MW Bed Bath & Beyond's new parent company says it's still working on winning back repeat customers
By Bill Peters
Retailer is taking steps to 'acquire customers with a higher probability of repeat behavior'
Shares of Beyond Inc. - the parent of Overstock and Bed Bath & Beyond - fell after hours on Monday, after the online retail company reported a deeper-than-expected loss and said it was trying to draw more committed customers amid still-wobbly furniture and home-goods demand.
Beyond $(BYON)$ reported a first-quarter net loss of $72.2 million, or $1.62 a share, compared with $10.3 million, or 23 cents a share, in the same quarter last year. Beyond's adjusted loss per share was $1.22.
Revenue was up 0.3% year over year to $382 million.
Both the top- and bottom-line figures missed estimates. Analysts polled by FactSet expected a loss of 87 cents a share, on revenue of $389 million.
Shares fell 7.9% after hours on Monday.
Beyond reported the results as investors await a firmer rebound in furniture and home-goods demand, after the pandemic's home-renovation boom ran up against the economy's reopening and then higher prices for food and other basics. The online retailer also reported as it tries to make something out of the demise of Bed Bath & Beyond's physical stores last year, and in the wake of a recent relaunch of Overstock.com and its purchase of assets from flash-sale site Zulily.
Overstock snapped up some of Bed Bath & Beyond's intellectual property last summer - including its website domains - and changed its name to Beyond in November. Beyond, in February, brought in new leaders for Bed Bath & Beyond and Overstock, and has been investing in personalizing how its customers shop.
On Monday, Beyond said that active customers during the first quarter jumped 26% year over year to 6 million. Orders delivered rose 27% to 2.2 million. But executives said there was more work to do, particularly in attracting repeat customers and trimming costs.
"We're pleased with the growth in active customers and transactions during the quarter," Adrianne Lee, Beyond's chief financial and administrative officer, said in a statement. "However, in analyzing the profitability of that growth, we are making the strategic decision to focus on investments to launch these brands and acquire customers with a higher probability of repeat behavior."
"We will be investing prudently to build our brands for sustainable growth, not transient, transactional growth, and have stood up internal processes to enable our teams to evaluate decisions through the lens of investment return," Lee said. "We believe this will help drive our long-term success and improve shareholder returns."
She said that Beyond was "halfway through" a plan outlined in the prior quarter to cut $45 million in costs.
"We believe these actions, in combination with soft-launching Overstock and soon Zulily, will yield sequential improvements in our margin profile," she said.
Sales at furniture stores are were down during the first three months of this year, according to government data.
But the most recent quarterly results from luxury furniture chain RH $(RH)$ sent shares higher, as it tries to get out from under what management called "the most challenging housing market in three decades." Some analysts were still skeptical.
Wayfair Inc.'s (W) stock jumped last week following its own quarterly results. The company said its first quarter ended "on an upswing." But executives, during the call, noted that spending on home furnishings was still inconsistent.
"We know that eventually, the need reverts as life goes on," Wayfair Chief Financial Officer Kate Gulliver said on the company's earnings call. "People get married. They have kids. Kids move out. The need for home furnishings never goes away, and over time, the category will rebound and return to its typical pattern of growth."
-Bill Peters
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 06, 2024 19:08 ET (23:08 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments