Shares of Bed Bath & Beyond (BBBY -2.76%) are up 26% as of 10:30 a.m. EDT, after an initial jump up 30%.
Bed Bath & Beyond reported earnings for the period ending Aug. 29, 2020, and the results pleasantly surprised investors. The home merchandise retailer reported an increase in comparable-store sales for the first time since 2016, led by strong e-commerce growth of 89%.
The company also said that improvement in working capital efficiencies as well as a divestment resulted in cash flow of more than $750 million. Bed Bath & Beyond also reported a strong increase in gross margin, to 36.7%, and a reduction in gross debt by 30%. Adjusted earnings of $0.50 per share increased 47% over the prior-year period, and blew away the $0.23-per-share loss analysts expected.
Bed Bath & Beyond's successful quarter reflects the renewed interest in home improvement as consumers continue to spend more time working from home, and adding to the comfort of being at home. "When home is everything, we're really poised to be the epicenter of that," president and CEO Mark Tritton told CNBC.
The company is following the playbooks of retailers like Target, Walmart, and Lowe's during the pandemic, focusing on improving digital sales. Bed Bath & Beyond recently launched a same-day delivery service as an additional option to its contactless curbside pickup offering.
The company continues to withhold forward fiscal guidance due to economic uncertainty, but reiterated its plan to "accelerate its comprehensive restructuring program to drive profit improvement over the next two-to-three years," it said in a statement.