20230930-DK-Butterfly-1 (BBBYQ) 7 Jan 212020 Q3 Earnings call transcript

Welcome to the Bed Bath & Beyond Fiscal 2020 Third Quarter Earnings Call. All participants will be in a listen-only mode until the Q&A portion of the call. Today's conference call is being recorded. A rebroadcast of the conference call will be available via webcast found on the Company's Investor Relations website. At this time, I would now like to turn the conference over to Janet Barth, Vice President of Investor Relations. ahead. go Please

good third and Welcome our to Thank earnings morning call. XXXX quarter fiscal you everyone.

On with Gustavo Tritton; John Chief Officer the CEO, President Hartmann; Financial and call and Officer, Officer us and today Chief and Rafeh buybuy Treasurer, of Arnal; Digital Operating President Chief BABY, is Masood. Mark

website release as Form Investor let can X-K ahead be presentation to me begin, our Relations we performance slide including of you company's our filed contain refer just conference that to, call and fiscal of the statements, in and This SEC the refer we statements to or say Form long-term at models XXXX periodic section this and internal the and statements forward-looking Before remind we references regarding third exhibits call. section from that our Report forward-looking about or the or slides detail quarter outlook Annual www.bedbathandbeyond.com could any and our may differ the and risks undertakes actual our earnings in All Risk these on during what including revise on call our uncertainties objectives. materially subject the The obligation risks uncertainties, to to Please Factors company most statements. results recent to no update for XX-K. cause we to are such found filings more today.

generally or are that adjustments accepted with the will we amounts information measure directly in prepared to discuss today exclude contains subject the principles. most in amounts measures have Additionally, of included financial the certain that accounting are excluding effect accordance comparable that

today. accordance release an is to to table to now over pleasure our and available the turn in our filed most our to my It as in with please GAAP, refer press call reconciliation the to X-K included For the on Mark. website Form earnings exhibit comparable measures a presented

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our of quarter execute have Firstly, we through comparable delivered digital-first, strong to growth margin continue a strategy management. sales on and second EBITDA and omni-always consecutive

to they wherever profitable and our responded customers digital our growing we to omni-capabilities our grow growth Secondly, accelerate us, needed customer base.

banner continue liquidity, These drove of plan fiscal already we And start an final while strengthen position help on the non-core with fourth strong with XXXX fiscal our more XXXX and fund to our and set positive generation. balance a Thirdly, and a sheet overall focused we while debt reducing businesses. to us quarter. efforts monetization cohesive transaction in put in set close transformation will also completed optimizing to costs driving flow we results, significantly business our cash remain ensuring core

with recent for Kitchen improving Bath NPD both and sales market share been favorable data also in have Month-by-month, Bed reflected the the we in achieved most encouragingly, trends market. be we differentials our share starting in market to October And categories. and in are data. Our the November, results share minimizing versus gains category

improvement strategy to continues our market take as continued hold. see in to trends, expect We share

very in a well wedding to get such Additionally, strong market continue married. when back getting we to leader share strength moments, important are positioned celebrating as show where life as believe market we registry, we we

despite of been headwinds this this has achieved of quarter COVID-XX. the All significant

our the and quarter the During to including and will and results our XXXX. And provide quarter our outlook plans today, will buybuy our our then quarter progress Rafeh invest from Chief speak perspective a President, some digital-first operations, Then close about then stores customer Officer, call Gustavo on John our and fourth Arnal, Chief third review Officer and BABY, and the Financial financial Hartmann, will Digital perspective. for Chief Operating on Treasurer, Officer remaining for in portfolio. fiscal do underperforming Masood, same our

take will We Gustavo? then questions.

two morning, good will and cover Today, I Mark, topics. you, Thank key everyone.

our while was two-thirds we growth, up growth demand, commercial Total Thanksgiving exponential also comp perspective that provide quarter significant margin It visibility it strong driven than of offset digital I our for period. trends, was gross quarter the freight drive fourth strengthened XX%, will of And focused of grew despite higher our provide as store on lower by the First, first the strong trends. COVID-related weekend I our constraints year capacity fiscal well XX%. included as of and December comp five which costs. fueled And destination as date during shipping across will Growth more third comparable X%. digital Bath and runs XXXX. note, sales on broad-based consistent current on was Beyond core delivering challenging of much outlook of declines by as October revenue. begin, We plans then, widely well Further, year, last X%, and our which to is the through led a on the enterprise Saturday remaining November. grew with up banner, healthy fiscal quarter To traffic on extensive important growth which Bed Positive sales food XX%. & results period, was and and expansion. was last holiday These reported September, headwinds. delivered categories, key performance to sales by digital XX% represented

