Wake

Bed Bath & Beyond stock surges 25% after it snags its 1st sales win since 2016

Friday, October 2, 2020 by Snacks
_Bed Bath is back, baby_

Bed Bath is back, baby

Getting a 2nd life... If this retailer were a video game, it would be called Bed Bath & Respawned. Bed Bath & Beyond, the company famous for dorm decorations, massive coupons, and being featured in an early 2000s Adam Sandler movie, is back. The stock surged 25% yesterday on a brand-reviving earnings report:

  • BBB had its 1st same-store sales gain since 2016 and swung to a $218M profit (vs. a $139M loss for the same quarter last year).
  • BBB added 2M new customers, many of them young and spending more per transaction on decorative pillows, patio furniture, and even dorm decor.

This isn't just about "House Hype"... BBB was actually late to benefit from the lockdown "House Hype," following the success of Lowe's and Home Depot. BBB thrived thanks to digital innovation:

  • Online sales soared 89% for the quarter. Now BBB is planning to close 200 of its 1.5K stores as it continues to e-nnovate.
  • Last week, BBB rolled out same-day shipping in the US in partnership with Instacart and Shipt.
  • Earlier this year, BBB launched a "buy online, pick up in-store" option along with contactless curbside pickup.
THE TAKEAWAY

This is a narrative-changing earnings report... Investors thought Bed Bath & Beyond was stagnant and dying. Until this report, the stock was worth over 80% less than it was in 2015. While it's still worth 67% less than the 2015 price, these earnings convinced many investors that BBB can succeed in a modern, remote world. So the stock majorly soared.

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