UNION, N.J., Oct. 28, 2020 /PRNewswire/ -- Bed Bath &
Beyond Inc. (NASDAQ: BBBY) will host its first Investor Day this
morning to unveil the details of a comprehensive strategy to unlock
growth and drive significant shareholder value as it rebuilds
authority in the Home, Baby and Beauty & Wellness markets. The
Company will also provide a three-year financial roadmap and
capital allocation framework to deliver strong and sustainable
total shareholder return.
Mark Tritton, President and CEO,
said, "We have made tremendous progress this year to strengthen our
financial position, focus our portfolio in core Home, Baby, Beauty
& Wellness markets, rebuild our executive team, and launch a
series of omnichannel services to win back customers. We will
build on these strong foundations with a three-year growth strategy
that further elevates the shopping experience, modernizes our
operations, and unlocks sales growth, margin expansion, increased
cash flow and strong and sustainable total shareholder return. Our
transformation is rooted in an omni-always, customer-inspired
approach that will make it easy to feel at home with Bed Bath &
Beyond. In doing so, we will deepen our relevance and
connection with customers by helping them unlock the magic in every
room."
The Company's growth strategy will harness the power of data and
insights to engage customers across its core portfolio in an
enterprise-wide plan to accelerate its omnichannel transformation.
During today's Investor Day meeting, the Company will discuss the
key initiatives supporting its strategy, including the
following:
Delivering on our Promise to inspire customers to Unlock
the Magic in Every Room.
With a large customer base of 37 million, one in 5 homes in the
U.S., is a Bed Bath & Beyond home. The addition of 1.4
million new customers to the brand year to date highlights the
Company's strong potential to attract, retain and drive spend
across the Home category. As part of its strategic growth
plans, Bed Bath & Beyond will launch a clear customer value
proposition to deepen connections with five core customer segments:
the nester; the minimizer; the juggler; the innovator; and the
creative. In addition, the Company will develop an
enterprise-wide strategy to unlock value across its core brands in
the Home, Baby, Beauty & Wellness markets, including plans for
a reinvented loyalty program to deepen its customer relationship
and motivate increased shopping across categories, channels and
banners.
Curating a differentiated Product assortment to capture
market share.
By completely resetting its assortment, Bed Bath & Beyond
will provide a more curated, inspirational and differentiated
product collection across categories. Over the next 18
months, Bed Bath & Beyond expects to launch over 10 new owned
brands in key destination categories with the goal of tripling the
penetration of owned brands within its assortment over three years.
At the same time, the Company will create opportunities for market
share growth by increasing the availability of opening price points
and value-tier products, while also elevating the customer
experience in destination rooms, to provide ease and inspiration
in-store and online. In addition, the Company is on track to
deliver approximately $200 to
$250 million in sourcing benefits
over the next three years by reducing the number of suppliers and
successfully negotiating with existing vendors. The Company is also
moving away from its former de-centralized inventory management
approach to create an omni-always, centralized ordering and
replenishment system that is expected to ensure higher in-stock
levels, increased sales and long-term productivity
improvements.
Offering a clear and compelling Price-value proposition to
increase relevance with customers while driving productivity and
cost savings.
Bed Bath & Beyond will continue to improve its base price
competitiveness across key categories while also addressing
assortment gaps in value tiers, to help the Company compete better
with mass retailers and attract new customers to the business. The
Company will use data and insights to build discipline into the use
of promotions, to increase return on investment and remove
ineffective promotional activity. In addition, the Company
will continue to improve the communication of value across
channels, including more compelling value at first glance for
customers.
Leveraging our stores as a strategic asset in an omni-always
Place growth strategy that delivers fast and convenient shopping
for our digital-first customers.