disproportionately BOPIS, following some a in key in BABY growth headwinds John to encouragingly, during the sales been strength our December COVID-related in we return from impacted all year. which year. digital have quarter, further convince a made hear completely powered interventions. minutes, Day new the Curbside Delivery, The has saw XX% growth capability, business in and omni including we our and of our investments by store trust yet, to orders few are including you'll approximately the As from the total service new These this Pickup X us in gained online quarter. represented BOPIS provide gain customers Same sales ease million of and this customers, allow digital offerings

Beyond key sales Network an expected a impact Bed the X%, reduction Net divestitures $X.X to were holiday Optimization Our Store and digital like continuation primarily capabilities been This results. has of are billion, Bath of no season becoming due the initiative. our a banner driver other. of & from

down and spending between sources, reported traffic XX%. performed Analytics, Sensormatic in-store holiday Friday traffic period, and We was the XX%. and As outlined online data Black by market-wide over was XX% up fell market-wide trend. Adobe third-party in-store this by XX% including strongly Similarly, for six-week against

low enterprise continue more which digits from store sales more of growth I comp total now than our our we led year of November by will sales of Monday, five-day a reported the On XX%. & comp per Giving results. banner to sales comp divested financial sales Bath XX%, and quarter the store more offsetting of significant During through $X.XX. the XX%, than digits, XX%. loss GAAP delivered single declines XX, than grew third comp Cyber share overall digital approximately net XX comp our a than offset digital sales more intense non-cash holiday period, loss sales banners from during six-week with And up from for U.S. Beyond basis, growth versus December period held core diluted Bed sale, holiday double declines for was sales demand of including or Thanks last competitively

This product in improvement $XX year earlier was mix fulfillment mix favorable due is our larger basis our year, and the efforts declined bedding margin favorable focus margin including charges prior of and components by SG&A to gross million these higher impacts, lower to GAAP the management This and from reflects to and results points items are XXX with XXX industry-wide Plus comprehensive points channel versus payroll-related XX anticipated engineering again, bath; modern, certain from in XXX EBITDA the digital. the points driving categories, excluded expense, impact include associated build of points well for businesses, while almost were business from of year. transformation includes perspective performance expansion. of long-lived with better margin expenses. for including quarter. also is the in sales million underlying times increased that coupled outbound approximately increased Our include rate basis points adjusted basis a growth strategic the a Adjusted and as higher-margin growth basis plus sales transform from of savings was year. delivering are to which three increases, costs. impairment basis of from the channels of markdown digital particularly latter These unfavorable assets, prior business. exponential gross restructuring These digital to promotion Cost as business of the actions from XXX part such leverage on of freight margin The demonstrate and special sales including sale, as year-over-year provide which as team's expansion total Once losses XXX durable $XXX the offset expenses, around our This from from restructuring the results Market, impact million, held by driven Adjusted XXX% by gross results non-cash World driven on driven working. expense by data-driven expense significant of in the XX.X%. proportion partially $XX higher the model distribution points than such our coupon prior versus the optimization; and period. adjusted shipping which basis primarily benefits

flow item Cash and dynamics. million $XX seasonal it included positive spite of Turning positive was cash from cash unlocked balance asset CapEx. $XXX of million statements; flow flow as investments also in from monetization, in non-core we Operating sheet $XXX million now proceeds to was some of net positive flow generation. cash

lower XX% impact inventory On to inventories versus divestitures, XX% was This manage basis, capital We banner year. this primarily with including billion. carefully the the last the continue quarter seasonal inventories period. due ending to were lower second working purchases for and sequential of selling from than holiday $X.X a quarter

at tracking compared a billion to deliver previously inventory reduction are XXXX. We faster $X stated of in our XXXX goal to at pace retail

we in fiscal starting million. spending support our omni-always expenditures the have capital our CapEx plans to quarter only transformation. 'XX, in Our digital-first, $XX That were significantly in ramp-up said, of

a with in liability of balance During our operating divestitures from store the reduction and also quarter, banner third debt billion we improved gross non-core about $X.X lease closures.

