew around 30%. Bed Bath & Beyond did not specify a dollar figure for online sales or what percentage e-commerce is of overall sales.
CEO Steven Temares told analysts on the retailer’s Q3 2015 earnings call that mobile proved to be a strong online sales driver for Bed Bath & Beyond during the quarter.
“In our mobile channels, we set new record highs across all key performance indicators during the third quarter, including traffic, orders, sales, average order value and conversion,” he said, according to a transcript from Seeking Alpha. “As consumer shopping preferences continue to shift, we remain focused on providing a seamless customer experience across all of our retail channels so that our customers can interact with us however, wherever and whenever they choose.”
Temares said the company plans to offer more items for sale online in the near future while better personalizing offers for customers.
Temares says one of his e-commerce initiatives in 2016 is to make it easier for customers to get their packages faster, including increasing the number of online orders fulfilled by the company’s 1,526 stores as well as opening an 800,000-square-foot distribution center later this year in Lewisville, Texas.
Bed Bath & Beyond also is working on making it easier for shoppers to save money. The company is launching a digital initiative it calls My Offers, which allows shoppers to scan physical coupons and upload them via Bed Bath & Beyond’s website or its mobile app to their personal accounts with the retailer. A shopper can then redeem a coupon when shopping in a store by displaying her smartphone or use the coupons online.
“My Offers is a virtual coupon wallet that organizes and stores print and digital coupons and includes the ability to scan and upload paper coupons so customers can access and redeem them conveniently,” Temares said. “We continue to learn from customer usage as we further develop the appropriate strategic implementation of this customer-centric solution.”
Wells Fargo analysts Matt Nemer and Trisha Dill says My Offers shows Bed Bath & Beyond’s “willingness to modernize the coupon strategy, but we wonder if it is too complex.” Regarding the retailer’s overall prospects they said, “We believe Bed Bath remains a stable business with good cash flow, but one in the crosshairs of a massively disruptive retail landscape.”
For the third quarter ending Nov. 28, Bed Bath & Beyond reported:
- Gross profit of $1.115 billion, down 1.2% from $1.129 billion during the same time last year.
- Operating profit of $292.9 million, down 17.0% from $352.7 million.
- A comparable sales decline of 0.4%, compared to a 1.7% gain.
For the first nine months of 2015, Bed Bath & Beyond reported:
- Gross profit of $3.300 billion, up 0.2% from $3.294 billion last year.
- Operating profit of $916.3 million, down 10.2% from $1.02 billion.
- A year-over-year comparable sales increase of 0.8%, compared with an increase of 1.9%.