Bed Bath & Beyond soars 33% after strong earnings report tops expectations
- Bed Bath & Beyond surged 33% on Thursday after it reported strong second quarter earnings that topped analyst expectations.
- The retailer posted growth of 89% in its digital sales channel, which includes online and curbside pickup orders.
- Bed Bath & Beyond failed to give guidance due to the continued uncertainty surrounding the COVID-19 pandemic.
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Bed Bath & Beyond is showing signs of a successful turnaround after it reported strong second quarter earnings that topped analyst expectations.
Shares surged as much as 33% in Thursday trades to $19.89 as investors reacted to the positive earnings report.
Hear are the key second quarter numbers:
Revenue: $2.69 billion, versus the $2.62 billion analyst estimate
GAAP EPS: $1.75, versus the 1 cent analyst estimate
Comparable sales jumped 6% in the quarter, well ahead of consensus estimates of a 2.1% comparable sales decline.
Helping boost sales was Bed Bath & Beyond's digital channel, which includes both online sales as well as curbside pickup orders. Sales in the channel grew 89% in the quarter.
Adjusted gross margins increased by 200 basis points to 35.9%, well ahead of consensus estimates of 30.9%. The growth in profit margins was driven by a favorable product mix and the leverage of distribution and fulfillment costs, Bed Bath & Beyond said.
The debt load of the company continued to decline, as it retired about $500 million in debt through a bond tender offer and the repayment of a bank loan. The company has $2.2 billion in cash that should help it continue to weather the COVID-19 pandemic.
The retailer did not give any forward looking guidance estimates given the continued uncertainty surrounding the COVID-19 pandemic, but did say it believes it is in a strong financial position to make it through the other side of the pandemic.
Shares of Bed Bath & Beyond are up as much as 480% since the stock's pandemic low reached in early April.