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maintained also strong billion, $X.X including ABL. have a liquidity our We of

result million. Cost we strong next programs share conjunction quarter fourth completed second with two divest current million million And the of reduction on to this month in end approximately December, the in amount before launched announcement a stock accelerated in a are in expected capitalizing levels. of totaling price XX% will agreement Market, late for financial in our our in Plus of be February $XXX These a shares definitive the the of ASR outstanding on plans of and $XXX fiscal position, $XXX to or reported at So October. World we repurchase

Our execution repurchase principles, drives reflect $XXX liquidity allocation cash this early strong up for the now consistent flow years. level our sales actions the our of with return our strong shareholders. capital period authorized our stage million re-initiation three confidence plan. quarter and generation and planning share summary, balanced In to EBITDA These to at coupled over is of in strategy, third next shows and strategic of growth, capital growth which performance the

impact adjusted XXXX. expectations year-on-year on the Now can been and despite traffic moving COVID-XX-related the this to business be for headwinds directional our accompanied In sales we some lower by shipping That to and outlook, fourth said, control on providing that earnings start will freight margin fiscal the deliver QX higher of the positive with parts guidance on widely for perspective provide our QX, costs. we current this will to color we has EBITDA quarter. reported constraints, industry. then expect not and context, It I and specific store retail continue in feel about improvement

In are terms with approximately of expected the top last line, year. line in be comp to sales

digital We tampered positive showed expect including sales by December categories. be key comparable consistent strength COVID-related growth, stores. continued strength to in across total impacting headwinds destination enterprise

versus net Importantly, banners we're planning the impact for unfavorable initiatives. given on last ongoing the a divested sales and QX double-digit store total year, optimization

manage with in year-on-year of last EBITDA with about the margin period terms same in cost adjusted prior the with year. to In expect significant EBITDA from we line gross pressures, QX figures we of of be line in Again, in freight impact deliver actions to year. margin, increase cost the a these margin expect absolute the drag driving in to QX, spite increases anticipated we're optimization so gross

fiscal Now, I'll turn to XXXX.

XXXX Our time, four we portfolio World had yet. deal year. We was banners, base our fiscal but have the At the banner not initial still outlook Cost Market already Plus year a review as signed for underway. did included divested

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Our billion. stores proportion revenue healthier base a We're 'XX performing billion digital $X our lead transformation and revenue tightening projected include approximately significant fewer, larger now $X.X to fiscal will will a core of with to growing better faster range a business. portfolio to

opportunities quarter, in due be a not COVID-XX. on first which sales XXXX the recapture expect we starting will at Looking to basis, lost comp with from the store the quarters, closures to

be fiscal to which levels to in quarters two sales we During comp comparable of sustain XXXX. relation expect base through four, will solid on comp a the basis, sales

comparable with sales sales line financial fiscal planning be in total forecast assumes enterprise for Our purposes to XXXX.

forma XX%, expectation gross our versus margin point for We of adjusted XXXX. represents basis reiterating improvement more are pro XXX approximately a which than

to increase we We strive we're EBITDA are range cost $XXX XXXX I This said shift we closures, not comp growth are with fiscal have needless from and shipping of to drivers modeling And costs. range as and XX% from be $XXX a to the versus consistent adjusted forma reinvestments product continued environment. say, year for have the channel line pro base the top from requiring impact $XXX and of The million. highly including assumed competitive previously and between enhancing XXXX restructuring earlier, savings the as growth to adjusted fiscal to sales ones in sales the planned EBITDA we of higher in line for a But store million will purposes XXXX sourcing deliver million. EBITDA EBITDA represents shared, range. actions a

confidence fiscal and in Our of gives by us performance $XXX to our million EBITDA date between adjusted goal billion XXXX. longer-term achieving in $X

of X.X result our midterm gross in us a puts below times. $X sheet Importantly, debt-to-EBITDA reduction debt below with our driving times, This through significant of on well billion. which ratio our closures, portfolio gross balance way three to transformation, is coupled store goal improvement will

growth, for Officer. a over and have and sales Masood, drive shareholder creation, turn in I business now Rafeh? strategic and cash driving We it and plan generating Rafeh call Digital is pathway the our will disciplined working. Chief value to investing margin to

an to headwind off. With our retailer, COVID have is strategy it store Thank stepped as a you, omni-always we up our Gustavo. paying as traffic, and

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mobile than from During faster homepage the our XX% same five-day holiday Monday, Cyber year. period Thanksgiving loaded period shopping to last the

