Bed Bath and Beyond reported a surprise holiday-quarter loss as the company ran low on inventory and couldn't get merchandise out of congested ports and onto shelves.
The company's shares bounced around in premarket trading as investors weighed the news.
The company missed out on $175 million in fourth-quarter sales because of out-of-stock merchandise. Supply chain problems cost the company about $100 million in the prior quarter.
In an interview with CNBC, Tritton said that the home goods retailer is disappointed with its results. The company's efforts to turn around have been slowed by the macro environment. He said that moving goods costs more and that some best-selling items from national brands are in short supply due to missing components. He said that the majority of its seasonal merchandise got stuck at ports and arrived late.
He said that some of the challenges have been carried into the current quarter.
Tritton said that Bed Bath is making progress. He said that it is investing in technology, welcoming customers with postcards, and expanding its private label business.
Target veteran Tritton has sought to refresh the retailer's brand with the launch of private label products and store remodels. Its stock has been used in meme-stock rallies. It has been under pressure from investors, including activist Ryan Cohen.
The retailer recently struck a deal with Cohen's firm to add new board members and explore whether it should spin off or sell its BuyBuy Baby business, which has been one of its bright spots.
Bed Bath said it expects sales and margins to improve in the second half of the fiscal year as supply chain conditions ease.
The three-month period ended Feb. 26 was compared with what analysts were anticipating.
The company's net loss grew to 159 million, or $1.79 per share, from net income of $9 million, or 8 cents a share, a year earlier. It lost 92 cents a share. Earnings per share were expected to be 3 cents.
Sales fell 22% from a year earlier. It was short of estimates for $2.07 billion.
Bed Bath's same-store sales dropped 12% compared to the year-ago period. The Bed Bath & Beyond banner's same-store sales declined 15% and the Buy Buy Baby banner's sales grew by a low single-digits.
Digital sales declined by 18% compared with the year-ago period, which partially reflects the shift back to stores.
Bed Bath is changing its supply chain so it can better manage all of its merchandise as it imports goods and moves them to distribution centers and stores, according to Tritton. He said that the technology will go live at the end of the month. He said that the efforts were already underway.
The timing of the pressures and the timing of the strategy is the point of contention.
Bed Bath has to compete for dollars as inflation is at a four-decade high. Consumers are looking at other spending priorities, such as summer vacations and spring clothes, which can be seen outside of the home.
Since households no longer have extra dollars from the government like child tax credits, the backdrop is tougher for the retailer. He said that that isdampening the overall demand for several categories, including home.
There is a strong home market that has had some ups and downs and we think there is a great business to be had.
Bed Bath's shares are up 23% so far this year. The stock price of the retailer was $17.97 on Tuesday, down 6.75%.
Here is the company's earnings press release.
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