Bed Bath & Beyond gets a lift from people sprucing up their homes in the pandemic
New York(CNN Business) Bed Bath & Beyond is getting a boost from shoppers decorating their homes instead of traveling, going out for dinner or going to the movies in the pandemic.
The retailer said Thursday that sales at stores open for at least one year grew 6% during the three months ending August 29, compared with the same stretch last year. It was the first quarter that the number grew at Bed Bath & Beyond (BBBY)in four years.
"During this unprecedented time when our homes have become the center of our lives, we are well placed as customers spend more in their home and lifestyle," CEO Mark Tritton said on a call with analysts Thursday.
Bed Bath & Beyond's stock rallied around 25% during early morning trading on the strong results.
The company, which also operates BuyBuy Baby, Christmas Tree Shops and Harmon Face Values, has struggled in recent years against Amazon (AMZN), direct-to-consumer brands and big box chains like Target (TGT) and Walmart (WMT).
Bed Bath & Beyond announced in July that it would close roughly 200 stores over the next two years. The chain also said last month that it would eliminate 2,800 jobs.
Bed Bath & Beyond temporarily closed down stores in March because of the pandemic and said sales fell until stores began reopening in late May.
Shifting shopping trends over the summer helped the chain rebound. Home furnishings, such as kitchenware, furniture and wall decor, make up around 65% of the retailer's sales, and these areas have been in high demand as people spend more time at home.
Bed Bath & Beyond was "helped in part by the favorable home-related spending environment," Peter Benedict, analyst at Robert W. Baird and Co., said in a note to clients Thursday.
Across the industry, sales of small appliances were up 24% and housewares were up 28% in the three months ending in August, market research firm NPD Group said in a research report last month.
Other kitchen and home furnishings' chains, including Williams-Sonoma (WSM) and Big Lots (BIG), have reported strong sales growth in recent months, while Target and Walmart have highlighted their home goods' strength in the pandemic on earnings calls with analysts.
Bed Bath & Beyond also got a lift from shoppers buying online. The company said digital sales grew 89% last quarter, including a spike in curbside pickup orders.
Despite the strong quarter, analysts are not yet ready to say Bed Bath & Beyond has completed a turnaround.
"Bed Bath & Beyond remains a work-in-progress," Cristina Fernandez, analyst at Telsey Advisory Group, said in a note to clients.
Bed Bath & Beyond's profit was $217.9 million in its latest quarter. The company reported a $138.7 million loss during the same quarter last year.
The company's net sales fell 1% to $2.7 billion in the quarter.
