Bed Bath & Beyond Bucks the Trend, Opens New Stores
Bed Bath & Beyond (NASDAQ:BBBY) has been on a tear in recent months, and its stock is trading near its 52-week high. While investors will have another month before its Q3 earnings are reported, it’s worth noting that the company has fared well during the past year when compared to other retailers such as Abercrombie & Fitch (NYSE:ANF). The company’s balance sheet shows relatively consistent growth, considering the sluggish economy and the cautious consumer. While many retailers have been forced to close some stores, Bed Bath & Beyond has bucked the trend—opening new stores and increasing its square footage of store space.
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New Store Openings This Year
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In the first half of this year, the company opened six new Bed Bath & Beyond (BBB) stores, seven buybuy BABY stores and four Christmas Tree Shops. Those 17 new store openings come against the backdrop of three store closings—two BBB stores and one Harmon store, according to company filings. In addition, it opened five new stores of BBB and its baby store combined early in the third quarter. [1] The BBB brand constitutes 76% of the company’s stock price according to Trefis estimates. The Christmas Tree Shops constitute 12% of the stock, and buybuyBABY constitutes 10% of the company’s stock.
Worth mentioning is Bed Bath & Beyond’s expansion into Mexico. In a joint venture, the company has two stores called Home & More. Depending on sales there, the company could seek to expand there and would have another consumer base to tap into. In addition, the company is opening up an e-commerce fulfillment center in Georgia, creating 900 jobs, according to a release by the governor. It is investing $50 million in the center. [2]
Company Continues To Repurchase Shares
Another good sign is the company’s continual repurchase of its shares. In the first half of the year, the company purchased 10 million shares of its stock, for a total cost of $532 million. Bed Bath & Beyond continues to focus on customer service, offering a range of different products, and new products, at low prices, according to the company. [1] And it seems to be working.
Economic Challenges Face Company
However, the company admitted in its latest filing with the SEC that it “continues to face a number of economic challenges impacting consumer confidence and spending, including relatively high unemployment and commodity prices and a sluggish housing market. The Company cannot predict whether, when or the manner in which these economic conditions will change.” [1] But even in these tough economic times, the company is showing growth. That, in itself, shows that the company’s strategy has been working.
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Notes:- Bed Bath & Beyond Inc. Reports Results for Fiscal Second Quarter, Company Press Release [↩] [↩] [↩]
- Bed Bath & Beyond Inc. to create up to 900 Jobs in Jackson County, Georgia Governor’s Office [↩]