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Bed Bath & Beyond to invest $1 billion on share buybacks, debt reduction and store upgrades

Shoppers exit a Bed Bath & Beyond store in New York.

Michael Nagle | Bloomberg | Getty Images

Bed Bath & Beyond said Tuesday it plans to spend about $600 million this fiscal year on share repurchases and debt reduction, and up to $400 million on store remodels and supply chain upgrades. 

Its shares were down less than 1% in after-hours trading on the news. 

This is breaking news. Please check back for updates. 

The retailer earlier Tuesday morning announced it had agreed to sell its PersonalizationMall.com business, known for selling gifts for special occasions and holidays, to 1-800-Flowers.Com for $252 million. Its shares had shot up more than 5% on the news. 

It said the deal, which is expected to be completed during the first quarter of fiscal 2020, was part of its strategy to focus more on its core home, baby and beauty businesses. 

Bed Bath & Beyond said it would continue to assess the future of its other retail brands, such as Christmas Tree Shops, World Market and buybuy Baby, and real estate. It has roughly 1,500 locations under various banners.

Last month, Bed Bath & Beyond said it has completed a sale-leaseback transaction with an affiliate of Oak Street Real Estate Capital, netting it $250 million in proceeds.

The real estate deal marked one of the first moves of the company’s new CEO, Mark Tritton, who just took the reins in November. Before joining Bed Bath & Beyond, Tritton was the chief merchandising officer at Target, where he played a role in launching some of Target’s most successful in-house brands.

After a disappointing holiday season, Tritton knows he still has plenty of work ahead of him to turn the business around.

Last week, Bed Bath & Beyond said sales during the first two months of its fiscal fourth quarter were hurt by heightened promotions, falling store traffic and inventory management issues. Same-store sales during November and December dropped 5.4%.

The report ignited fears on Wall Street that a turnaround with Tritton is going to take longer than initially anticipated.

“We believe reinvesting transaction proceeds in stores, marketing, and supply chain will undoubtedly help, though recent December/January results reaffirm our view that the scope of the turnaround is broad and may require longer than bulls believe,” Jefferies analyst Jonathan Matuszewski said Tuesday in a note to clients. 

Bed Bath & Beyond shares have fallen more than 30% over the past 12 months. The stock is also down more than 30% year to date. The company has a market value of about $1.5 billion. 

Bed Bath & Beyond is set to report its fourth-quarter and full-year earnings on April 15, after market close. 

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