Bed Bath & Beyond will continue to create a more
inspirational, omni-always digital and in-store shopping
experience, building on the recent launch of Buy-Online-Pickup
In-Store (BOPIS), Curbside Pickup and Same Day Delivery services
which have helped convert more than 2 million customers to shop
more than one channel this year. The Company will elevate the
customer experience to drive conversion, unlock omni-always
services to inspire more customers to shop across channels, and
transform to a digital first culture to acquire new
customers. The Company also plans to invest significantly in
its store fleet to make shopping easy and inspiring, as part of an
overall store optimization program. The store remodel plan
includes investments of approximately $250
million over the next three years across approximately 450
stores which represent approximately 60% of revenue. This
test and learn approach is expected to generate a median sales lift
of approximately 4% and deliver a double-digit return on
investment. As previously disclosed, the Company is moving
quickly to right-size its store network and is on track to close
approximately 200 Bed Bath & Beyond stores by 2021 and expects
to generate annualized EBITDA savings of approximately $100 million. Separately, as part of the
Company's strategy to build authority in the Baby market, the
Company expects to grow its physical footprint with additional
stores in new markets and increase sales by 50%, to approximately
$1.5 billion, by fiscal 2023.
Modernizing operational Proficiencies to deliver a
technology-powered foundation to support sustainable growth,
improved margins and greater cash generation.
Bed Bath & Beyond will improve its operational proficiencies
to support a more agile, customer-centric approach. The
end-to-end modernization of its supply chain and technology
capabilities are expected to deliver significant operational
efficiencies. The Company expects to invest approximately
$250 million over the next three
years to reinvent its supply chain, and pivot from a
consolidation-based model to a modernized distribution network that
is faster, more competitive and responsive to the market. The
Company will also invest approximately $250
million over the next three years to drive modernization and
innovation in its technology platforms, leveraging a strategic
partnership with Google Cloud and other leading technology
providers.
Unlocking a virtuous cycle to deliver sustainable value
creation.
The Company's strategic plan and disciplined investments are
expected to deliver an improved customer experience and accelerate
sales and margin growth, as well as unlock significant cash flow
generation and drive strong and sustainable total shareholder
return. During the meeting today, Bed Bath & Beyond will
discuss a three-year financial roadmap which includes several
performance metrics including sales, gross margin, EBITDA, return
on invested capital, inventory position, gross debt and total
return to shareholders. Please refer to the "Outlook" section
below for further details on these performance metrics. The Company
will also discuss its capital allocation principles, which include
investing for growth and transformation, ensuring financial
resilience, and returning cash to shareholders. In a separate
announcement today, Bed Bath & Beyond announced that it has
launched a $225 million accelerated
share repurchase, as part of an authorized share repurchase program
totaling up to $675 million over the
next three years.
Outlook
During Bed Bath & Beyond's Investor Day meeting today, the
Company will outline a three-year financial roadmap to strengthen
and accelerate growth and drive strong and sustainable total
shareholder return. Starting from a position of strength and
agility in fiscal 2020, the Company expects over the next three
years to gradually improve sales while driving gross margin
expansion and EBITDA.
Summary of Three-Year Financial Roadmap, Fiscal Years 2021, 2022
and 2023:
|
Fiscal Year
2021*
|
Fiscal Year
2023*
|
Comp
sales
|
Stable (Q1 non-comp;
Q2-Q4 stable vs strong 2020 base)
|
Low- to mid-single
digit growth
|
Gross
margin
|
~35%
|
38%+
|
EBITDA
|
$500
million+
|
$850 million to $1.0
billion
|
EBITDA
margin
|
Mid-single
digit
|
High-single to
low-double digit
|
Inventory
|
$1 billion reduction
at retail vs. fiscal year 2019
|
3.5x+ inventory
turnover
|
Gross debt/EBITDA
ratio
|
<3.5x
|
<3.0x
|
Capital
investments
|
$1.0 billion to $1.5
billion (cumulative)
|
Free cash flow
(3-year period)
|
$0.5 billion to $1.0
billion
|
Share
repurchases
|
Up to $675 million
total repurchase program
|
*Fiscal Years 2021 and 2023 are periods ending February 26, 2022 and February 24, 2024, respectively
Bed Bath & Beyond's Fiscal 2020 Virtual Investor
Day
- When: Wednesday, October 28,
2020
- Time: 9:00 a.m. EDT
- Webcast:
https://2020virtualinvestorday.bedbathandbeyond.com/investor-day-2020.
