(Reuters) – Bed Bath & Beyond Inc BBBY.O on Thursday posted a surprise quarterly profit and its first comparable sales growth in nearly four years, boosted by strong online demand for home furnishing and decor, sending its shares up 17%.
Same-store sales jumped 6% for the second quarter ended Aug. 29, compared with a 1.78% drop estimated by analysts, according to IBES data from Refinitiv, largely helped by an 89% surge in online sales.
The retailer had been struggling to keep pace in a rapidly shifting retail landscape before the pandemic, prompting Chief Executive Officer Mark Tritton to focus more on the company’s online portfolio after taking charge last year.
“The marked improvement in our second quarter financial results reflects the potential of our digital-first, omni-always transformation,” Tritton said in a statement.
The company has benefited from consumers buying new furnishing and home decor online as many are expected to continue working from home and as several school and college begin classes online.
Gross margins also improved 1,000 basis points to 36.7%, driven by improved products prices, lower coupon expenses and fewer markdowns.
The company posted adjusted profit of 50 cents per share, while analysts were expecting a loss of 23 cents per share.
It reported net income of $217.9 million, compared with a loss of $138.8 million a year earlier. Net sales fell 1.2% to $2.69 billion, but beat estimates of $2.60 billion.
Reporting by Nivedita Balu in Bengaluru; Editing by Anil D’Silva