U.S. markets close in 3 hours 29 minutes
  • S&P 500

    -3.24 (-0.08%)
  • Dow 30

    -216.48 (-0.63%)
  • Nasdaq

    +0.09 (+0.00%)
  • Russell 2000

    -7.99 (-0.42%)
  • Crude Oil

    +1.64 (+2.04%)
  • Gold

    +54.40 (+3.09%)
  • Silver

    +0.97 (+4.47%)

    +0.0095 (+0.91%)
  • 10-Yr Bond

    -0.1400 (-3.78%)

    +0.0190 (+1.58%)

    -2.7240 (-1.97%)

    +204.12 (+1.22%)
  • CMC Crypto 200

    -4.31 (-1.06%)
  • FTSE 100

    -14.56 (-0.19%)
  • Nikkei 225

    +257.09 (+0.92%)

Bed Bath & Beyond to Revitalize Stores on Turnaround Efforts

Bed Bath & Beyond Inc. BBBY provided a strategic update on the business transformation efforts. To stabilize and drive top-line growth, the company aims a rapid refresh of around 160 namesake stores before 2019 holiday season. It expects this multi-million-dollar investment in physical developments to be evident to the consumers and positively impact the in-store shopping experience in near term. 

Moreover, the company anticipates an aggressive inventory reduction of up to $1 billion over the next 18 months, with the removal of older surplus inventory from its stores in advance of holiday season 2019. This will help it to reset inventory faster in both stores and distribution centers.

Further, Bed Bath & Beyond plans to shut underperforming stores or relocate stores over the next couple of years to yield benefit of heavy lease expiration cadence. This move will increase the company’s sales and profitability, on a per-store basis. Moreover, its cost savings, reduction of corporate workforce and other short-term actions are projected to reduce cost by $10 million, which will improve margins.

These updates clearly indicate that the company is on track with its transformation plan, positioning it well for success in a dynamic retail landscape. In first-quarter fiscal 2019, management set four major near-term priorities – stabilize and boost top-line growth; reset the cost structure; review and optimize its asset base with its portfolio of retail banners as well as refine the organization structure for the execution of the transformation plan.

Additionally, the company continues to target reaching mid and long-term revenue growth, near-term gross margin expansion, near-term SG&A improvements and sustainable outstanding operational support. It expects to boost revenue growth by focusing on portfolio strategy alignment, including product assortment, customer engagement, learnings from Next Generation Lab stores and expanded online experience.

Bed Bath & Beyond is in the process of strategically expanding its store count apart from increasing productivity of existing stores by adjusting the breadth and depth of its merchandise offerings to suit customer preferences. In first-quarter fiscal 2019, the company opened three stores and remodeled more than 40 existing outlets. Majority of the remodeled outlets were the Next Generation Lab stores. In the long run, it expects to operate more than 1,300 Bed Bath & Beyond stores across the United States and Canada, and also plans to expand other concepts from coast to coast. Moreover, the company remains focused on expanding, renovating and relocating stores to adapt to the changing market conditions.

We hope that the company’s strategic efforts have the potential to bring it back on growth trajectory. Notably, this Zacks Rank #3 (Hold) stock has slumped 26.5% in the past three months, underperforming the industry’s decline of 23.2%.

Key Picks

Hibbett Sports HIBB has a long-term earnings growth rate of 10.9% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Regis Corporation RGS, also with a Zacks Rank #1, has delivered positive earnings surprise in the trailing three quarters.

Office Depot ODP delivered average positive earnings surprise of 19.4% in the trailing four quarters. It has a long-term earnings growth rate of 11.1% and a Zacks Rank #2 (Buy).

It’s Illegal in 42 States, But Investors Will Make Billions Legally

In addition to the companies you read about above, today you get details on the newly-legalized industry that’s tapping into a “habit” that Americans spend an estimated $150 billion on every year.

That’s twice as much as they spend on marijuana, legally or otherwise.

Zacks special report revealing how investors can profit from this new opportunity. As more states legalize this activity, the industry could expand by as much as 15X. Zacks’ has just released a Special Report revealing 5 top stocks to watch in this space.

See these 5 “sin stocks” now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Office Depot, Inc. (ODP) : Free Stock Analysis Report
Hibbett Sports, Inc. (HIBB) : Free Stock Analysis Report
Regis Corporation (RGS) : Free Stock Analysis Report
Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research