Bed over XXX,XXX mobile buybuy also quarter. this & in downloads BABY apps, We Bath Beyond resulting and re-launched

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have customer We our rate improve, also the seen underscoring app the experience. uninstalled further of to of stickiness continue

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type convenient as experience including PayPal's includes like faster improvements store well use, apps. over to Pay Buy X mobile and new and pay only and in XXX options from shopping options. as implemented Pay make Apple process we more Pay a After our to This extending payment Now our Later Third, to easier checkout

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Thank John. you,

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[Operator Instructions] Curt question from is And America. our Thank you. of Nagle from first Bank

much like freight pressure sounds into very Thanks first full this morning. year. Yes, one questions. very margins. I for at do and Good for the understand 'XX? issue was long carries constrained But shipping holiday taking It the is, my how so for think how our least you an

XXXX? you're You still in sorry, follow-up just I'm don't I And after targeting XX% that. a an margins gross then 'XX -- since have it's think issue

here Look, is morning, plans. freight Good into retail Thanks. and that built we the future our to that know stay, pressure across we've Curt.

and we really QX both of good of and year QX over we've margin that the So that see stead our stands that to deliver created currently offsets those in proof-of-concept XX% stability us in the margin. this

very comfortable around So feel that. we

impact again, maybe lower some guys us as 'XX cadence vendor the in such then least, you, a make that big Okay. how Maybe to exclusive much at sourcing in think update more product quick and in and starting just costs how the Day, Mark. to things of or, outlined more have give of merchandising and And initiatives and will October those -- about roll-out XXXX? Analyst improved on for you merchandise of an

to Yes, is of into a built The these really margin benefits we and we've that actions already substantial And trends in here outlined I you board rolling and mean as those the sustainable. good are results. going the firm then Curt. add news have across we're with terms the foundation

introduction be the are evidenced really will we that we've throughout that own our already sharing a growth of is XXXX in key addressing throughout missing begin in and benefits big with those be range in of sourcing going point build strength opening launched. in year. the close-in of rollout which the seeing first be price in brands of being competitive We're be brands, truly more XXXX. to authority. of in our pagination to undertaken And of the huge we're part and But with the terms and the has reinventing items there, flow in brands of then the our the a XXXX, majority also equation own going the marketplace we'll categories. onwards quarter first So half in our key news March to that been Several

we're the promotions, brand, we're changes, going mix in the excited sourcing management, benefits now lay step in and own the consistent of the XXXX. so So to of incremental about management that progression

from from Gutman Morgan next question Simeon is Stanley. Our

about that change the year for next expectations for And and in for that quarter now? flattish. months my taking of a your something embeds where Does to know going in be Good ago I weaker outlook fourth Can you may fourth year's were this the talk morning. you're Thanks that lapping question. be couple quarter? now sales potentially

and think, we're about I Simeon, QX doubt the We again, of good our has confidence of respond for into plans those, the team through on Yes, is our the that we to this plans. consumer those QX now we year. overall Hence, COVID factor QX robust why that we've no have foot feel impact but traffic on to had to something headwinds there's of agility that challenges. talked executing and about had how and

really what think been in has lapping we forward way. we've met very look those turbulent to next and different year a those time, we And so a in

some year's next looks think of guidance you confirm. about that. but much top the follow-up. for still talk opportunity and mentioned promotional then as it's about I I optimization promotion offset there headwinds, for margin environment? the talk you of about thinking freight thanks And Can then to that Okay, a to is, revision in QX? the margin on, my gross more terms by think, is, like changing margin of function the pricing. how just the line, it You Can opposed And

Yes.

of equation I we in become QX exceeding reshaped and our promotional quarter promotional differentials create margin gross the and during really that do reengineered freight. to We've in helping activity. think and did generating We on shipping to But we paying actually balance stress that more opportunity terms and QX. in that's or margin dividends would that so. not had from the

So pressure EBITDA. forward. plan see customers. that promotional. We're outlined, had the putting sales we we We not can cost winning through as in we through generate a we we're as We're more to plan on different price. And -- focused progressing Gustavo believe less And have, control that do definitely growth three-year in our working three-day and rate plan, outlined we're XXXX initiatives on of that number sorry. the margin our

Raymond from our And from next Griffin is question Bobby James.

year, I range $XXX next my of Gustavo, talk EBITDA. to at Good for still a of lot uncertainty million a $XXX range morning, There's taking I Thanks out fairly tight there. the million Mark, the everybody. to want looking for guess it's questions. about was, thing first

confidence of that in that, range there? a Is So What be can tightening in concern the margin? bit about you the it And would now driver what Is that cause more maybe you you up? you a to that that talk second it what business where -- gives could part little as most see range really the underperform? gives sales?

