Will Bed Bath & Beyonds Improved Performance Be Enough To Catch Competitors?
Those bags are getting a little bigger at remodeled stores so far. (Photo by Kevork ... [+] Djansezian/Getty Images) Getty Images  After its fourth straight quarter of improved financial performance, fewer and fewer observers are adding a fourth B  for bad  to Bed Bath & Beyond. As it proved with strong numbers released this morning, those bad old days have passed and the big box home furnishings retail chain has made enormous progress in its ongoing turnaround. Top line revenue growth of 49% over a year ago  a quarter when most of its stores were closed and most of its sales were coming from a still developing digital side  and adjusted earnings for its core business of .05 cents a share versus a loss a year ago were good indicators that the turnaround being managed by a totally new management led by CEO Mark Tritton is showing strong results. So too were improvements in its gross margins, EBITDA and percentage of sales done through omnichannel and online formats, the latter now representing 38% of its total revenue for the quarter. Both its cornerstone merchandise classifications and its buybuyBaby nameplate performed well too and overall it beat the analysts consensus forecast on its top line. All of which caused the company to take up its forecast for the balance of the year from flat to low single digits, a significant goal given the number of stores it is in the process of closing, 200 over a three-year period. The company still showed a loss for the quarter of 48 cents (versus a loss of $2.44 a year ago) and its adjusted profit, reflecting just its retained store divisions, did miss the consensus forecast by three cents a share. And the companys guidance going forward is not as strong as some competitors. Tritton, in an interview, defended the companys performance in the positive, exuberant style that is rapidly becoming his trademark. Remembering back to several years of deteriorating performance under prior management, he said, You have to crawl before you can walk. We are happy with what weve achieved and exceeded the previous guidance weve issued. We feel good about our three-year plan.  He said the companys remodeling program  150 stores targeted this year  is on schedule, including the reopening of its flagship location in the Chelsea neighborhood of Manhattan next month. The limited number of stores that have been remodeled so far, many in the Houston market, have exceeded plan he said, with average purchases up and positive customer reaction. He also pointed to the Baby division as picking up traction with business up 20% for the quarter, compared to a year ago when its stores remained open. Other initiatives that are part of the new strategy include the roll-out of private owned brands, now up to six and counting; the retailers first sustained TV ad campaign centered around the Home happier theme that will continue on a spot basis; and its ongoing stock repurchase program, totaling $130 million for the quarter. Bed Bath will continue to deal with falling top line numbers reflecting its divestiture of a slew of marginal nameplates as well as the odd position of being caught up in day-trading speculation driven by social media that has seen several severe spikes in its share price this year. Tritton says be patient, it was a rather large hole the company had to dig itself out of. He says, in a way, it focused attention on BBB that might not have been there otherwise. After they took a closer look at the company some investors ended up liking what they saw and are sticking around. Quarter-by-quarter we are delivering what we said we would.