UNION, N.J. — Supply chain woes, lack of inventory and a drop in consumer demand took a serious toll on Bed Bath & Beyond’s top and bottom lines in the fourth quarter.
Net sales in the quarter ended Feb. 26 dropped 22% to $2.05 billion compared to $2.61 billion in the prior-year period, and the company reported a loss in net income of $159 million.
Comp store sales declined 12% compared to Q4 2020, and 8% compared to Q4 2019. Core sales performance versus last year were primarily driven by a decrease in Bed Bath & Beyond banner sales, the company said.
Key categories such as bedding, bath, kitchen, food prep, indoor décor and home organization were particularly hard hit. Sales in those categories declined 17% compared to the parallel time period in 2020, and were down 5% compared to 2019. Those categories represent two-thirds of total Bed Bath & Beyond banner sales in the fiscal 2021 fourth quarter.
Digital sales declined 18%, which the company attributed to “normalizing demand.”
In a statement, CEO Mark Tritton said, “We are disappointed that our sales and gross margin performance does not reflect our team’s hard work and execution against both strategic and transformation efforts in 2021.
“Macroeconomic factors, such as the disruption of the global supply chain, the Omicron variant, as well as the geopolitical turbulence weighing on consumer confidence, have uncovered more vulnerabilities than we could have foreseen at this stage of our transformation, as we completely rebuild the foundation of our business.
“The lack of available inventory to sell proved to be a continuing impediment to sales through the remainder of the fourth quarter and into the early part of fiscal 2022. Specifically, despite our overall inventory levels, product in transit, not available for sale or held at port remained abnormally high, particularly in key items.”
The lack of in-stock availability cost the company approximately $175 million in fourth-quarter sales, according to Tritton.
Tritton also noted that fiscal 2021 was a rebuilding year for Bed Bath & Beyond, and although it has suffered a setback because of operational issues, it remains focused on long-term strategy and execution. “As we progress through 2022, the investments we are making in our supply chain and technological foundation are designed to greatly improve our proficiencies, enabling us to overcome the types of challenges we are facing currently.” The core tenants of the company’s strategy are sound, he added.