Gustavo Bobby, here. Hi,

forward, but definitely, very there's look feel uncertainties a we in as So plans. our of confident still lot we

promotion to reiterating sales. monetization right why seeing of that, portfolio is And work, tighten Mark of would of gross we're we the But it's completed can range next question clarity of and with that Day. more that spite year. we mix. the is more and you In our one gross we drivers as being that's managing of -- we offset on we have non-core as the a we coming mentioned, a what said now. XX% It us your expansion, the on the at headwinds that, are assets, will where which throw our data-driven the freight margin Investors margin why we're not costs, recent it. than off, We in tighter provided On we're

sales that -- for assuming have we that, purposes financial line year. prudently comp EBITDA significant with planning we would by deliver with would prior sales, in And are We growth.

be XXXX that things. just on Yes. or again, I has the the Any a is an issue. that, placing those I responsible would Bobby, plan threat a market. in I internally And we're circumstances affected think market really add plan based would concern think issue, exemplified by changing how caused macro gets not everyone

very carefully things and achievable, looking monitoring are responsible our we and by week quarter. feel So We to by that. plan and is we're forward delivering

enterprise is just there just there? talk something function of world? weeks given I the of maybe the being couple little or in sales. rewarding. or would a little show you year calling last for for right. then, But my I commentary, up popped a still Has some of line, quarter, for in versus you're the you. entire mentioned flattish Thank And second that growth in comparable of of just is bit be, guess for believe, concern given guess, question still that's kind I that in you last All bit what you a level uncertainty the about Can December the out going conservative, did the

quarter this positive on that planning, There's full December. in the kind fourth still February, Yes, we're January, months the of We've world, bang December, It's being we process. on seen want to and that lot and definitely our Remembering complete our in to fourth signs quarter. sure is have forward around. look we in there. to make we a responsible going sharing more two in

of much. Thank luck. Best very you

from is Chris [Operator Horvers Morgan. Instructions] And our next question JP from

guys. Thanks. Good morning

question follow-up. So is my first a

was recent in things As evolving Is COVID about you your this until 'XX fair changing Are surge? presumably, as down the of should thought you actually that you surcharges other And we about as more think you lasts also about change changed the shipping plan. of assuming get it costs. holiday say longer to environment a of freight talked -- here. change as sort come normalized into mean that to a volume and I sort vaccine? So there? -- was terms you the the the get the

that within you're structural something sticks there freight assuming around? is that So

that election on to and results saw being the Yes, market in foot -- QX about began versus And based in it's between and think I period. an concerned COVID. to around change held and stores, acceleration an the our on environment. prudent based future think September-October around we traffic really think I of I results what uncertainty the mean our November behavior real customers

its rollout, early. are want we with to prudent So impacts. It's We it's vaccine through still still underway. able very monitor be and being in that thinking the to

We in on of only checks the stimulus just and anything It's because, haven't business again, uncertain. so that's their factored new terms been news. impact

volatility our So those that and of or can we just could that ensuring out any that that the and level of uncertainty headwinds. conservatively has built bring balance is into plans

COVID of been been it's home around moment. think from lot this tailwinds experiencing there's discussion a I category interesting the the that great

from All facing face. we've that to and have of the and customer concern a confusion sudden headwinds incredible had been retail

going the balanced into So, of I we're to face delivering and in want uncertainty that EBITDA XXXX. we've positive positive profit, that plan feel comps, a ensure really that got

Got it.

not quarter to quarter, to be mentioned it about terms understand then bps in in Is shift between being rate I gross margin from of -- just SG&A. fourth cost of than quarter, mean, about, accounting was the to and for December. more the our trying get really fourth worse So, that, XXX in relative promotional math, the just understood. you And the you history, in it goods third

be points to charge points saw markdown have obviously, it shipping XQ? -- pressure. like of going in lapped much inventory. the XXX larger clean You going to basis that And you than basis very is you surcharge the XX So seems be

basis such to the the that quarter sort margin on flat in of year-over-year a gross be year-over-year? in understand dynamic it trying just So and sequential fourth would

