Union, NJ – Supply chain problems, inventory shortages and declining consumer demand led to a huge loss in Bed Bath & Beyond net profit in the fourth quarter.
Net sales for the quarter ended February 26 fell 22% to $2.05 billion, compared to $2.61 billion in the same period last year, and the company reported a net income loss of $159 million.
Comp store sales were down 12% compared to the fourth quarter of 2020, and 8% compared to the fourth quarter of 2019. The company said core sales performance compared to last year was primarily driven by lower Bed Bath & Beyond banner sales.
Major categories such as bedding, bathroom, kitchen, food preparation, interior decoration and home organization were particularly affected. Sales in those categories are down 17% compared to the parallel time period in 2020, and are down 5% compared to 2019. These categories account for two-thirds of total Bed Bath & Beyond banner sales in the fourth quarter of fiscal year 2021.
Digital sales fell 18%, which the company attributed to “normalization of demand.”
In a statement, CEO Mark Triton said: “We are disappointed that our sales and gross margin performance do not reflect the hard work of our team and execution against both our strategic and transformational efforts in 2021.
“Macroeconomic factors such as global supply chain disruption, the Omicron variable, as well as geopolitical turmoil affecting consumer confidence, have revealed more vulnerabilities than we would have anticipated at this point in our transformation, as we rebuild the foundation of our business.
“The lack of available-for-sale inventory has proven to be a persistent impediment to sales during the remainder of the fourth quarter through the first part of fiscal year 2022. Specifically, despite our overall inventory levels, product in transit, not available for sale or held in port remained Abnormally high, especially in the principal elements.”
The lack of inventory cost the company nearly $175 million in fourth-quarter sales, according to Triton.
Triton also noted that fiscal 2021 was a rebuilding year for Bed Bath & Beyond, and although it suffered a setback due to operational issues, it remained focused on long-term strategy and execution. “As we move into 2022, the investments we are making in our supply chain and technology foundation are designed to dramatically improve our efficiencies, enabling us to overcome the kinds of challenges we currently face.” He added that the core tenants of the company’s strategy are sound.