Some of those changes include revamping stores, rightsizing the real estate footprint, and investing in e-commerce. Long story short, a new management team led by the widely-respected Mark Tritton - who was the former chief merchandise officer at Target (NYSE: TGT) - has come in and changed everything in order to help Bed Bath & Beyond turn into the preferred omni-channel destination for home goods. More important than the improving external conditions, the internal operating environment at Bed Bath & Beyond has markedly improved over the past few quarters - and will only continue to rebound into 2021. Of course, this sustained sales rebound will provide continued support for BBBY stock. As consumer spending continues to recover over the next few quarters, Bed Bath & Beyond’s sales trends will follow suit. Net sales at the home goods retailer dropped 49% YOY in the first quarter of 2020, but they declined just 1% YOY in Q2.Įxternal conditions will continue to improve for Bed Bath & Beyond, mostly because consumers, businesses and legislators alike are only getting better and better at the Covid-19 balancing act. The backbone of this recovery has been a strong and steady rebound of consumer spending, which today sits only 5% lower year-over-year (versus a 41% drop in late March).Īs consumer spending has rebounded, Bed Bath & Beyond’s sales trends have increased, too. Thanks to these innovative adaptations, the world has been able to reduce the negative impact of the virus over the past few months, while also undergoing a healthy economic recovery and progress towards normalcy. Restaurants are open, but they’re mostly restricted to outdoor dining. Stores have reopened, but they’re enforcing social distancing rules. We’ve gone back outside, but we are wearing masks. Since then, however, the world has adapted to the pandemic. When the Covid-19 pandemic first struck back in March, consumer spending dried up as everyone stayed at home and stopped doing things. The external environment surrounding Bed Bath & Beyond has steadily improved over the past few months and will continue to do so for the foreseeable future. ![]() Within the next few years, I believe that it can soar close to $40. At the same time, the retailer’s management will keep doing everything right for the foreseeable future to improve Bed Bath & Beyond’s value proposition, relevance and profitability.Ĭonsequently, despite its 600%-plus rally over the past seven months, BBBY stock will keep pushing higher. ![]() That’s partly because consumer spending has risen since then and partly because Bed Bath & Beyond’s management is doing everything right to turn this sinking ship around.Ĭonsumer spending is only going to keep improving into 2021.
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