basis over and reason QX, XXX that's said in to part Sure, that we're quarter. the it's in promotion the estimating much was prudent points about management larger of we prepared we What talked remarks, impact. basis QX incidence we're mix, Chris. what that. QX, the that's just latter It's And the and cost, XX is points in and do. will shipping again right the the in that shipping committed on being the cost. impact But about offsetting what Part you through disciplined why on we're on of

ahead. Go

I'll Sorry, because just add. also

just And the and If you're last and purchasing. not looking accelerated. margin versus brought is real think, that's mix, of be QX year, QX offsetting purchasing stable, and a I It like-for-like, recognize in natural thing definitely is pressures is we've you the and we're versus the shared. at that that behavior consumer store that it to But as mitigating achievement. impact it's to digital with

quarter, three-month want other. our the we what make prudent behavior, balancing, no like sure meant but the being and QX And shipping, one part into is month is of we're that's it what of margin, EBIT So, consumer to therefore digital that for there. inclusive again, we're

Understood. Thanks so much, guys.

from our And question next Baird. Benedict from Peter is

Thanks Hey, question. for the guys, thanks. taking

mean, first curious in That's and around are my And BOPIS, just drive kind plans First, on how adoption question. Curbside. adoption the your is relative that expectations? that trending I to the goals of and continued of six of your But, months the it's or know been ahead? to I months what

question. Peter, great Yes,

I seen May. and but muscle. -- Remember, overall a the that, unpacking introduced see think this for into movement we an we we've showed QX, an what in statistic escalation only new you

able we we're in XX a around our So store terms, is provide have now are on actually, two-hour order it's And to of at XX%. it. what real about fulfillment We're minutes. loving level. seeing an Customers NPS assurance score

a week-in, that became delivery concerned they as and ensuring secure had could around really times by the a and I shipping period under the from a tree. well. a is in total escalate present customer, BOPIS they industry in period We joyous the muscle week-out our methodology accepted very new as think the as saw that benefiting more that level, we're and rates December holiday customers

a into to constants and our and customers by responded ease we or And and is store We so, maintain. creating now we BOPIS know that grateful they're these they equivalent for. lent for to And challenge business a muscles us, profitability. convenience believe to for the that to want really are fulfilled we're very we that in store-based almost a really

help terms us shipping us So the differential through and QX helped costs. profitability has helps us QX in will and and in our of

progression here sticky in we think not one of retailers. stay. of for to So, how this the is has just the COVID new is it's BOPIS, a fortified outcomes It but most muscle

you part years, but wedding. any those Mark. And segments curious a that the brought your couple bit guess little as next talked shifting, your or outlook just across that, business how guys of I qualitative not Thanks. And to for those willing about couple businesses on of much you kind And basket BABY of Thanks you're Okay. but the versus I times registry of businesses the mean sure two size size, maybe prepared comments, more then two of a quantitatively how just opportunities? you during I'm share see over remarks.

is more more the the would for customer moment-in-time on And great build go-forward John and point. Yes. it bigger experience. And But outlined, been basket. It's engagement. reliant experience. sticky moment-in-time we do we that, the BABY as experience, us. in-store has between an registry higher experience actually differentiate a I a It's when versus very strong

our Beyond, been we into and see with When the to pivoting complete even Bath omni. & upside the we've turn for XXXX true registry. story we'll the better. stores shopping further. environment us, digital in But normalized strengthen there we more so And Bed And is a digital return to in to invest

in consistently have in in most of are the share held top ranking of the and recent data terms registries. We market

that down and of pent-up demand ceremony. haven't Now there's numbers are just the moment are number And well share one and solid to as doubling strengths placed, even years because and having we current market good. to and or We of in of spaces our XXXX, like those the in people occur. growth for benefit into weddings existed In our is held feel over we that current not XXXX to going we year hasn't the one in there going had be runway and and transfer we're wedding COVID that our numbers, XXXX further. that because stats a of are be or next the couple investing for

next Steven Our question from from Guggenheim. is Forbes

Good morning.

