Bed Bath & Beyond CEO talks labor shortage, turnaround, meme stock status
Bed Bath & Beyond is offering thousands of new products across its home category
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After kicking off the company's three-year transformation, Bed Bath & Beyond CEO Mark Tritton is looking to build upon the housing retailer's strong first quarter sales and stock performance.
BED BATH & BEYOND TURNAROUND BOOSTS STOCK
Tritton told FOX Business that the launches of Nestwell, a new bedding and bath label; Haven, a spa-inspired product line; and Simply Essential, an everyday basics line including over 1,200 products across bedding, bath, kitchen, storage and organization and indoor decor, have helped boost the company's home category market share.
"We saw overall that the market was around 23% in our home categories as an owned brand ratio and we were only at 9%," Tritton said. "We launched those in the middle of every month, March, April, May, and that had a positive impact on the quarter, increasing our market share penetration almost double to what it was prior and well on our way to our 20% goal by the end of [the fourth quarter]."
Nestwell product line (Photo courtesy of Bed Bath & Beyond)
Meanwhile, Bed Bath & Beyond's second quarter has been all about home improvement and widening its consumer base to Gen Z heading back to college.
In June, the company launched Our Table, a new line of over 1,100 modern kitchen and dining products, and Wild Sage, an indoor decor brand offering 600 products for the bedroom, bath, and other living spaces. In July, the company will also unveil its Squared Away line, offering 300 products focused on storage, organization, and cleaning.
"We know the back to college period is all about maximizing storage in a new environment," Tritton said. "So the timing of that is perfect."
Our Table product line (Photo courtesy of Bed Bath & Beyond
As for the rest of the year, Tritton says the company will launch two additional lines focused on the indoor decor space, but remained tight-lipped on specific details. Private label sales are expected to represent 30% of Bed Bath & Beyond's business by 2023.
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In addition to new products, Bed Bath & Beyond is updating its stores to provide an easy and convenient shopping experience for customers, featuring curated offerings, a revised check out, and a repositioned customer service desk.
"I think before we were cramped, we were over-assorted, the merchandise was very, very high. It was packed to the rafters, which for some customers we had was intimidating," Tritton explained. So there's just a breathing space and it feels much more residential in the store than it does warehousey and I think that's important. Customers want to see things in the space that they can relate to."
Bed Bath & Beyond is updating its stores to provide an easy and convenient shopping experience for customers, featuring curated offerings, a revised check out, and a repositioned customer service desk. (Photo courtesy of Bed Bath & Beyond)
About 26 of Bed Bath & Beyond's 818 name-brand stores have been remodeled as of the end of the first quarter. The company expects to remodel up to 150 North American locations by the end of 2021 and 400 over the total three-year transformation.
As for new stores, Tritton is focused on growing the Buy Buy Baby brand, which is "really under-penetrated in terms of real estate and distribution across the nation."
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Despite federal stimulus winding down, Tritton believes Bed Bath & Beyond sales remain well-positioned for the future, noting checks have had a "quite minor" impact on its overall consumer spend. The company expects full year net sales in the range of $8.2 billion to $8.4 billion and adjusted earnings per share between $1.40 to $1.55.
Tritton also said that while Bed Bath & Beyond has had a slightly higher level of employee turnover, there's been no issues replenishing staff due to upgraded employee incentives, including up to eight weeks of paid parental leave.
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Bed Bath & Beyond shares have risen over 89% this year, in part due to Wall Street's meme stock mania. But Tritton says the attention from retail investors has no bearing on the company's overall business strategy.
"Although we've been caught up momentarily in meme mania, the emphasis has shifted very quickly off us and stayed with others," Tritton said. "It brought people to the table to look at the fundamentals of the company and understand this was truly a transformation story that was taking hold and you're seeing, if you take out those high peaks, a restabilization of our share price against our performance. So we continue to deliver, we continue to be focused, we continue to be purposefully bringing our plan to life and the rest of it we watch as everybody else does."