Bed Bath & Beyond, Inc. · NYSE:BBBY
Bed Bath & Beyond — Q3 2021 Earnings Presentation
38 slides from Bed Bath & Beyond's earnings presentation, Jan 6, 2022
Slide 1: Third Quarter Fiscal 2021 Earnings Presentation
Third Quarter Fiscal 2021 arnings Presentation (PERIOD ENDING NOVEMBER 27, 2021) Mark Tritton, President & Chief Executive Officer ~ BED BATHE BEYONED> LD Via
Slide 2: Forward-looking statements
2 This presentation contains forward-looking statements within the meaning of Section 21 E of the Securities Exchange Act of 1934 including, but not limited to, the Company’s progress and anticipated progress towards its long-term objectives, as well as more generally the status of its future liquid
Slide 3: Agenda
Agenda * @Q3’21 Results (ending Nov 27) * @Q4’21& FY 2021 Outlook " Transformation Update = Appendix BED BATH & BEYOND
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Slide 5: ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ *Fiscal November ending 11/27; Calendar
5 ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ 3 ▪ 3 *Fiscal November ending 11/27; Calendar November ending 11/30; Thanksgiving to Cyber Monday period ending 11/30
Slide 6: Note: The Company’s four Core banners include Bed Bath & Beyond, buybuy BABY, Harmon
6 1 2 2 Note: The Company’s four Core banners include Bed Bath & Beyond, buybuy BABY, Harmon Face Values and Decorist.
Slide 7: Comparable Sales in Q3 and Holiday Trends
@Q3’21RESULTS PERIOD ENDING NOVEMBER 27, 2021 Comparable Sales in Q3 and Holiday Trends + Comparable sales improved within the fiscal quarter + Fiscal November down mid-single digit; fiscal quarter down high-single digit + Calendar November: growth +low-single digit US Comp Sales in stores; FLAT US
Slide 8: Net sales and comparable sales
8 • • • • • 1 • Total Net Sales Divestitures Fleet Optimization Note: The Company’s four Core banners include Bed Bath & Beyond, buybuy BABY, Harmon Face Values and Decorist. Stores Digital Core Banner Net Sales (excl. Divestitures) Comparable Sales Supply Chain Disruptions*
Slide 9: Note: Based on Core business
9 1 1 1 1 1 Note: Based on Core business
Slide 10: Note: numbers may not add due to rounding •
10 Note: numbers may not add due to rounding •
Slide 11: Cash Flow Reflects Seasonality & Strategic Holiday Inventory Investments
11 3 Cash Flow Reflects Seasonality & Strategic Holiday Inventory Investments Amidst Supply Chain Headwinds 3
Slide 12: Financial Outlook
FINANCIAL OUTLOOK |
Slide 13: Q4 2021 Outlook
13 Note: Adj. gross margin, adj, EBITDA & adj. EPS are non-GAAP financial measures. For a reconciliation to comparable GAAP measures, see Appendix of this presentation. Key Considerations: ▪ Depreciation & Amortization: $64M-$69M ▪ Interest Expense: approx. $16M ▪ Tax Rate: 28% - 30% (excluding disc
Slide 14: FY 2021 Outlook
14 CURRENT PRIOR approx. $7.9B $8.1B - $8.3B +HSD +LDD 34.0% - 34.5% Approx. 34.0% - 35.0% Approx. 34% Approx. 32% $290M - $310M $425M - $465M ($0. 15) - $0. 00 $0.70 - $1.10 Note: Adj. gross margin, adj. SG&A, adj, EBITDA & adj. EPS are non-GAAP financial measures. For a reconciliation to comparabl
Slide 15: Transformation Update
TRANSFORMATION UPDATE
Slide 16: Transformation Update: Began Significant Transformation in 2021
TRANSFORMATION UPDATE Began Significant TRANSFORMATION in 2021 BED BATH & BEYOND PURPOSE make it easy to feel at home PRINCIPLES customerinspired — omni-always people powered _ performance driven PILLARS & PROFICIENCIES MISSION re-establish our authority and be the preferred omni-channel home destin
Slide 17: Transformation progress and 2021 priorities
17 ✓ Stores as fulfillment hubs ✓ Omni-always platform ✓ Invest in key projects for enhanced capabilities ✓ Launched digital Marketplace to expand platform ✓ Announces partnership with Kroger E-commerce ✓ First home retailer on DoorDash Marketplace ✓ Remodel ~450 BBB stores ✓ Close ~ 200 BBB stores
Slide 18: Three Pillars of Transformation
18 Three Pillars of Transformation ELEVATE EXPERIENCE: Overhauled websites with new look, reduced steps to checkout and AI-powered search UNLOCK OMNI-ALWAYS: launched BOPIS & curbside pickup services TRANSFORM TO DIGITAL FIRST: Upgraded tools and processes to improve speed to market Digital Sales pe
Slide 19: Store remodels
19 • 82 store remodels to-date • Continue to deliver mid-single digit sales lift (YTD) • On track to deliver approx. 130 remodels across US & CAN as planned despite supply chain challenges
Slide 20: Store closures
20 • 170 Bed Bath Banner Closures-to-Date (5 in Qtr) • Sales transference rate of >20% continues • On track to close approx. 200 store closures through FY21 Continuing to position our network for the future: ✓ Disciplined management of inventory and receipts ✓ Partnership with recognized liquidation
Slide 21: Kroger partnership
21 • Launching in early 2022 on Kroger.com • Offering an extensive selection of the most sought-after goods for home and baby products • Launching in select Kroger brick & mortar stores in 2022 • Branded shop-in-shop experience with exclusive Owned Brands and national brands