Those interested in participating in the day, are invited to
pre-register via this link. A replay of the webcast and the
slide presentation will be available after the meeting on the
investor relations section of the Company's website at
http://bedbathandbeyond.gcs-web.com/investor-relations.
- For additional information, please feel free to contact
Investor Relations at IR@bedbath.com.
About the Company
Bed Bath & Beyond Inc. and
subsidiaries (the "Company") is an omnichannel retailer that makes
it easy for our customers to feel at home. The Company sells a wide
assortment of merchandise in the Home, Baby, Beauty and Wellness
markets. Additionally, the Company is a partner in a joint venture
which operates retail stores in Mexico under the name Bed Bath &
Beyond.
Forward Looking Statements
This press release
contains forward-looking statements, including, but not limited to,
the Company's progress and anticipated progress towards its
long-term objectives, plans with respect to potential asset sales,
as well as more generally the status of its future liquidity and
financial condition. Many of these forward-looking statements can
be identified by use of words such as may, will, expect,
anticipate, approximate, estimate, assume, continue, model,
project, plan, goal, and similar words and phrases, although the
absence of those words does not necessarily mean that statements
are not forward-looking. The Company's actual results and future
financial condition may differ materially from those expressed in
any such forward-looking statements as a result of many factors.
Such factors include, without limitation: general economic
conditions including the housing market, a challenging overall
macroeconomic environment and related changes in the retailing
environment; risks associated with COVID-19 and the governmental
responses to it, including its impacts across the Company's
businesses on demand and operations, as well as on the operations
of the Company's suppliers and other business partners, and the
effectiveness of the Company's actions taken in response to these
risks; consumer preferences, spending habits and adoption of new
technologies; demographics and other macroeconomic factors that may
impact the level of spending for the types of merchandise sold by
the Company; civil disturbances and terrorist acts; unusual weather
patterns and natural disasters; competition from existing and
potential competitors across all channels; pricing pressures;
liquidity; the ability to achieve anticipated cost savings, and to
not exceed anticipated costs, associated with organizational
changes and investments, including the Company's strategic
restructuring program; the ability to attract and retain qualified
employees in all areas of the organization; the cost of labor,
merchandise and other costs and expenses; potential supply chain
disruption due to trade restrictions, and other factors such as
natural disasters, pandemics, including the COVID-19 pandemic,
political instability, labor disturbances, product recalls,
financial or operational instability of suppliers or carriers, and
other items; the ability to find suitable locations at acceptable
occupancy costs and other terms to support the Company's plans for
new stores; the ability to establish and profitably maintain the
appropriate mix of digital and physical presence in the markets it
serves; the ability to assess and implement technologies in support
of the Company's development of its omnichannel capabilities; the
ability to effectively and timely adjust the Company's plans in the
face of the rapidly changing retail and economic environment,
including in response to the COVID-19 pandemic; uncertainty in
financial markets; volatility in the price of the Company's common
stock and its effect, and the effect of other factors, including
the COVID-19 pandemic, on the Company's capital allocation
strategy; risks associated with the ability to achieve a successful
outcome for its business concepts and to otherwise achieve its
business strategies; the impact of intangible asset and other
impairments; disruptions to the Company's information technology
systems including but not limited to security breaches of systems
protecting consumer and employee information or other types of
cybercrimes or cybersecurity attacks; reputational risk arising
from challenges to the Company's or a third party product or
service supplier's compliance with various laws, regulations or
standards, including those related to labor, health, safety,
privacy or the environment; reputational risk arising from
third-party merchandise or service vendor performance in direct
home delivery or assembly of product for customers; changes to
statutory, regulatory and legal requirements, including without
limitation proposed changes affecting international trade; changes
to, or new, tax laws or interpretation of existing tax laws; new,
or developments in existing, litigation, claims or assessments;
changes to, or new, accounting standards; foreign currency exchange
rate fluctuations; and the other factors summarized in the
Company's reports filed with the U.S. Securities and Exchange
Commission. The Company does not undertake any obligation to update
its forward-looking statements.
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SOURCE Bed Bath & Beyond Inc.