top in categories, you that release. of noted focus five the trends within the I on wanted maybe the So outside to the

performing. early, it's of these in of new are that So just of because Mark, here. just the could categories right, speak know remodels? it's lower some it's sales, here, the but concept percentage if how addressing stores performance a still centered some you are curious around to I performing And/or, the within although one-third or initiatives,

you're to categories So about how thinking share improving specific and see the those love them. trajectory I'd within

question. great a It's Steven. thanks, Yes,

and the a has to care. occurring Care there's moment end a And of And had differential we to traffic when huge somewhat us. frequently in not showing trade. is as the the store I stores I headwinds is think Personal that's of this basket business we've build of sort natural in of a these been just just a that think business QX saw in some And part just suppression correlation. been or past. control. that that direct one what the more our and stores we of that's foot for businesses actually either QX this is trip is remodel personal business a of that based Again, in great at And it there traffic get on we get traffic, our our being testing, booming is relevant them -- some than store-based in to traffic digital we

had of couple a softness. there's think too areas I we key where some have

for really is been I that's a good strong. normally think example area us, cleaning an

getting of that supply It's been also in out clean our issue. food assortment has But up an firing impact. cleared we across smaller like I into time, the product at of constrained globe. we same been that kind of And just space. that built to think the haven't categories we

focused strength really doubling our down So on we're categories. on

through positive XXXX. starting focusing to we where and in definitely and of we already ramp efforts on are our QX see focus, You consistent up and signs coming But through a categories and we're in see QX, that inventory couple our can key strategically really January. our of that

just Obviously, minimum pressure, some the maybe increases know Gustavo. then follow-up for are or And wage we part year other quick transpiring retailers rate this XX Mark. Thanks, [ph]. that to potentially announcing a the you and right, from

XXXX? you what's the point, So that right, on financial curious and as the in guidance for to as right, business pressure relates guys wage a think it how about incorporated, investments

can definitely we news it we'll looking carefully, emerging very and No marketplace, Yes, impact that at going want how and absorbing the than cost evolution. very, change today, on to and into that that the be that we're be overall at on our leadership in We're see the and forward. of trends financial that. looking competitive plans other

Best luck. you. Thank of

Our next question from Morgan. is Carla Casella from JP

of update you quarter from how goal? have savings overall in cost your -- you Could on us -- an achieved your just Hi. much the give what

path million on the we're $XXX of million have objective the $XXX with that we growing. to Yes, track

product XXX $XXX savings, about basis as at basis the In you XXX leverage we building and of expect including margin saw from savings, and distribution we year, costs blocks, Next points. the points in right, least. current saw million quarter,

Okay.

the count towards So program. we should those cost-savings

Okay. That's great.

Yes.

sales know but same-store think I gave buybuy some same-store you And provide overall Harmon? I or the heard also, at number you BABY I sales details, don't did overall.

that provide not did we Carla. No,

historically I for the third mean quarter?

buybuy We've No. why quarter, temporarily in down the the remarks reason third about. sales spoke some December. were in in were in The they that prepared down of in and the John had BABY dynamics the quarter, then that recovered same-store

it by in December. digital, down in in compensated recovery partly happening BABY, still, in but store traffic, store keep in particularly that strength November, the will mind, buybuy Just and sales, slowed significantly start

but there. -- that how Beyond the Okay, last in I Bed great. you of how & was it & much digital? Bath Bath the by Beyond company, you if alone, But know of business that look And if year? you Bed done trending versus you're about gave talked digital business growth for is wondering I'm your much -- overall at -- how

the exceptionally that there is for so strong. quarter, We XX% did growth digital Carla, share the

I is what the of guess, digital I wondering sales, the XX% company. was percentage overall the not growth.

About one-third.

Okay, one-third.

a [ph]. about third, similar It's

Yes.

last I that think the [indiscernible] reference year. that point to

of So the -- and at in growth that growth prior XX%. was a year

that periods, that can you So holiday the so. only remembering of portion the growth exponential includes and see November

And Lasser question Mike from our from next is UBS.

whether about a the morning. question. of my model, the or care Good mentioned for And traffic Bed some the e-commerce one of some you're Ship several is to Thanks penetration to importance driving Home, personal the it's and products. long-lasting you wedding situation, lot that in-store registry the just Mark, retail, Bath less taking your times of be are outcomes to out and Curbside going to in like a rolling to that going drive of there's the higher stores. Pickup of the of initiatives traffic through

going are over balance that long you sales productivity to how and So generate the initiatives? run of your some

we started the way. We we a saw before came in And normalizing when stores. of came year really Well, saw benefit second digital thanks great in -- the Michael, the positive omni-channel of really things saw through, question. your middle for together the wave that in comps and stores

actually financials omni-channel the high planning from shown plan, that remain we very that stable. in we've the provided a see our environment. so actually come factored digital three-year into for in -- rate really forward an our piece But does digital we us, that that, For driving we've

