Bed Bath & Beyond private brands outperform penetration goals
Bed Bath & Beyond reported positive movement for its brand-new private brand launches this year. The company reported its second-quarter financial results that showed a slight dip in same-store sales for the quarter, due to low traffic volumes, but the private brand launches are on track for high levels of market penetration.
The report for June through August showed three of its new owned brands demonstrating 20% sales penetration for fiscal year 2021 and more than 25% sales penetration in its remodeled stores.
The home goods chain has been heavy into private brands, releasing its seventh of eighth to come fiscal year 2021. The company said during its Q2 financial call that it will launch 10 Bed Bath & Beyond owned brands over the next three years, with an eye on 30% market penetration.
Yesterday, the home goods and housewares chain introduced Studio 3B, a home decor line with a minimalist feel. The collection includes more than 600 products to spruce up the home.
“Our higher margin Owned Brands are outperforming our penetration goals across the overall chain, and even stronger in remodeled stores,” said Mark Tritton, president and CEO of Bed Bath & Beyond. “As a group, we continued to leverage our enhanced digital channel, with significant growth above 2019 at nearly double the proportion of sales. Operationally, we entered the next phase of our supply chain modernization through our partnership with Ryder which is instrumental to our strategy. We are committed to executing over the short, mid and long term, especially during these early stages of our multi-year plan."
Other highlights from the financial call included Bed Bath & Beyond reporting a core sales decline of 11%, primarily due to the impact of fleet optimization.
The same-store sales were up 3% in physical stores and down 9% in digital vs. the same period a year ago. Net sales reached $1.98 billion, down 26% compared with fiscal 2020 second quarter. The net sales included a planned reduction of 15% from non-core banner divestitures. Sales in key destination categories, including bedding, bath, kitchen food prep, indoor decor and home organization, declined 6% compared with the 2020 fiscal second quarter. These categories represented approximately two-thirds of total Bed Bath & Beyond banner sales in the second quarter.
“While our results this quarter were below expectations, we remain confident in our multi-year transformation. Following solid growth in June, we saw unexpected, external disruptive forces toward the end of the quarter that impacted our outcome,” said Tritton.