Slide 22: Owned Brands launched
22 Launched November 2021 Share the happy. Launched October 2021 Designed for modern living.
Slide 23: Owned Brands launched in 2021
23 Bring your story to life Launched June 2021 Escape the noise Launched April 2021 Launched July 2021 Solutions for a well-kept home Launched May 2021 Home starts here Launched June 2021 Start with food. End with love. Launched March 2021 everyday comfort Launched October 2021 Designed for modern l
Slide 24: Owned Brands penetration
24 ✓ Penetration approximately 25% in chain ✓ Penetration above chain in remodeled stores ✓ Extending Owned Brands to the buybuy BABY business
Slide 25: buybuy BABY performance
25 Positive Net Sales growth vs. Q3’20 with market share elevated (ytd) Continued market share gains Digital penetration of total BABY Sales Note: As shared during Investor Day 2020
Slide 26: Supply chain and technology: Delivering Value
26 Delivering Value ✓ Increased digital capabilities ✓ Flexibility, agility and scalability ✓ Speed to market ✓ More efficient technology operations ✓ Shift spend towards innovation ✓ Improved return on technology investment ▪ 35-day store replenishment ▪ Vendor direct network with consolidation hub
Slide 27: Unlocking a Virtuous Cycle to Drive Sustainable Value Creation
TRANSFORMATION UPDATE, Focused on Unlocking a Virtuous Cycle to Drive Sustainable Value Creation our strategic plan to drive omni-always and improve customer experience will accelerate os sales and EBITDA growth slonificant strategic creation always operational transformation with disciplined capita
Slide 28: Building a Positive Track Record: Gross Margin
TRANSFORMATION UPDATE, Building a Positive Track Record of Performance — Gross Margin Continued Gross Margin Expansion FY 2017 FY 2018 FY 2019 FY 2020 FY 2021E FY 2022E FY 2023E BED BATH & BEYOND
Slide 29: Share repurchase history
29 $(25) $25 $75 $125 $175 $225 $275 Accelerated Share Repurchase Program PMALL Divesture One Kings Lane Divesture Announced Acceleration of Remaining $1B Program to 2021 TO BE COMMUNICATED IN FY2022 Linen , CTS & Distribution Center Divestiture CPWM Divestiture $600M cash in-flow from divestitures
Slide 30: Share repurchase program-to-date
30 Program-To-Date: 31M or 24% reduction in share count to enhance shareholder value through share repurchases
Slide 31: People and community
31 ▪ People: In recognition of World Mental Health Day, closed corporate office and provided store associates with additional holiday to promote more balance and well-being during these extraordinary times ▪ Community: BBBY’s stronger, together relief fund, created to provide support for our associa
Slide 32: Who We Are: Investment Thesis
WHO WE ARE Investment Thesis Turnaround story with significant potential for sustainable financial results " Long-term sales acceleration through assortment curation, the addition of Owned Brands and a digital-first mindset " Enhancing gross margin & EBITDA through product mix, pricing and operation
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Slide 34: Quarterly net sales: Reported vs. Core
34 • The following table shows a quarterly summary of the Company’s fiscal 2019 and 2020 net sales on both a Reported GAAP basis and on a Core Go-Forward basis, which excludes sales from divested banners. • The Company is providing this additional transparency to help analysts and investors gain fur
Slide 35: Definitions and non-GAAP information
35 1 Comparable Sales reflects the year-over-year change in sales from the Company's retail channels, including stores and digital, that have been operating for twelve full months following the opening period (typically six to eight weeks). Comparable Sales excludes the impact of the Company's store
Slide 36: Q3'21 Non-GAAP Reconciliation
APPENDIX Q3’21 Non-GAAP Reconciliation Gross profit Gross margin Restructuring and transformation initiative expenses (Loss) earnings before (benefit) provision for income taxes Tax (benefit) provision Effective tax rate ‘Net (loss) income Net (loss) earnings per share - Diluted Weighted average sha
Slide 37: Q3'20 Non-GAAP Reconciliation
APPENDIX Q3’20 Non-GAAP Reconciliation ‘Three Mouths Ended November 28, 2020 Excluding Benett from reduction of (Gain) toss on Gain) toss on Restructuring and incremental sale of extinguishment Transformation markdown Total income Reported Businesses lof debt Expenses Impairments “reserves __taximpa
Slide 38: Third Quarter Fiscal 2021 Earnings Presentation
Third Quarter Fiscal 2021 arnings Presentation (PERIOD ENDING NOVEMBER 27, 2021) Mark Tritton, President & Chief Executive Officer ~ BED BATH& : BEYONE>