UNION, N.J.–Robust gains in sales and margins boosted Bed Bath & Beyond’s second-quarter net income to $229.4 million, 26 percent ahead of the second quarter of last year.
Net sales finished the quarter, which ended on Aug. 27, at $2.3 billion, up 8.3 percent over last year’s second quarter. This included a gain in same-store sales of 5.6 percent, on top of Bed Bath’s same-store increase of 7.4 percent in the second quarter of a year ago. Gross margin rose 15 basis points to 41.1 percent.
In a note on the results, Brad Thomas, retail analyst with Keybanc Capital Markets, said, “The company continues to execute at a high level with solid sales growth and enviable margin expansion despite mix and inflationary headwinds.” Thomas said the results on both the top and bottom lines exceeded expectations of both Wall Street and even Bed Bath’s management. He added that Wall Street expectations were for a 20 basis-point decline in gross margin.
The home specialty retailer was also able to keep expenses in line. Selling, general and administrative expenses were relatively flat on a dollar basis and dropped 201 basis points as a percentage of sales, to 25 percent.
Thomas said Bed Bath expects third-quarter net sales to rise in the range of 5 to 7 percent, with comp-store sales up 2 to 4 percent. For the fourth quarter, sales are projected for an increase of 4 to 6 percent, with same-store sales rising 2 to 4 percent.