lifestyle. think I part a the are for your exemplifying this there's trip, of of true and whether of number of a need community as that it sense your part retailers both generate a moment. to be great network BOPIS in a the of at or sort And for trip store,

growth. visual sales normalized we look environment. ready very, we've control assortment, with new that, very what new plus our stores we base. and strong new We when we new that, a merchandising, to more forward be environments the that XXX come seen they and will our in is differential a So, when those in And see think through to doors provide new completely planning is

presentation help So and stores. our are really We're further in believer remodels in us we firm we then our stores. a even And assortment, think there. will our that investing

no promotions for channel to margin XXXX you price in drivers other are there's that some tailwinds category I and markdowns freight around question arguably, provided follow-up gross is coupons, going this at reopening And to or some at initiatives. that by XXXX, talk where brands, for a fade home-related sourcing that, discussion debatable own time offset the the My going Okay. environment? in bridge your about positive mean, of and those is, better and be the you in a of to the shift cost. In real traffic-driving reinvestment

Yes.

key done. mean think we're the work our showing that I our I to has the comp not and key great that's we're that parity been KPIs set. indices already everyday that the reason categories is for there in why showing

Our are actually, taking promotions that now using more we're And using effectively. hold. we're them

we're I that which feel, Michael, promotional that in margin the So the savings but more these mix. in are driven We of two that cost believe are the think promotions, sustainable inside effectiveness. displayed really gross expectation are I last have great growth, the seeing getting XXXX, much we've overstated. quarters muscles,

for we I shows and believe think creating joy and people's be now to be that expectation that sticky. is promotional that And exceptional created But and financials data is trend activity. This our we of the home at home. XXXX. a have that chase that into we've there's their and part don't promotional cadence going of an lives we our comfort year this see ready the in great balance will

Basham Wedbush Securities. last from question Seth from is our And

impact Thanks in is, lot specifically the banner color and Shops just Could sales XXXX. guidance that morning. your Tree EBITDA is us to Cost question as and My first on from what you a Plus good forecast? give Christmas for some the

XXXX We what [ph]. point Yes, is includes core be And divestitures. Bath, starting million. XXXX a buybuy post so only and basis a It banner forma of Decorist bridge $XXX BABY, guidance the Bed in showed Harmon. in those providing we're banner pro on the that's already the would

Okay, that's helpful. Thank you.

on That's ongoing an basis.

to full of the the Yes. include you do didn't we of Cost projection. to that shared our sales terms the with Market in the and able had EBITDA things projection, in Day but Seth, we one many Plus we at after business was that include weren't of we World Investor in

changes presented the forma attitude a can the what now it early secondary pivot that provide pro to with that on in growth. the responsible the still even of be So true occur. based some EBITDA But definitive being of XXXX, is to that range that you're half for sale on seeing can further year with on that was we more one based again, firmer to way full

importantly, and And you I that revenue. it's a but there's -- range this, on know Yes. tighter know

already. sales we're That's Now why basis. to a And in in to not going reported we that sales XXXX when guidance want of you the QX compare XXXX see dynamic some net comparable. XXXX, or on it's provide comparable versus

While on reported of going impact we've sales the on P&L to a concepts, down totally to net XX% on divestitures. XX% mentioned going It's a up sales, significant It's that stores. different simply next year is on a between on. of double-digits banner are QX basis, be the shape the transformation

you're of the sales from is versus to mix just XXXX. related in-store you so, headwinds increase in Understood. shift to of if XXXX? increases? rate much that expect online expecting My you that so mix because sales Would freight And follow-up of question expect why do in-store channel

will by great offsets to were the including fulfilled actually be we're exceptional stores. back in where our quarter all XX% -- that an continue penetration strong, year. such Yes. do again, There I mean we've a think that will the to just and mean, there's we agility got be orders -- it's and to an just I incredible that, been there. of digital sharing digital We stores natural pivot was

We we So permeating we're but the high going factoring to digital some in XXXX, penetration freight the in be see offsetting rate. costs. are of some

Thank you very much.

all back the to the we that's turn over for time And now Barth have questions. will I Janet today remarks. closing call for

day, thank great stay or you all a safe. and and Have questions. Felix feel you, for call me with in participating any free our to additional today. contact Please [ph] Thank

Thank ladies Thank concludes call. today's may you disconnect. you, now gentlemen. and That for and you participating,